Tariffs,quotas, and voluntary export restraints with endogenous labor supply

This paper develops a two-good, small-country, general equilibrium trade model with endogenous labor supply and wage taxes, and where trade is restricted by a tariff, or an import quota, or VERs. Within this framework we derive (i) the employment and welfare effects of the three types of trade restrictions, (ii) the price effect of an import quota and VERs, and (iii) the shadow price of foreign exchange under each type of trade restriction. The present results are compared to those where (i) factor supplies are fixed, and (ii) perfect international capital mobility exists.     

A Bayesian Signals Approach for the Detection of Crises

In this paper, we consider the signals approach as an early-warning-system to detect crises. Crisis detection from a signals approach involves Type I and II errors which are handled through a utility function. We provide a Bayesian model and we test the effectiveness of the signals approach in three data sets: (1) Currency and banking crises for 76 currency and 26 banking crises in 15 developing and 5 industrial countries between 1970 and 1995, (2) costly asset price booms using quarterly data ranging from 1970 to 2007, and (3) public debt crises in Europe in 11 countries in the European Monetary Union from the introduction of the Euro until November 2011. The Bayesian model relies on a vector autoregression for indicator variables, and incorporates dynamic factors, time-varying weights in the latent composite indicator and special priors to avoid the proliferation of parameters. The Bayesian vector autoregressions are extended to a semi-parametric context to capture non-linearities. Our evidence reveals that our approach is successful as an early-warning mechanism after allowing for breaks and nonlinearities and, perhaps more importantly, the composite indicator is better represented as a flexible nonlinear function of the underlying indicators.

     

Quantitative Import Restrictions and Optimal Capital Taxes Under a System of Tax Credits

This paper examines the optimal capital tax policy under quantitative import constraints, and international capital tax credits. For a small capital-importing country, the optimal capital tax equals the foreign tax under a quota, and equals or exceeds the foreign tax under a VER. For a small capital-exporting country, the optimal policy towards capital is a zero tax under a quota, and a tax or a subsidy under a VER. Also examined are the welfare effects of capital taxes and trade liberalization, and the joint setting of the two policies, when both instruments are available to the government.     

A Family of Differential Input Demand Systems with Application to Greek Agriculture

This paper develops a family of input demand systems via alternative parametrisations of Theil's differential model. Each member of this family is as flexible as any other locally flexible functional form. More importantly, selection among the competing family members is possible via simple parameter restrictions. The family of differential input demand systems is applied to the agricultural sector in Greece for the period 1961–96. Formal tests suggest that the model with the CBS-type effects dominates the alternative models. Divisia and price elasticities are calculated from the selected model and a decomposition of changes in the demand for inputs into technical change, total input volume, substitution, and residual effects is performed. The empirical results are quite reasonable. Overall, the analysis in this paper indicates that, in certain cases, the differential approach may provide an attractive alternative to the dual approach in modelling production behaviour.     

World Energy Council’s Global Energy Scenarios to 2060

Since 1970, global energy consumption has more than doubled. Conventional resources, in particular oil, gas and coal, had a dominant share in supply and covered most of the growth in demand in the past. Even in 2015, these fossil fuels still accounted for more than 80% of global primary energy consumption. The contribution of renewable energies to the total electricity generation was 23% in 2015, the same share as in 1970. Developments in the coming decades will differ substantially, however. Total energy consumption will rise at a much more moderate pace than in the past, e.?g. by up to one third by 2060. Electricity consumption will double during this period. But even this is a considerable slowdown in growth compared with the five-fold increase seen between 1970 and 2015. And, unlike in the past, the emerging rise in consumption will essentially be covered by renewable energy sources. This is true especially for the electricity sector. This comparison with developments in the past shows the extent of the global energy transformation that may be expected in future. These developments are reflected in three global scenarios, which were published by the World Energy Council in October 2016. The results of this flagship study World Energy Scenarios to 2060 are mirrored with the main findings of the IEA’s World Energy Outlook and the U.S. EIA’s International Energy Outlook. The most important challenge indicated by the results of the mentioned studies is: the transformation, which is expected in the covered scenarios is not sufficient, in order to achieve the target of limiting the global temperature increase to less than 2 degrees Celsius compared to pre-industrial levels that was agreed by the international community of states in Paris at the end of 2015. It will be highlighted, which strategies could meet the requirement cost-efficiently—a prerequisite for its success.