A spatial equilibrium analysis of trade policy reforms on the world wheat market

Since a few countries produce most of the world's wheat, and consumption is widespread across the world, wheat is one of the most commonly traded agricultural commodities. In recent years, the wheat market has been going through difficult phases as wheat prices are depressed. The fall in wheat prices is attributed to a supply glut and restrictive trade barriers. This study develops a large-scale spatial equilibrium trade model for wheat to analyse the effects of removing trade barriers (tariffs and subsidies) on each country's/region's price, supply, demand, trade, welfare, and bilateral trade flows. The results show that trade liberalization leads to an increase (decrease) in prices in the exporting (importing) countries. Production and exports increase in the exporting country, and consumption and imports increase in the importing country. Consequently, the volume of trade also increases. The welfare of most countries rises, and thus, world welfare also rises.     

Effects of global trade liberalization on softwood lumber markets

This study develops a world spatial equilibrium softwood lumber model comprised of the major importing and exporting countries/regions to analyse the impacts of global trade reform on the world softwood lumber market. The results show that free trade leads to an increase in lumber trade, and Canadian producers and US consumers are the biggest beneficiaries. Trade liberalization improves the overall world welfare as world producer and consumer surpluses increase. The result highlights the importance of moving towards free trade in the global softwood lumber market.     

The Scope and Limits of a Public–Private Hybrid: Dispute Settlement under NAFTA Chapter 19

Globalisation is often depicted as having led to an increase in private authority at the expense of that of the state. It is important to correctly specify the scope that private authority has achieved and the capacity of states to push back and limit that authority. This article grounds these theoretical issues in a discussion of the hybrid, public–private dispute settlement mechanism set up in the original Canada–US Free Trade Agreement (CUSTFA), and later extended into Chapter 19 of the North American Free Trade Agreement (NAFTA). It finds that privatising the enforcement process did make a difference. Trade experts on panels saw things differently to judges and in ways that were more sympathetic to exporters. This favoured Canadian and Mexican interests. However, the arrangement lacked deep roots. It was a late-stage compromise in trade negotiations. This rendered it vulnerable to a US counterattack once panels began to rule in favour of Canadian and Mexican challenges to US trade determinations. The transfer of quasi-judicial authority to a public–private hybrid proved contingent, partly on the hegemonic state's ongoing level of comfort with the arrangement, as well as on a lack of business consensus within the United States.     

Evaluating the British Model of Electricity Deregulation

Abstract ** :  A key aspect of the 1990 reforms to the British electricity supply industry was the introduction of a formal system of regulation by an autonomous regulatory body. It was expected that replacement of monopolies in some areas by markets and price‐setting in monopoly areas using a simple incentive formula would mean that regulation of the industry would be 'light'. This article examines how regulation has turned out in practice. It concludes that the promise of 'light' regulation has not been fulfilled. Regulation of competitive markets is a major regulatory activity, incentive regulation has evolved into a complex and intrusive form of rate‐of‐return, while regulation of industry structure has allowed the industry to descend into a concentrated, vertically integrated structure, at odds with the aims of the reforms .     

The Practice Boundaries of Advanced Practice Nurses: An Economic and Legal Analysis

The purpose of this study is to examine the effects of State regulation that determines the extent of professional independence of advanced practice nurses (APNs). We find that in States where APNs have acquired a substantial amount of professional independence, the earnings of APNs are substantially lower, and those of physicians assistants (PAs) are substantially higher, than in other States. These results are striking since PAs are in direct competition with APNs; the only real operational difference between these groups is that PAs are salaried employees who must work under the supervision of a physician. The implication is that physicians have responded to an increase in professional independence of APNs by hiring fewer APNs and more PAs. The finding that earnings of APNs decline when they attain more professional autonomy vis-à-vis physicians reinforces work by Sass and Nichols on physical therapists.The content is the responsibility of the authors and does not represent official positions of the Federal Reserve Bank of St. Louis or the Federal Reserve SystemJEL classification: I11, I18, J31, J44, L51     

Competitive Neutrality in Access Pricing

This article examines the notion of competitive neutrality when setting access prices for vertically integrated bottleneck networks. In contrast to the claims of regulated firms (for example, Telstra), it is not possible to argue that access charges that involve unit prices in excess of short‐run marginal cost reflect competitive neutrality. That is, we demonstrate that in general models of downstream oligopoly, upstream prices that differ from marginal cost are not competitively neutral in the sense of placing integrated and non‐integrated firms on an equal basis.     

Technological convergence, R&D, trade and productivity growth

This paper analyses productivity growth in a panel of 14 United Kingdom manufacturing industries since 1970. Innovation and technology transfer provide two potential sources of productivity growth for a country behind the technological frontier. We examine the roles played by research and development (R&D), international trade, and human capital in stimulating each source of productivity growth. Technology transfer is statistically significant and quantitatively important. While R&D raises rates of innovation, international trade enhances the speed of technology transfer. Human capital primarily affects output through private rates of return (captured in our index of labour quality) rather than measured TFP.     

Prototypicality advantages for pioneers over me-too brands: the role of evolving product designs

Prior empirical research suggests that consumers perceive pioneers as more prototypical (i.e., representative) of their product categories than me-too followers. This prototypicality advantage is believed to contribute to an enduring marketplace advantage for the pioneer. We extend research into pioneering prototypicality advantages by considering the ramifications of simultaneous product design (i.e., product attribute) evolutions. We hypothesize that the simultaneous evolution of product designs of both the pioneer and me-too will diminish the pioneer’s prototypicality advantage over the me-too, even though the me-too does not initiate the change. To test our hypotheses, we create an experimental environment consisting of four cells, each corresponding to a different marketplace scenario: a no-change condition; a simultaneous-evolution condition; a pioneer-updates-first condition; and a leapfrogging (i.e., me-too updates first) condition. The results suggest that simultaneous design evolutions can diminish the pioneer’s prototypicality advantage. As a result, me-too entry may be a more attractive strategy in the long-run than currently believed in product categories characterized by substantial design evolution.

Endogenous market incompleteness without market frictions: Dynamic suboptimality of competitive equilibrium in multiperiod overlapping generations economies

In this paper, we show that within the set of stochastic three-period-lived OLG economies with productive assets (such as land), markets are necessarily sequentially incomplete, and agents in the model do not share risk optimally. We start by characterizing perfect risk-sharing and find that it requires state-dependent consumption claims which depend only on the exogenous shock realizations. We show then that the recursive competitive equilibrium of any overlapping generations economy with weakly more than three generations is not strongly stationary. This then allows us to show directly that there are short-run Pareto improvements possible in terms of risk-sharing and hence, that the recursive competitive equilibrium is not Pareto optimal. We then show that a financial reform which eliminates the equity asset and replaces it with zero net supply insurance contracts (Arrow securities) will implement to Pareto optimal stochastic steady-state known to exist in the model. Finally, we also show via numerical simulations that a system of government taxes and transfers can lead to a Pareto improvement over the competitive equilibrium in the model.     

The future of farming: The value of ecosystem services in conventional and organic arable land. An experimental approach

In the current work, a novel, experimental ‘bottom-up’ approach is used to quantify the economic value of ecosystem services (ES) associated with highly modified arable landscapes in Canterbury, New Zealand. First, the role of land management practices in the maintenance and enhancement of ES in agricultural land was investigated by quantifying the economic value of ES at the field level under organic and conventional arable systems. This quantification was based on an experimental approach in contrast with earlier value transfer methods. Total economic value of ES in organic fields ranged from US $1610 to US $19,420 ha^− 1 yr^− 1 and that of conventional fields from US $1270 to US $14,570 ha^− 1 yr^− 1. The non-market value of ES in organic fields ranged from US $460 to US $5240 ha^− 1 yr^− 1. The range of non-market values of ES in conventional fields was US $50 — 1240 ha^− 1 yr^− 1. There were significant differences between organic and conventional fields for the economic values of some ES. Next, this economic information was used to extrapolate and to calculate the total and non-market value of ES in Canterbury arable land. The total annual economic and non-market values of ES for the conventional arable area in Canterbury (125,000 ha) were US $332 million and US $71 million, respectively. If half the arable area under conventional farming shifted to organic practices, the total economic value of ES would be US $192 million and US $166 million annually for organic and conventional arable area, respectively. In this case, the non-market value of ES for the organic area was US $65 million and that of conventional area was US $35 million annually. This study demonstrated that arable farming provides a range of ES which can be measured using field experiments based on ecological principles by incorporating a ‘bottom-up’ approach. The work also showed that conventional New Zealand arable farming practices can severely reduce the financial contribution of some of these services in agriculture whereas organic agricultural practices enhance their economic value.