On Globalization and the Growth of Governments

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.

Competing engines of growth: Innovation and standardization

We study a dynamic general equilibrium model where innovation takes theform of the introduction of new goods whose production requires skilled workers.Innovation is followed by a costly process of standardization, whereby these newgoods are adapted to be produced using unskilled labor. Our framework highlightsa number of novel results. First, standardization is both an engine of growth anda potential barrier to it. As a result, growth is an inverse U-shaped function ofthe standardization rate (and of competition). Second, we characterize the growthand welfare maximizing speed of standardization. We show how optimal protection of intellectual property rights affecting the cost of standardization vary withthe skill-endowment, the elasticity of substitution between goods and other parameters. Third, we show that, depending on how competition between innovatingand standardizing firms is modelled and on parameter values, a new type of multiplicity of equilibria may arise. Finally, we study the implications of our model forthe skill-premium and we illustrate novel reasons for linking North-South trade tointellectual property rights protection.

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.

The determinants of capital intensity in Japan and the U.S

We estimate the determinants of capital intensity in Japan and the US, characterized by striking different paths. We augment an otherwise standard Constant Elasticity of Substitution (CES) model with demand-side considerations, which we find especially relevant in the US. In this augmented setting, the elasticity of substitution between capital and labor is placed around 0.85 in Japan, and 0.30 in the US. We also find evidence of biased technical change, which is capital-saving in Japan but labor-saving in the US. These differences help us explain the diverse experience in the capital deepening process of these economies, and lead us to conclude that demand-side drivers may also be relevant to account for different growth experiences. A close look at the nature of technological change is also needed before designing one-size-fits-all industrial, economic growth, and/or labor market policies.

Alternative methodology for calculating the modulus of elasticity of wooden beams of structural dimensions

This study aims to present an alternative calculation methodology based on the Least Squares Method for determining the modulus of elasticity in bending wooden beams of structural dimensions. The equations developed require knowledge of three or five points measured in displacements along the piece, allowing greater reliability on the response variable, using the statistical bending test at three points and non-destructively, resulting from imposition of measures from small displacements L/300 and L/200, the largest being stipulated by the Brazilian norm NBR 7190:1997. The woods tested were Angico, Cumaru, Garapa and Jatoba. Besides obtaining the modulus of elasticity through the alternative methodology proposed, these were also obtained employing the Brazilian norm NBR 7190:1997, adapted to the condition of non-destructive testing (small displacements) and for pieces of structural dimensions. The results of the modulus of elasticity of the four species of wood according to both calculation approaches used proved to be equivalent, implying the good approximation provided by the methodology of calculation adapted from the Brazilian norm.

Unemployment insurance in the presence of an informal sector

We study the effect of UI benefits in a typical developing country where the informal sector is sizeable and persistent. In a partial equilibrium environment, ruling out the macroeconomic consequences of UI benefits, we characterize the stationary equilibrium of an economy where policyholders may be employed in the formal sector, short-run unemployed receiving UI benefits or long-run unemployed without UI benefits. We perform comparative static exercises to understand how UI benefits affect unemployed worker´s effort to secure a formal job, their labor supply in the informal sector and leisure time. Our model reveals that an increase in UI benefits generates two opposing effects for the short-run unemployed. First, since search efforts cannot be monitored it generates moral hazard behaviours that lower effort. Second, it generates an income effect as it reduces the marginal cost of searching for a formal job and increases effort.The overall effect is ambiguous and depends on the relative strength of these two effects. Additionally, we show that an increase in UI benefits increases the efforts of long-run unemployed workers. We provide a simple simulation exercise which suggests that the income effect pointed out is not necessarily of second-order importance in comparison with moral hazard strength. This result softens the widespread opinion, usually based on the microeconomic/partial equilibrium argument that the presence of dual labor markets is an obstacle to providing UI in developing countries.

Evidence of induced innovation in US Sectoral Capital’s Shares

We use annual data on capital’s share and relative factor prices from 35 US industries from 1960 to 2005 to test the induced innovation hypothesis. We derive, from a production function framework, testable implications for the effect of contemporaneous and lagged factor price ratios on capital’s share of production. The predicted effect is positive or negative depending on the elasticity of substitution between labor and capital. From panel regressions, the estimated effect of the contemporaneous factor price ratio implies an elasticity of substitution that is less than unity, consistent with the consensus from the literature. Based on this, our negative estimated effects for lagged price ratios are both statistically significant and consistent with the induced innovation hypothesis.

The elasticity of demand is about occupancy, not prices: building European demand curves based on occupancy elasticity

The peak congestion of the European grid may create significant impacts on system costs because of the need for higher marginal cost generation, higher cost system balancing and increasing grid reinforcement investment. The use of time of use rates, incentives, real time pricing and other programmes, usually defined as Demand Side Management (DSM), could bring about significant reductions in prices, limit carbon emissions from dirty power plants, and improve the integration of renewable sources of energy. Unlike previous studies on elasticity of residential electricity demand under flat tariffs, the aim of this study is not to investigate the known relatively inelastic relationship between demand and prices. Rather, the aim is to assess how occupancy levels vary in different European countries. This reflects the reality of demand loads, which are predominantly determined by the timing of human activities (e.g. travelling to work, taking children to school) rather than prices. To this end, two types of occupancy elasticity are estimated: baseline occupancy elasticity and peak occupancy elasticity. These represent the intrinsic elasticity associated with human activities of single residential end-users in 15 European countries. This study makes use of occupancy time-series data from the Harmonised European Time Use Survey database to build European occupancy curves; identify peak occupancy periods; draw time use demand curves for video and TV watching activity; and estimate national occupancy elasticity levels of single-occupant households. Findings on occupancy elasticities provide an indication of possible DSM strategies based on occupancy levels and not prices.

Expedient, accurate methods for the determination of the degree of substitution of cellulose carboxylic esters: Application of UV-vis spectroscopy (dye solvatochromism) and FTIR

Two techniques, namely UV-vis- and FTIR spectroscopy, have been employed in order to calculate the degree of substitution (DS) of cellulose carboxylic esters, including acetates, CAs, butyrates, CBs, and hexanoates, CHs. Regarding UV-vis spectroscopy, we have employed a novel approach, based on measuring the dependence of lambda(max) of the intra-molecular charge-transfer bands of polarity probes adsorbed on DS of the ester films (solvatochromism). Additionally, we have revisited the use of FTIR for DS determination. Several methods have been used in order to plot Beer`s law graph, namely: Absorption of KBr pellets, pre-coated with CA: reflectance (DRIFTS) of CAs-KBr solid-solid mixtures with, or without the use of 1.4-dicyanobenzene as an internal reference; reflectance of KBr powder pre-coated with CA. The methods indicated are simple, fast, and accurate, requiring much less ester than the titration method. The probe method is independent of the experimental variables examined. (c) 2010 Published by Elsevier Ltd.

Price elasticity of demand for cigarettes : The Case of Sweden

Due to health problems and the negative externalities associated with cigarette consumption, many governments try to discourage cigarette consumption by increasing its price through taxation. However, cigarette, like the other addictive goods, is viewed as that it is not sensitive to demand rules and the market forces. This study analyses the effect of price increase on cigarette consumption. We used Swedish time series data from 1970 to 2010. Our results reveal that though cigarette is addictive substance its demand is sensitive to changes in the price. Estimates from this study indicate short-run price-elasticity of -0.29 and the long run price elasticity of -0.47.

Implications of ernbodied technological change for development economics

Employing a embodied technologic change model in which the time decision of scrapping old vintages of capital and adopt newer one is endogenous we show that the elasticity of substitutions among capital and labor plays a key role in determining the optimum life span of capital. In particular, for the CD case the life span of capital does not depend on the relative price of it. The estimation of the model's long-run investment function shows, for a Panel data set consisting of 125 economies for 25 years, that the price elasticity of investment is lower than one; we rejected the CD specification. Our calibration for the US suggests 0.4 for the technical elasticity of substitution. In order to get a theoretical consistent concept of aggregate capital we derive the relative price profile for a shadow second-hand market for capital. The shape of the model's theoretical price curve reproduces the empírical estimation of it. \lVe plug the calibrate version of the long-run solution of the model to a cross-section of economies data set to get the implied TFP, that is, the part of the productivity which is not explained by the model. We show that the mo dei represent a good improvement, comparing to the standard neoc!assical growth model with CD production function and disembodied technical change, in accounting the world diversity in productivity. In addition the model describes the fact that a very poor economy can experience fast growth based on capital accumulation until the point of becoming a middle income economy; from this point on it has to rely on TFP increase in order to keep growing.

Effect of thermocycling on bond strength and elasticity of 4 long-term soft denture liners

Statement of problem. Two problems found in prostheses with soft liners are bond failure to the acrylic resin base and loss of elasticity due to material aging.Purpose. This in vitro study evaluated the effect of thermocycling on the bond strength and elasticity of 4 long-term soft denture liners to acrylic resin bases.Material and methods. Four soft lining materials (Molloplast-B, Flexor, Permasoft, and Pro Tech) and 2 acrylic resins (Classico, and Lucitone 199) were processed for testing according to manufacturers' instructions. Twenty rectangular specimens (10 X 10-mm(2) cross-sectional area) and twenty cylinder specimens (12.7-mm diameter X 19.0-mm height) for each liner/resin combination were used for the tensile and deformation tests, respectively. Specimen shape and liner thickness were standardized. Samples were divided into a test group that was thermocycled 3000 times and a control group that was stored for 24 hours in water at 37degreesC. Mean bond strength, expressed in megapascals (Wa), was determined in the tensile test with the use of a universal testing machine at a crosshead speed of 5 mm/min. Elasticity, expressed as percent of permanent deformation, was calculated with an instrument for measuring permanent deformation described in ADA/ANSI specification 18. Data from both tests were examined with 1-way analysis of variance and a Tukey test, with calculation of a Scheffe interval at a 95% confidence level.Results. In the tensile test under control conditions, Molloplast-B (1.51 +/- 0.28 MPa [mean SD]) and Pro Tech (1.44 +/- 0.27 MPa) liners had higher bond strength values than the others (P < .05). With regard to the permanent deformation test, the lowest values were observed for Molloplast-B (0.48% +/- 0.19%) and Flexor (0.44% +/- 0.14%) (P < .05). Under thermocycling conditions, the highest bond strength occurred with Molloplast-B (1.37 +/- 0.24 MPa) (P < .05) With regard to the deformation test, Flexor (0.46% +/- 0.13%) and Molloplast-B (0.44% +/- 0.17%) liners had lower deformation values than the others (P < .05).Conclusion. The results of this in vitro study indicated that bond strength and permanent deformity values of the 4 soft denture liners tested varied according to their chemical composition. These tests are not completely valid for application to dental restorations because the forces they encounter are more closely related to shear and tear. However, the above protocol serves as a good method of investigation to evaluate differences between thermocycled and control groups.

THEORY OF ELASTICITY OF THE ABRIKOSOV FLUX-LINE LATTICE FOR UNIAXIAL SUPERCONDUCTORS - PARALLEL FLUX LINES

In this paper, we consider the extension of the Brandt theory of elasticity of the Abrikosov flux-line lattice for a uniaxial superconductor for the case of parallel flux lines. The results show that the effect of the anisotropy is to rescale the components of the wave vector k and the magnetic field and order-parameter wave vector cut off by a geometrical parameter previously introduced by Kogan.