Spatial propagation of macroeconomic shocks in Europe

This paper implements a spatial vector autoregressive model that takes into account both the time and the spatial dimensions of economic shocks. We apply this framework to analyze the propagation through space and time of macroeconomic (inflation, output gap and interest rate) shocks in Europe. The empirical analysis identifies an economically and statistically significant spatial component in the transmission of macroeconomic shocks in Europe.     

Significant drivers of growth in Africa

We employ bootstrap techniques in a production frontier framework to provide statistical inference for each component in the decomposition of labor productivity growth, which has essentially been ignored in this literature. We show that only two of the four components (efficiency changes and human capital accumulation) have significantly contributed to growth in Africa. Although physical capital accumulation is the largest force, it is not statistically significant on average. Thus, ignoring statistical significance would falsely identify physical capital accumulation as a major driver of growth in Africa when it is not.     

Reassessing the productivity gains from trade liberalization

This paper reassesses the impact of trade liberalization on productivity. We build a new, unique database of effective tariff rates at the country‐industry level for a broad range of countries over the past two decades. We then explore both the direct effect of liberalization in the sector considered, as well as its indirect impact in downstream industries via input linkages. Our findings point to a dominant role of the indirect input market channel in fostering productivity gains. A 1 percentage point decline in input tariffs is estimated to increase total factor productivity by about 2 percent in the sector considered. For advanced economies, the implied potential productivity gains from fully eliminating remaining tariffs are estimated at around 1 percent, on average, which do not factor in the presumably larger gains from removing existing non‐tariff barriers. Finally, we find suggestive evidence of complementarities between trade and FDI liberalization in boosting productivity. This calls for a broad liberalization agenda that cuts across different areas.     

Unanticipated vs. Anticipated Tax Reforms in a Two-Sector Open Economy

We use a two-sector neoclassical open economy model with traded and non-traded goods to investigate the effects of unanticipated and anticipated tax reforms. First, an unanticipated tax reform produces an expansion of GDP, labor, and investment, while an anticipated tax reform has opposite effects before the implementation of the labor tax cut. Quantitatively, if the traded sector is more capital intensive, GDP increases by 1.6 percentage points or declines by 2.7 percentage points after three years, depending on whether the tax cut is unanticipated or anticipated. Second, we find that GDP change masks a wide dispersion in sectoral output responses. As long as investment is both traded and non traded, a tax reform substantially raises the relative size of the non-traded sector after three years while traded output always drops. Third, a tax reform improves welfare in all scenarios, more so if the markup is endogenous, but less so if the shock is anticipated. Importantly, we find that welfare gains in a two-sector economy with capital accumulation and perfect access to external borrowing are between 39 % and 89 % higher than those in an economy without physical capital.     

Level of access and infrastructure investment in network industries

In this paper, we study how the terms of access to an incumbent’s infrastructure (i.e., the level of access and price) affect an entrant’s incentives to build its own infrastructure. Setting a high level of access (e.g., a resale arrangement), which requires relatively small up-front investment for entry, accelerates market entry, but at the same time delays the deployment of the entrant’s infrastructure. This is also true for a lower access price. We show that the socially optimal access price can vary non-monotonically with the level of access. We also study the case where access is provided at two different levels, and show that access provision at multiple levels can delay infrastructure building. Finally, we modify our baseline model to allow for experience and/or market share acquisition via access-based entry, and show that high levels of access may accelerate facility-based entry.     

Robust political economy correlates of major product and labor market reforms in advanced economies: Evidence from BAMLE for logit models

The political economy literature has put forward a multitude of hypotheses regarding the drivers of structural reforms, but few, if any, empirically robust findings have emerged thus far. To make progress, we draw a parallel with model uncertainty in the growth literature and provide a new version of the Bayesian averaging of maximum likelihood estimates (BAMLE) technique tailored to binary logit models. Relying on a new database of major past labor and product market reforms in advanced countries, we test a large set of variables for robust correlation with reform in each area. We find widespread support for the crisis‐induces‐reform hypothesis, as high unemployment and economic crises are robustly correlated to structural reforms. We also find evidence of reform convergence—that is, countries with tighter regulation are more prone to liberalize. Reforms are more likely when other countries also undertake them and when there is formal pressure to implement them. Other robust correlates are more specific to certain areas—for example, international pressure and political factors are most relevant for product market and job protection reforms, respectively.     

Can Reform Waves Turn the Tide? Some Case Studies using the Synthetic Control Method

A number of advanced economies carried out a sequence of extensive reforms of their labor and product markets in the 1990s and early 2000s. Using the Synthetic Control Method (SCM), this paper implements six case studies of well-known waves of reforms, those of New Zealand, Australia, Denmark, Ireland and Netherlands in the 1990s, and the labor market reforms in Germany in the early 2000s. In four of the six cases, GDP per capita was higher than in the control group as a result of the reforms. No difference between the treated country and its synthetic counterpart could be found in the cases of Denmark and New Zealand, which in the latter case may have partly reflected the implementation of reforms under particularly weak macroeconomic conditions. Overall, also factoring in the limitations of the SCM in this context, the results are suggestive of a positive but heterogenous effect of reform waves on GDP per capita.     

Consumers’ Behaviors and Attitudes toward Doggy Bags: Identifying Barriers and Benefits to Promoting Behavior Change

ABSTRACT

This study identifies barriers and benefits of consumers’ current doggy bag behaviors and provides the information required to run an effective community-based social marketing campaign encouraging consumers to take their uneaten restaurant and café food home. This is done by applying a two-stage methodology, including quantitatively analyzing existing survey data and qualitatively investigating focus group discussion. Multiple barriers to widespread doggy bag participation were common and varied for different individuals and included both convenience and social stigma-related factors. The rational appeal of “saving money” was found to be the most effective motivator for encouraging doggy bag usage, especially for women, young people, students/unemployed, and low-income earners. Social marketing strategies and behavior change tools can be developed to remove the barriers and enhance the benefits of using doggy bags, such as developing positive social norms around using doggy bags and highlighting the financial incentive of using them. This research contributes to a limited but growing literature on out-of-home food waste and provides practicable insights for both public policy and for the food service sector for future initiatives aiming to reduce food waste.     

Comparaisons de divers types de programmes de stabilisation des revenus agricoles du Québec

Deux modèles de programmation mathématique (MOTAD–cible statique et MOTAD-cible dynamique) ont été utilisés pour analyser l'impact de trois différents programmes d'intervention gouvernementale sur l'allocation optimale des ressources et sur les revenus totaux d'une ferme représentative au Québec. Les résultats montrent que sous les scénarios ASRA/ASREC et RARB, les revenus espérés sont supérieurs pour le RARB comparativement à ASRA/ASREC à un bas niveau de risque, mais ils sont du même ordre lorsqu'on considère les niveaux de risque plus élevés. L'allocation des ressources et la taille de la ferme sont quelque peu différentes. Afin de comparer ces deux programmes d'intervention, deux ratios ont été calculés : les dépenses nettes des gouvernements par rapport au revenu brut et au revenu net de l'entreprise. Les résultats montrent qu'un programme de type RARB est supérieur à un programme de type ASRA/ASREC, et ce, même si les transferts par unité assurée sont les mêmes. Sous le scénario CSRN, les résultats indiquent que les fermes ont des tailles de deux à quatre fois plus petites que dans les scénarios ASRA/ASREC ou RARB et que la stratégie financière des dépôts et des retraits dans le compte CSRN est déterminante dans l'augmentation du revenu espéré de la ferme.     

Borders and Growth

This paper presents a framework to understand and measure the effects of political borders on economic growth and per capita income levels. In our model, political integration between two countries results in a positive country size effect and a negative effect through reduced openness vis-à-vis the rest of the world. Additional effects stem from possible changes in other growth determinants, besides country size and openness, when countries are merged. We estimate the growth effects that would have resulted from the hypothetical removal of national borders between pairs of adjacent countries under various scenarios. We identify country pairs where political integration would have been mutually beneficial. We find that full political integration would have slightly reduced an average country's growth rate, while most countries would benefit from a more limited form of merger, involving higher economic integration with their neighbors.