The impact of agglomeration effects and accessibility on wages

This paper contributes to the empirical literature on the effects of agglomeration and road accessibility on productivity of firms by looking at the case of Spain. We approach productivity indirectly by using individual wages allocated at the NUTS III level. We use a repeated cross-section of individual micro-data for the years 1995, 2002 and 2006. The availability of interprovincial travel time data for each of the three years allows controlling for transport improvements over the period by using a market potential variable. Additionally, agglomeration is approached by employment density and we control for localization economies, human capital externalities and a large set of individual and workplace characteristics. Estimating by instrumental variables, our results show a positive and significant effect of market accessibility on wages and non linear effect for employment density.

War Signals: A Theory of Trade, Trust and Conflict

We construct a dynamic theory of civil conflict hinging on inter-ethnic trust and trade. The model economy is inhabitated by two ethnic groups. Inter-ethnic trade requires imperfectly observed bilateral investments and one group has to form beliefs on the average propensity to trade of the other group. Since conflict disrupts trade, the onset of a conflict signals that the aggressor has a low propensity to trade. Agents observe the history of conflicts and update their beliefs over time, transmitting them to the next generation. The theory bears a set of testable predictions. First, war is a stochastic process whose frequency depends on the state of endogenous beliefs. Second, the probability of future conflicts increases after each conflict episode. Third, "accidental" conflicts that do not reflect economic fundamentals can lead to a permanent breakdown of trust, plunging a society into a vicious cycle of recurrent conflicts (a war trap). The incidence of conflict can be reduced by policies abating cultural barriers, fostering inter-ethnic trade and human capital, and shifting beliefs. Coercive peace policies such as peacekeeping forces or externally imposed regime changes have instead no persistent effects.

Validation study of the French version of the observer-rater scales measuring coping and cognitive errors (CE-CAP) on a non-clinical population

This study examined the validity and reliability of the French version of two observer-rated measures developed to assess cognitive errors (cognitive errors rating system [CERS]) [6] and coping action patterns (coping action patterns rating system [CAPRS]) [22,24]. The CE measures 14 cognitive errors, broken down according to their valence positive or negative (see the definitions by A.T. Beck), and the CAP measures 12 coping categories, based on an comprehensive review literature, each broken down into three levels of action (affective, behavioural, cognitive). Thirty (N = 30) subjects recruited in a community sample participated in the study. They were interviewed according to a standardized clinical protocol: these interviews were transcribed and analysed with both observer-rated systems. Results showed that the inter-rater reliability of the two measures is good and that their internal validity is satisfactory, due to a non-significant canonical correlation between CAP and CE. With regard to discriminant validity, we found a non-significant canonical correlation between CAPRS and CISS, one of most widely used self-report questionnaire measuring coping. The same can be said for the correlation with a self-report questionnaire measuring symptoms (SCL-90-R). These results confirm the absence of confounds in the assessment of cognitive errors and of coping as assessed by these observer-rated scales and add an argument in favour of the French validation of the CE-CAP rating scales. (C) 2010 Elsevier Masson SAS. All rights reserved.

Multilateral Trade and Agricultural Policy Reforms in Sugar Markets, September 2005

We analyze the impact of trade liberalization, removal of production subsidies, and elimination of consumption distortions in world sugar markets using a partial-equilibrium international sugar model calibrated on 2002 market data and current policies. The removal of trade distortions alone induces a 27% price increase while the removal of all trade and production distortions induces a 48% increase by 2011/12 relative to the baseline. Aggregate trade expands moderately, but location of production and trade patterns change substantially. Protectionist OECD countries (the EU, Japan, the US) experience an import expansion or export reduction and significant contraction in production in unfettered markets. Competitive producers in both OECD countries (Australia) and non-OECD countries (Brazil, Cuba), and even some protected producers (Indonesia, Turkey), expand production when all distortions are removed. Consumption distortions have marginal impacts on world markets and location of production. We discuss the significance of these results in the context of mounting pressures to increase market access in highly protected OECD countries and the impact on non-OECD countries.

Sovereign Risk, Anonymous Markets, and the Effects of Globalization

The goal of this paper is to study the e¤ects of globalization on the workings of financial markets. We adopt a "technological" view of globalization, which consists of an exogenous reduction in the cost of shipping goods across di¤erent regions of the world. We model financial markets where agents anonymously trade securities issued by every other agent in the world. In the absence of frictions, we show how globalization creates trade opportunities among residents of different regions of the world, thereby raising welfare. In the presence of sovereign risk, however, there emerge two crucial interactions between trade among residents within a region and trade among residents of di¤erent regions. First, the more residents within a region trade with each other, the more they can trade with residents of other regions. Second, the possibility of trade with residents of other regions sometimes leads a government to not enforce payments by its residents, destroying trade opportunities among residents within the region. The net effect on welfare of this process of creation and destruction of trade opportunities is ambiguous. We argue that there are no policies governments can take to avoid the negative effects of globalization on trade among domestic residents. In a dynamic extension, we analyze how our results are a¤ected by reputational considerations.

Intra-Industry Trade, Multilateral Trade Integration, and Invasive Species Risk, December 2006

We analyze the linkage between protectionism and invasive species (IS) hazard in the context of two-way trade and multilateral trade integration, two major features of real-world agricultural trade. Multilateral integration includes the joint reduction of tariffs and trade costs among trading partners. Multilateral trade integration is more likely to increase damages from IS than predicted by unilateral trade opening under the classic Heckscher-Ohlin-Samuelson (HOS) framework because domestic production (the base susceptible to damages) is likely to increase with expanding export markets. A country integrating its trade with a partner characterized by relatively higher tariff and trade costs is also more likely to experience increased IS damages via expanded domestic production for the same reason. We illustrate our analytical results with a stylized model of the world wheat market.

Inclusion or Exclusion? Trade union strategies and Labor migration

Inclusion or Exclusion? Trade Union Strategies and Labor Migration This research identified and analyzed immigration-related strategies of the Finnish Construction Trade Union (FCTU) and the Service Union United (SUU); e.g. how the unions react to labor immigration, whether unions seek to include migrants in the unions, and what is migrants’ position in the unions. The two unions were chosen as the focus of the research because the workforce in the sectors they represent is migrant-dense. The study also analyzed the experiences that migrants who work in these sectors have with trade unions. The Estonian labor market situation –including the role of Estonian trade unions– was also examined as it has a considerable impact on the operating environment of the FCTU. The results of the study indicate that immigration is a contradictory issue for both unions. On the one hand, they strive to include migrants as trade union members and to defend migrants’ labor rights. On the other hand, they, together with their umbrella organization the Central Organisation of Finnish Trade Unions (SAK), seek to prevent labor immigration from outside the EU and EEA countries. They actively defend current labor immigration restrictions by drawing atten- tion to high unemployment figures and to the breaches of working conditions migrants encounter. In contrast, the employer organizations promote a more liberal state policy on labor immigration because they see it as a boost for business. Both the unions and the employer organizations ground their arguments on national interest. However, the position of the trade union movement is not uniform: unions belonging to the Confederation of Unions for Professionals and Managerial Staff in Finland (Akava) embrace more liberal labor immigration stances than the SAK. A key trade union strategy is to try to guarantee that migrants’ working condi- tions do not differ from those of the natives. The FCTU and the SUU inform migrants about Finnish collective agreements and trade union membership in the most common migrant languages. This is important for the unions because it is not in their interest that migrants’ working conditions are undercut. The interviewed migrants said that natives had more negotiating power with employers, which is often negatively portrayed in migrants’ working conditions. Migrants perceive that trade unions have an important role in protecting their working conditions. However, they stressed that migrants’ knowledge of unions is often very limited. The number of migrants in both two unions studied here is increasing. Espe- cially in the SUU, a considerable proportion of the new members are migrants. The FCTU is in a more challenging situation than the SUU because migrant construc- tion workers often work only for short periods in Finland and are consequently not interested in becoming union members. The unions’ strategies partly differ: the FCTU was the first Finnish trade union to establish a trade union branch/lo- cal for migrant members. The goal is to facilitate migrants’ inclusion in the union and to highlight the specific problems they face. The SUU, for its part, insists that such a special strategy would exclude migrants within the union organization. Despite the unions’ strategies, migrants are still underrepresented as union members and officials, which some of the interviewed migrants saw as a problem. Immigrants’ perception of trade unions was pragmatic: they had joined unions when membership yielded concrete benefits. In spite of the unions’ strategies, migrants –and temporary migrants– encoun- ter specific problems in terms of working conditions. Both unions demand more state intervention to protect migrants’ labor rights because overseeing working conditions consumes union resources. However, without the unions’ intervention, these problems would be more common than is currently the case. For instance, some of the interviewed migrants had received trade union assistance in claim- ing unpaid wages. The study demonstrated with the help of building on Walter Korpi’s power resources theory, that immigration is a power resource issue for the unions: suc- cessful immigration-related strategies strengthen unions –and vice versa. The research also showed how the unions’ operating environments constrain and enable their immigration-related strategies. This study has illuminated a previously ignored dimension: the immigrant- inclusive strategies of the Finnish trade unions. The research material consists of 78 qualitative interviews, observation in trade union events, and trade unions’ and employer organizations’ public state- ments.

Neoliberalism and global capital mobility: a necessary reconsideration of textbook trade theory

Textbook theory ignores capital flows: trade determines exchange rates and specialisation. Approaches taking the effects of capital movements adequately into account are needed, and a new theory of economic policy including measures to protect the real economy from external volatility. Equilibrating textbook mechanisms cannot work unless trade-caused surpluses and deficits set exchange rates. To allow orthodox trade theory to work one must hinder capital flows from destroying its very basis, which the IMF and wrong regulatory decisions have done, penalising production and trade. A new, real economy based theory is proposed, a Neoclassical agenda of controlling capital flows and speculation.

Assessing the dynamics of terms of trade in a model of cumulative causation and structural change

ABSTRACT The motivation for this paper stems from the steady decline in the share of consumer expenditures on goods produced in the global south, coupled with the (empirically ambiguous) Singer/Prebisch hypothesis that this can be explained by a secular decline in the southern terms of trade. Drawing on these sources of inspiration, the paper sets out to study the dynamics of the terms of trade using a multi-sector growth model based on the principle of cumulative causation. The upshot is a North-South model of growth and trade in which the evolution of the terms of trade depends on differential rates of productivity growth in different sectors of the economy - and in which terms of trade dynamics may not be the best guide as to whether or not there is an uneven development problem.

Factors that have shaped the eEvolution of bilateral trade between Canada and Colombia in the long run (1953-2003)

Currently bilateral trade between Canada and Colombia is low. In 2003, this trade amounted to US $489 million, with Co­lombian imports from Canada totaling US $ 213 million (DOTS, 2004). Canada supplied approximately 4.0% of Colombia’s total trade (total imports and total ex­ports), in contrast Colombia supplied only around 0.1% of the Canadian total trade. In 2005, Colombia was the third largest Canadian partner in South America after Brazil and Venezuela. The objective of this paper is to analyze the trade performance between Canada and Colombia using a modified gravity equation to identify the most relevant historical factors that have shaped the evo­lution of this bilateral trade in the long run (during the period from 1953 to 2003). The analysis includes traditional economic va­riables (such as population and income of the importing and exporting countries). In order to understand the qualitative nature of the evolution of this bilateral trade the second objective is to review the evolving nature of trade including commodity com­position and trade characteristics.  

Bilateral trade between New Zealand & the pacific alliance: perspectives and possibilities for further trade engagement

Due to the rapid and effective success of countries in the Pacific Rim for the last two decades, current world trade attention has been focussed on what appears to be the common vision of the ‘Pacific Century’. Reducing attention from the Atlantic and focusing it on the Pacific represents a new challenge for countries touching this ocean. The main Latin American economies bordering the pacific have taken upon this challenge with the creation of the Pacific Alliance in 2011. In this way, Chile, Colombia, Mexico and Peru intend to penetrate and increase trade with the region by forming a coalition. The Pacific Alliance has attracted international attention, interest and support from nations around the world, counting 32 countries as observers; 7 are actually located in the region and six of them rank amongst the Top 15 world economies. As is expected, the possibility of closer trade engagement with big players such as China, India, Japan, South Korea or Australia absorb the main attention of media, governments and academics alike, leaving behind other feasible and possible opportunities unattended. That is precisely the case of New Zealand and its favourable commerce opportunities with the Pacific Alliance. The following document will study the major trends and variations in trade between New Zealand, the Pacific Alliance and its members between 2010 and 2014. Proving that mutual trade is most likely to keep on growing.

Essays on International trade and economic growth

At present, we are witnessing globalization as a truly worldwide phenomenon. Trade agreements among differing countries, a reduction in trade costs, the mobility of production factors, the free flow of information and so on are all proof of the present day era of globalization. Countries are trading with one another more and more every day and the effects of international trade on economies represent a central discussion in all economic spheres. In spite of increasing trade around the world and the promotion of globalization by multilateral organisms such as WTO and IMF, the effects of international trade are not yet clear. Economics literature concerning the effects of international trade on economic growth and welfare remains ambiguous in terms of both theoretical models and empirical research. The present thesis tries to contribute to the theoretical debate surrounding the effects of dynamic international trade, focusing in particular on the implications for economic growth, welfare and changes in the preferences of individuals.

The 2002 US Farm Bill: what's in it for CAP reform?

The 2002 U.S. Farm Bill (the Farm Security and Rural Investment Act or FSRIA) provides considerably more government subsidies for U.S. agriculture than Congress envisaged when it passed the preceding 1996–2002 FAIR Act. We review the FAIR record, showing how government subsidies increased greatly beyond those originally scheduled. For FSRIA, we outline key commodity, trade, and conservation and environmental provisions. We expect that the commodity programmes will: (a) encourage production when the market calls for less; (b) significantly increase subsidies over FAIR baseline subsidies; (c) press against current WTO and possible Doha Round support limits; and (d) aggravate trading partners. Finally, we suggest two lessons from the U.S. policy experience that might benefit those working on CAP and WTO reform. First, past research shows that farm programmes have little to do with the economic health of rural communities. Second, programme transparency, and especially public disclosure of the level of payments going to individual farmers, by name, influences the farm policy debate. Personalized data show what economists have long maintained—that the bulk of programme benefits go to a relatively few, large, producers—but do so in a way that captures the public and policy-makers' attention

Explaining the 'health check' of the Common Agricultural Policy: budgetary politics, globalisation and paradigm change revisited

Three potential explanations of past reforms of the Common Agricultural Policy (CAP) can be identified in the literature: a budget constraint, pressure from General Agreement on Tariffs and Trade/World Trade Organization (GATT/WTO) negotiations or commitments and a paradigm shift emphasising agriculture’s provision of public goods. This discussion on the driving forces of CAP reform links to broader theoretical questions on the role of budgetary politics, globalisation of public policy and paradigm shift in explaining policy change. In this article, the Health Check reforms of 2007/2008 are assessed. They were probably more ambitious than first supposed, although it was a watered-down package agreed by ministers in November 2008. We conclude that the Health Check was not primarily driven by budget concerns or by the supposed switch from the state-assisted to the multifunctional policy paradigm. The European Commission’s wish to adopt an offensive negotiating stance in the closing phases of the Doha Round was a more likely explanatory factor. The shape and purpose of the CAP post-2013 is contested with divergent views among the Member States.

Ion flows and heating at a contracting polar-cap boundary: GISMOS observations indicating viscous-like interaction on the flanks of the magnetotail

This paper complements that in this issue by Clauer et al. concerning the international GISMOS campaign of 3–5 June 1987. From a detailed study of the EISCAT data, the polar-cap boundary, as defined by an almost shear east-west convection reversal, is found to contract across the EISCAT field of view between 04 and 07 MLT. An annulus of enhanced ion temperature and non-thermal plasma is observed immediately equatorward of the contracting boundary due to the lag in the response of the neutral-wind pattern to the change in ion flows. The ion flow inside the polar cap and at the boundary is shown to be relatively smooth, compared with that in the auroral oval, at 15-second resolution. The flow at the boundary is directed poleward, with velocities which exceed that of the boundary itself. The effect of velocity shears on the beamswinging technique used to derive the ion flows has been analysed in detail and it is found that spurious flows across a moving boundary can be generated. However, these are much smaller than the observed flows into the polar cap and cannot explain the 7 kV potential difference across the observed segment of the cap boundary between 04:30–06:30 UT. The ion temperature enhancements at the two observing azimuths is used to define the boundary orientation. The results are consistent with recent observations of slow anti-sunward flow of closed field lines on the flanks of the geomagnetic tail, which appears to be generated by some form of “viscous” coupling to the magnetosheath plasma.