The Value-added Content of Trade:New Insights for the US-China Imbalance

Trade in intermediate inputs accounts for roughly two-thirds of international trade.This input trade reflects the increasing fragmentation of production processes across borders.It also creates two distinct challenges for measuring international interdependence. First, conventional gross trade statistics tally the gross value of goods at each border crossing, rather than the net value added between border crossings. This well-known "double-counting" problem means that conventional data overstate the domestic value-added content of exports.Using input-output tables for individual G7 countries, existing estimates suggest that the import content of exports is 20%-30% and rising over time.Estimates for countries heavily engaged in processing trade (e.g.China) are on the order of 50%.     

Financial structure and exchange rate experience: Mexico 1954–1977

This paper discusses the Mexican experience regarding exchange rate policy and the development of the financial market since the 1950's. The unique structure of Mexican financial institutions is described, with emphasis on how they have conditioned possibilities for monetary and exchange rate policy intervention.     

Reserves and the managed float: a search for the essentials

We examine the stability of rules that determine the rate of devaluation as a function of the level of reserves; the analysis is conducted in terms of an overlapping-generations and a Sidrauski-type model with rational expectations and without capital mobility. On the whole, the analysis confirms results by Rodriguez (1981) in a substantially different model, by which ‘high’ speeds of adjustment tend to provoke instability.     

Fiscal policy,welfare, and employment with perfect foresight

The long-run feasibility of expansionary fiscal policy is analyzed in a “fix price” economy under the assumption that individuals are altruistic and have rational expectations. It is found that exclusive reliance on interest bearing debt is a feasible policy only if money is an inferior good. However, feasibility is ensured if the bonds to money ratio is not higher than a certain critical level.     

On dollarization

The paper examines the case for dollarization in emerging market economies. It is claimed that dollarization becomes an attractive monetary regime when account is taken of recent financial turmoil in such economies. The case is further strengthened by the fact that these economies have a penchant for acquiring dollar debts (i.e., liability dollarization). However, exchange rate misalignment and deflation are potentially serious problems, unless appropriate fiscal and public sector prices policies are implemented, in addition to establishing a financial sector whose assets and liabilities face parallel relative price risks. JEL classification: F31, F41     

Goal Programming: Potential and Limitations for Agricultural Economics

Recently, goal programming (GP) has been discussed in the literature as an alternative to linear programming, particularly in decision-making environments involving multiple objectives. In this paper we present an overview of the different GP formulations, their assumptions, limitations, and implications for agricultural decision making. Furthermore, a new insight into the interpretation of duality in GP is discussed. The concept of "standardized dual variables" which provides a more meaningful interpretation of shadow prices in GP is introduced. A simple but realistic farm agricultural planning example is used to illustrate the analysis.
Récemment, la technique de programmation appellée "goal programming" ou "GP" a été presentée dans la literature comme une alternative à la programmation Iinéaire, particulièrement dans les situations òu le procés de décision est basé sur plusieurs objectifs simultanés. Dans cet article nous présentons une vue génerale des différentes formes de la "GP;" leurs hypothèses de base. Ieurs limitations, et leurs implications pour le procés de decision agricole, une nouvelle intérpretation de la dualité en "GP" est proposée. En particulier, le concept de "variables duales standardisées" est introduit, ce qui permet une interpretation plus significative des prix de reference en "GP." Finalement. un exemple simple mais réaliste de planification agrcole a l' échelle d' une ferme est pour élucider utilisé l' analyse.     

Are High Interest Rates Effective for Stopping High Inflation? Some Skeptical Notes

High interest rates are considered an effective tool for stoppinghigh inflation. The case for a policy of high interest ratesis developed in terms of a conventional IS-LM model. However,among other things, the model ignores some central aspects ofmodern credit markets. In particular high interest rates maygive rise to nonperforming bank loans, thus seriously jeopardizingthe effectiveness of the policy. Examples are developed in whichit would be optimal to aim for equilibriums of low, rather thanhigh, interest rates. One of these examples hinges on the existenceof nonindexed domestic debt.     

Devaluation: Levels versus rates

In a context of infinitely-lived families à la Sidrauski, where consumers are lump-sum compensated for the inflation tax, and there is no capital mobility, it is shown that a devaluation improves while an increase in the rate of devaluation deteriorates the balance of payments.     

Analyzing the Techno-Economic Determinants for the Repowering of Wind Farms

The aim of this article is to identify the relative importance of technical and economic variables in the financial feasibility of repowering wind farm projects. A financial valuation model is developed. We carry out a sensitivity analysis with several variables considered to be key in the repowering decision. The most relevant technical variable is the increase in production efficiency and the most relevant economic variable is the capital expenditures in new equipment. Furthermore, the decision to repower critically depends upon the level of support being provided. The repowering project would not be feasible in the absence of support.