Bound by Gravity or Living in a ‘Post Geography Trading World’?* Expert Knowledge and Affective Spatial Imaginaries in the Construction of the UK’s Post-Brexit Trade Policy

A key battle has been fought within the UK cabinet on the direction of post-Brexit trade policy. The opposing sides have favoured either continued alignment or a ‘hard’ break with the European Union’s (EU’s) regulatory and customs regime, in the latter case to allow the UK to pursue an independent and ambitious trade policy agenda. Contrary to much commentary on ‘post-truth’ politics, both sides have relied on rival forms of expertise to support their claims. I argue for the need to not only re-emphasise the malleability and political nature of expert knowledge, but also appreciate its emotional bases. The Treasury has led the charge in favour of a softer Brexit by drawing on econometric (‘gravity’) models that emphasise the economic costs of looser association with the EU. In contrast to this attempt at technocratic legitimation, the specific legal expertise drawn upon by cabinet advocates of ‘hard’ Brexit has appealed to an emotive political economy of bringing the UK, and its (in this imaginary) overly regulated economy, closer to its ‘kith and kin’ in the Anglosphere, deepening the UK ‘national business model’. I conclude by calling for more explicitly emotive and values-based argumentation in the public debate on the UK’s future trade policy to improve the quality of democratic deliberation.     

Choosing sides in the trilemma: international financial cycles and structural change in developing economies

ABSTRACT

This paper analyzes the impact of international financial cycles on structural change in developing economies. It is argued that the impact of these cycles depends on the specific combination of macroeconomic and industrial policies adopted by the developing economy. The cases of Brazil and Argentina are contrasted with those of Korea and China. In the Asian economies, macroeconomic policy has been a complementary tool along with industrial policy to foster the diversification of production and capabilities. Inversely, in the case of the Latin American countries, long periods of real exchange rate (RER) appreciation, combined with the weaknesses (or absence) of industrial policies, contributed to the loss of capabilities and lagging behind.     

What circumstances lead a government to promote brain drain?

This paper aims to complement the existing theoretical brain drain literature, focusing on the interaction between education, skilled emigration and government intervention in a small open economy. This article first characterises different emigration patterns that may arise in equilibrium, then seeks the conditions that lead a government to promote brain-drain. The model shows that the government may promote skilled emigration among workers with intermediate skills even though the resulting brain drain decreases per capita income. Emigrants remittances outweigh the income they would produce if they did not emigrate. Therefore, the government makes less severe the fall in per capita income that follows the brain drain by encouraging emigration among those skilled workers who are more productive abroad.     

Labour‐market institutions and their impact on trade partners: A quantitative analysis

Recent theoretical literature studies how labour market reforms in one country can affect labour market outcomes in other countries, thereby rationalizing widely held policy beliefs and empirical evidence. But what is the quantitative relevance of such spillover effects? This paper combines two recent workhorse models: the canonical search‐and‐matching framework and the heterogeneous firms international trade model. Qualitatively, the framework confirms that labour market reforms in one country benefit its trading partners, replicating the stylized facts. However, when wages are bargained flexibly, the model quantitatively underestimates the correlation of structural unemployment rates across countries. Introducing some degree of real wage rigidity remedies this problem.     

Oblivious equilibrium for concentrated industries

This article explores the application of oblivious equilibrium (OE) to highly concentrated markets. We define a natural extended notion of OE, called partially oblivious equilibrium (POE), that allows for there to be a set of strategically important firms (the “dominant” firms), whose firm states are always monitored by every other firm in the market. We perform computational experiments that explore the characteristics of POE, OE, and Markov perfect equilibrium (MPE), and find that POE generally performs well in highly concentrated markets. We also derive error bounds for evaluating the performance of POE for cases where MPE cannot be computed.     

The impacts of international tourism demand on economic growth of small economies dependent on tourism

This paper studies the impacts on economic growth of a small tourism-driven economy caused by an increase in the growth rate of international tourism demand. We present a formal model and empirical evidence. The ingredients of the dynamic model are a large population of intertemporally optimizing agents and an AK technology representing tourism production. The model shows that an increase in the growth of tourism demand leads to transitional dynamics with gradually increasing economic growth and increasing terms of trade. In our empirical application, an econometric methodology is applied to annual data of Antigua and Barbuda from 1970 to 2008. We perform a cointegration analysis to look for the existence of a long-run relationship among variables of economic growth, international tourism earnings and the real exchange rate. The exercise confirms the theoretical findings.     

Impact mitigation or ecological restoration? Examining the environmental sustainability practices of multinational mining companies

This paper examines the environmental sustainability practices of multinational mining companies in addressing their impacts and promoting the sustainable development of local communities in Ghana. Although large-scale mining companies have embraced environmental sustainability, the drivers and the mechanisms for addressing their impacts throughout the mine life cycle is not fully understood because of the limited research in this area. The focus in this study involves an examination of the drivers for environmental sustainability in a weak and non-enabling institutional context and the mechanisms for addressing impacts on biodiversity, water quality and quantity, and ambient climate. The findings show that the environmental sustainability practices of multinational mining companies are determined by regulatory compliance and corporate environmental responsibility based on perceived ethical obligation. Additionally, we find gaps in mine closure planning and rehabilitation because of the limited requirement for biodiversity restoration in the domains of flora repopulation and active fauna reintroduction. This paper provides empirical and theoretical insights for academics and practitioners in industry and policymaking.     

Manipulation of voting schemes with restricted beliefs

In this paper we define manipulation with restricted beliefs as the possibility for some voter to have an insincere preference ordering that dominates the sincere one within the given individual beliefs over other agents’ preferences. We then show that all non-dictatorial voting schemes are manipulable in this sense, up to a given threshold.     

The role of permanent and transitory components in the fluctuations of Latin–American real exchange rates

Following the approach suggested by Engel and Kim (1999 Engel, C. 1999. Accounting for U.S. real exchange rates changes. Journal of Political Economy, 107: 507–38. [Crossref], [Web of Science ®] , [Google Scholar]), we estimate the permanent and transitory components of the real exchange rates in four Latin–American countries for the period 1957:01 to 2002:04. Results suggest that transitory component is the driving force of the real exchange rates in Argentina and Mexico. A principal role of the permanent component is observed in the real exchange rates of Brazil and Chile. Estimates probabilities of the high-variance regime allow to identify the principal events happened in these countries. This information is closely related to nominal shocks and therefore, it explains the significant role of this component in these countries.