Trade credit: Suppliers as debt collectors and insurance providers

There are two fundamental puzzles about trade credit: why does it appearto be so expensive,and why do input suppliers engage in the business oflending money? This paper addresses and answers both questions analysingthe interaction between the financial and the industrial aspects of thesupplier-customer relationship. It examines how, in a context of limitedenforceability of contracts, suppliers may have a comparative advantageover banks in lending to their customers because they hold the extrathreat of stopping the supply of intermediate goods. Suppliers may alsoact as lenders of last resort, providing insurance against liquidityshocks that may endanger the survival of their customers. The relativelyhigh implicit interest rates of trade credit result from the existenceof default and insurance premia. The implications of the model areexamined empirically using parametric and nonparametric techniques on apanel of UK firms.

A test of the predictive validity of non-linear QALY models using time trade-off utilities

This paper presents a test of the predictive validity of various classes ofQALY models (i.e., linear, power and exponential models). We first estimatedTTO utilities for 43 EQ-5D chronic health states and next these states wereembedded in health profiles. The chronic TTO utilities were then used topredict the responses to TTO questions with health profiles. We find that thepower QALY model clearly outperforms linear and exponential QALY models.Optimal power coefficient is 0.65. Our results suggest that TTO-based QALYcalculations may be biased. This bias can be avoided using a power QALY model.

Economic booms, trade deficits and economic policy

Many economic booms have been accompanied by realexchange rate appreciations, large trade defcits -whichhave sometimes persisted after the return to the initialexchange rate parity- and a deteriorating traded sector.Those circumstances have typically raised the questionof the de-sirability of some stabilization policy. We show that the dynamics induced by an expectedproductivity shock in an economy where the capital stockis non-mobile across sectors, match those circumstances.Furthermore, we obtain that credit market imperfectionstend to exacerbate trade deficits, and to cause aninefficient capacity reduction in the traded sector.Some stabilization policies are explored.

Trade-off between formal and informal care in Spain

The remarkable growth of older population has moved long term care to the front ranks of the social policy agenda. Understanding the factors that determine the type and amount of formal care is important for predicting use in the future and developing long-term policy. In this context we jointly analyze the choice of care (formal, informal, both together or none) as well as the number of hours of care received. Given that the number of hours of care is not independent of the type of care received, we estimate, for the first time in this area of research, a sample selection model with the particularity that the first step is a multinomial logit model. With regard to the debate about complementarity or substitutability between formal and informal care, our results indicate that formal care acts as a reinforcement of the family care in certain cases: for very old care receivers, in those cases in which the individual has multiple disabilities, when many care hours are provided, and in case of mental illness and/or dementia. There exist substantial differences in long term care addressed to younger and older dependent people and dependent women are in risk of becoming more vulnerable to the shortage of informal caregivers in the future. Finally, we have documented that there are great disparities in the availability of public social care across regions.

Protectionist but globalised? Latin American custom duties and trade during the pre-1914 belle époque

While it is true that Latin American republics had no rival on maximising revenues from custom collection during the belle époque, this paper shows that Latin American countries were also generous importers, only behind the larger commercial countries of Western Europe in terms of imports per capita. Latin American citizens were much more linked to international trade than citizens of most regions of the world. Their relation to the world economy was tighter both via their imports and their exports relative to their population and income levels. This paper comes to show that there is no contradiction between the high custom collection by the Latin American republics and their high level of interaction with the global economy in the pre-1914 belle époque, although large country differences can be observed when descending from the regional to the national level.

Trade, markup heterogeneity and misallocations

We argue that the procompetitive effect of international trade may bring about significant welfare costs that have not been recognized. We formulate a stylized general equilibrium model with a continuum of imperfectly competitive industries to show that, under plausible conditions, a trade-induced increase in competition can actually amplify monopoly distortions. This happens because trade, while lowering the average level of market power, may increase its cross-sectoral dispersion. Using data on US industries, we document a dramatic increase in the dispersion of market power overtime. We also show evidence thattrade might be responsible for it and provide some quantifications of the induced welfare cost. Our results suggest that, to avoid some unpleasant effects of globalization, trade integration should be accompanied by procompetitive reforms (i.e., deregulation) in the nontraded sectors.

Openness, government size and the terms of trade

This paper investigates the relationship between trade openness and the size of government, both theoretically and empirically. We show that openness can increase the size of governments through two channels: (1) a terms of trade externality, whereby trade lowers the domestic cost of taxation and (2) the demand for insurance, whereby trade raises risk and public transfers. We provide a unified framework for studying and testing these two mechanisms. First, we show how their relative strength depends on a key parameter, the elasticity of substitution between domestic and foreign goods. Second, while the terms of trade externality leads to inefficiently large governments, the increase in public spending due to the demand for insurance is optimal. We show that large volumes of trade may result in welfare losses if the terms of trade externality is strong enough while small volumes of trade are always beneficial. Third, we provide new evidence on the positive association between openness and the size of government and test whether it is consistent with the terms of trade externality or the demand for insurance. Our findings suggest that the positive relationship is remarkably robust and that the terms of trade externality may be the driving force behind it, thus raising warnings that globalization may have led to inefficiently large governments.

Geographical deviations in foreign trade statistics: A study into European trade with Latin American Countries, 1925

We have analyzed the spatial accuracy of European foreign trade statistics compared to Latin American. We have also included USA s data because of the importance of this country in Latin American trade. We have developed a method for mapping discrepancies between exporters and importers, trying to isolate systematic spatial deviations. Although our results don t allow a unique explanation, they present some interesting clues to the distribution channels in the Latin American Continent as well as some spatial deviations for statistics in individual countries. Connecting our results with the literature specialized in the accuracy of foreign trade statistics; we can revisit Morgernstern (1963) as well as Federico and Tena (1991). Morgernstern had had a really pessimistic view on the reliability of this statistic source, but his main alert was focused on the trade balances, not in gross export or import values. Federico and Tena (1991) have demonstrated howaccuracy increases by aggregation, geographical and of product at the same time. But they still have a pessimistic view with relation to distribution questions, remarking that perhaps it will be more accurate to use import sources in this latest case. We have stated that the data set coming from foreign trade statistics for a sample in 1925, being it exporters or importers, it s a valuable tool for geography of trade patterns, although in some specific cases it needs some spatial adjustments.

Killing by lung cancer or by diabetes? The trade-off between smoking and obesity

As the prevalence of smoking has decreased to below 20%, health practitioners interest has shifted towards theprevalence of obesity, and reducing it is one of the major health challenges in decades to come. In this paper westudy the impact that the final product of the anti-smoking campaign, that is, smokers quitting the habit, had onaverage weight in the population. To these ends, we use data from the Behavioral Risk Factors Surveillance System,a large series of independent representative cross-sectional surveys. We construct a synthetic panel that allows us tocontrol for unobserved heterogeneity and we exploit the exogenous changes in taxes and regulations to instrumentthe endogenous decision to give up the habit of smoking. Our estimates, are very close to estimates issued in the 90sby the US Department of Health, and indicate that a 10% decrease in the incidence of smoking leads to an averageweight increase of 2.2 to 3 pounds, depending on choice of specification. In addition, we find evidence that the effectovershoots in the short run, although a significant part remains even after two years. However, when we split thesample between men and women, we only find a significant effect for men. Finally, the implicit elasticity of quittingsmoking to the probability of becoming obese is calculated at 0.58. This implies that the net benefit from reducingthe incidence of smoking by 1% is positive even though the cost to society is $0.6 billions.

Trade and productivity

We estimate the effect of international trade on average laborproductivity at the country level. Our empirical approach relies onsummary measures of trade that, we argue, are preferable on boththeoretical and empirical grounds to the one conventionally used. Incontrast to the marginally significant and non-robust effects of tradeon productivity found previously, our estimates are highly significantand robust even when we include institutional quality and geographicfactors in the empirical analysis. We also examine the channels throughwhich trade and institutional quality affect average labor productivity.Our finding is that trade works through labor efficiency, whileinstitutional quality works through physical and human capitalaccumulation. We conclude with an exploratory analysis of the role oftrade policies for average labor productivity.

On the accuracy of Latin American trade statistics: A nonparametric test for 1925

This paper proposes a nonparametric test in order to establish the level of accuracy of theforeign trade statistics of 17 Latin American countries when contrasted with the trade statistics of the main partners in 1925. The Wilcoxon Matched-Pairs Ranks test is used to determine whether the differences between the data registered by exporters and importers are meaningful, and if so, whether the differences are systematic in any direction. The paper tests for the reliability of the data registered for two homogeneous products, petroleum and coal, both in volume and value. The conclusion of the several exercises performed is that we cannot accept the existence of statistically significant differences between the data provided by the exporters and the registered by the importing countries in most cases. The qualitative historiography of Latin American describes its foreign trade statistics as mostly unusable. Our quantitative results contest this view.

Trade, extent of the market and economic growth 1960-1996

We find that trade and domestic market size are robust determinants of economic growth overthe 1960-1996 period when trade openness is measured as the US dollar value of imports andexports relative to GDP in PPP US$ ('real openness'). When trade openness is measured asthe US dollar value of imports and exports relative to GDP in exchange rate US$ ('nominalopenness') however, trade and the size of domestic markets are often non-robust determinantsof growth. We argue that real openness is the more appropriate measure of trade and that ourempirical results should be seen as evidence in favor of the extent-of-the-market hypothesis.

Why did modern trade fairs appear?

According to our interpretation, modern trade fairs started in Europe during the FirstWorld War and in its immediate aftermath. With the closing of trade movements duringthe war, many cities had to resort to the old medieval tradition of providing especialpermits to traders to guarantee them personal protection during their trade meetings.During the tough post war crisis many more cities typically industrial districts-discovered in the creation of trade fairs a powerful competitive tool to attract markettransactions. We compare these developments with the remote origins of fairs, as, inboth cases, trade fair development is a reaction to the closing of free markets under thepressure of political violence.

Trade liberalization in Uruguay: Domestic and foreign firms

The reallocation of resources is one of the main impacts of tradeliberalization processes. In the case of manufacturing industries resourceswill be reallocated from import--competing sectors to export--orientedsectors. This paper studies the effects that a more open economic environmenthas had on the entry conditions for foreign and domestic firms in Uruguayanmanufacturing industries. We find significant differences in the behaviorof foreign and domestic firms, both when they are incumbents or when theyact as potential entrants. In general, foreign firms seem to be moresuccessful in applying entry deterring strategies, due to advantages inforeign markets, deeper financial resources or better technological capabilities.They also appear to be more responsive to entry conditions when theyface the prospects of entering a given industry.

Pensamiento geográfico versus teoría de la comunicación. Hacia un modelo de análisis comunicativo del paisaje

El estudio de las implicaciones comunicativas presentes en el paisaje abre un amplio abanico de posibilidades para el tratamiento de la dualidad entre comunicación y paisaje. Aspectos como los efectos que el paisaje genera en los procesos de comunicación humana (comunicación intrapersonal e interpersonal), el seguimiento de los procesos comunicativos mediante los cuales se mercadea con el paisaje (comunicación de masas), la construcción de imaginarios individuales y colectivos a partir de la interacción entre ciudadanía y paisaje y, más recientemente, la construcción de identidades territoriales a partir de la elaboración de una imagen de marca de ciudad o de país —léase promoción turística, citymarketing y/o branding— tienen, todos ellos, unas enormes implicaciones en las sociedades contemporáneas. Es por todo ello por lo que se hace imprescindible avanzar hacia un modelo de análisis comunicativo del paisaje, objetivo posible interrelacionando la geografía y los estudios de comunicación, dos disciplinas aparentemente alejadas una de la otra en cuanto a sus orígenes y su praxis y, sin embargo, muy cercanas en lo que respecta a la evolución reciente de sus paradigmas y en lo referente al tratamiento de determinados conceptos, como los de espacio y paisaje.