Environmental protection without loss of international competitiveness

We develop a two‐country Cournot oligopoly model with product differentiation across countries and production‐generated pollution. The abatement of pollution by the firms in response to emission taxes is endogenous, and the number of firms can be fixed or there may be free entry and exit of firms in both countries. We propose particular unilateral and multilateral piecemeal policy reforms of emission taxes and production subsidies such that domestic industries will not suffer any loss of international competitiveness (defined in terms of either market share or profits), emission levels will be lower, and welfare could be higher in both countries.     

<Emphasis Type="BoldItalic">» Emerging markets are becoming core business for multinationals «</Emphasis>

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? Emerging markets are becoming core business for multinationals ?     

Tax principles and tax harmonization under imperfect competition: A cautionary example

This paper shows that under imperfect competition, the welfare effects of indirect tax harmonization may depend crucially on whether taxes are levied by the destination or the origin principle. In a standard model of imperfect competition, while harmonization always makes at least one country better off, and may be Pareto-improving, when taxes are levied under the destination principle (which currently applies in the European Union), harmonization of origin-based taxes (as recently proposed by the European Commission) is certain to be Pareto-worsening when the preferences in the two countries are identical, and is likely to be so even when they differ.     

Cross-Border Pollution,Terms of Trade,and Welfare

We construct a two-good general equilibrium model of international trade for two small open economies where pollution from production is transmitted across borders. Governments in both countries impose emission taxes non-cooperatively. Within this framework, we examine the effect of changes in the degree of cross-border pollution on Nash emission taxes, emission levels and welfare. We do so under two scenarios: when changes in cross-border pollution do not affect domestic pollution (non-strategic) and when they do (strategic). We also examine the effect of changes in international terms of trade on pollution and welfare when cross-border pollution is non-strategic.      

Core and equilibria in an assembled product industry

We show that the core is non-empty and coincides with the set of competitive equilibria for an assembled product industry. This paper was written while the author was affiliated with the School of Economic and Business Sciences, University of Witwatersrand at Johannesburg.     

Asymmetric oligopoly, international trade, and welfare: a synthesis

This paper analyzes the relationship between market shares and welfare under the assumption of Cournot-oligopolistic interdependence in production. The model is general enough to deal with multiple countries, oligopolists with different levels of marginal costs within each country, and any distribution of world demand across countries. It is found that the elimination of a minor firm harms the country if the country's total production is very little. However, such a policy always benefits the country if it exports the commodity. The welfare effect of production subsidies and the case of foreign ownership of firms are also discussed.     

Do people really support trade restrictions? Cross-country evidence

We investigate the effect of trade restrictions on the perception of well-being. Using combined cross-sectional micro data from the World Values Survey and the European Values Survey of individuals in 89 countries, we find that citizens of a country with a lower degree of trade restrictions are more satisfied with their lives. The results are also robust across different measures of well-being, different definitions of trade restrictions, different estimation methods, and different sample sizes.     

On the estimation of simultaneous-equations error-components models with an application to a model of developing country foreign trade

An empirical balance of payments model involving the demand and supply of imports and exports for 31 developing countries is estimated utilizing panel data over 1964-1987. In order to compute error-components 3SLS estimates of this model, which requires different instruments for different equations, we propose a generalization of the Fuller-Battese transformation to obtain GMM estimates. Our empirical results suggest that very little of the short-run adjustment in external imbalances is likely to be achieved by exchange rate policies, and most of the burden must fall on aggregate demand management.