Cognition, Resources, and Institutions in the Explanation of Attitudes to Free Trade

This article proposes a framework for the analysis of attitudes to foreign trade policies that challenges the traditional skill-endowment approach. The traditional approach assumes informed individuals who calculate the costs and benefits of alternative policies. We propose that individuals lack information and that their positions rest on economic vulnerability, as mediated through risk-aversion. We also stress the role of environmental signals and political endorsements in guiding individuals' views on trade policy. We test this alternative approach with a Spanish survey conducted in May 2009 and the ISSP survey conducted in 2003 in a large number of less developed and more developed countries. The Spanish data show that the population is largely uninformed and that their ideas about the consequences of free trade policy do not explain attitudes among different socio-demographic groups. Meanwhile, the ISSP data contradict important aspects of the traditional approach and are consistent with the alternative approach.

Migration and trade: Theory with an Application to the Eastern- Western European Integration

The remarkable increase in trade flows and in migratory flows of highly educated people are two important features of globalization of the last decades. This paper extends a two-country model of inter- and intraindustry trade to a rich environment featuring technological differences, skill differences and the possibility of international labor mobility. The model is used to explain the patterns of trade and migration as countries remove barriers to trade and to labor mobility. We parameterize the model to match the features of the Western and Eastern European members of the EU and analyze first the effects of the trade liberalization which occured between 1989 and 2004, and then the gains and losses from migration which are expected to occur if legal barriers to labor mobility are substantially reduced. The lower barriers to migration would result in significant migration of skilled workers from Eastern European countries. Interestingly, this would not only benefit the migrants and most Western European workers but, via trade, it would also benefit the workers remaining in Eastern Europe. Key Words: Skilled Migration, Gains from Variety, Real Wages, Eastern-Western Europe. JEL Codes: F12, F22, J61.

The political ecology of Jatropha plantations for biodiesel in Tamil Nadu, India

Jatropha curcas is promoted internationally for its presumed agronomic viability in marginal lands, economic returns for small farmers, and lack of competition with food crops. However, empirical results from a study in southern India revealed that Jatropha cultivation, even on agricultural lands, is neither profitable, nor pro-poor. We use a political ecology framework to analyze both the discourse promoting Jatropha cultivation and its empirical consequences. We deconstruct the shaky premises of the dominant discourse of Jatropha as a “pro-poor” and “pro-wasteland” development crop, a discourse that paints a win-win picture between poverty alleviation, natural resource regeneration, and energy security goals. We then draw from field-work on Jatropha plantations in the state of Tamil Nadu to show how Jatropha cultivation favors resource-rich farmers, while possibly reinforcing existing processes of marginalization of small and marginal farmers.

Trade liberalization, competition and growth

Increasing evidence support the claim that international trade enhances innovation and productivity growth through an increase in competition. This paper develops a two-country endogenous growth model, with firm specific R&D and a continuum of oligopolistic sectors under Cournot competition to provide a theoretical support to this claim. Since countries are assumed to produce the same set of varieties, trade openness makes markets more competitive, reducing prices and increasing quantities. Under Cournot competition, trade is pro-competitive. Since firms undertake cost reducing innovations, the increase in production induced by a more competitive market push firms to innovate more. Consequently, a reduction on trade barriers enhances growth by reducing domestic firm's market power.

Public particiation and the legitimacy of intergovernmental decision-making : a focus on the World Trade Organization

The legitimacy of the WTO's decision-making process has always been questioned, and many have advocated public participation mechanisms as a remedy. The present study considers the limits and potential of these mechanisms by advancing a conceptual framework, which distinguishes the four 'implementation parameters' of public participation: the goal, the object, the modalities, and the actors. It addresses the issue of legitimacy by considering to what extent, and by virtue of which legal developments, one can see implementing the democratic principle as a goal for public participation in the context of the WTO. By analyzing the institutional structure of the WTO and its different types of decisions, it then outlines how this goal should influence the object and modalities of public participation, which decision-making procedures should be opened to public participation, and how the mechanisms should be implemented in practice. Finally, it suggests speciflrc amendments to existing WTO affangements on public participation

Linkages of dietary patterns, international trade and land use: the case of olive oil in the European Union

Within only two decades olive oil developed from a niche product which could hardly be found in food stores outside the producing regions towards an integrated component in the diets of industrial countries. This paper discusses the impacts of the promotion of the “healthy Mediterranean diet” on land use and agro-ecosystems in the producing countries. It examines the dynamics of olive oil production, trade and consumption in the EU15 in the period 1972 to 2003 and the links between dietary patterns, trade and land use. It analyses the underlying socio-economic driving forces behind the increasing spatial disconnect between production and consumption of olive oil in the EU15 and in particular in Spain, the world largest producer during the last three decades. In the observed period olive oil consumption increased 16 fold in the non-producing EU15 countries. In the geographically limited producing regions like Spain, the 5 fold increase in export production was associated with the rapid industrialization of olive production, the conversion of vast Mediterranean landscapes to olive monocultures and a range of environmental pressures. High amounts of subsidies of the European Common Agricultural Policy and feedback loops within production and consumption systems were driving the transformation of the olive oil system. Our analysis indicates the process of change was not immediately driven by increases in demand for olive oil in non-producing countries, but rather by the institutional setting of the European Union and by concerted political interventions.

The ‘Dragon’ and the ‘Elephant’ and Global Imbalances

Global financial imbalances receive a great deal of attention in relation to the emerging economies China and India. This chapter analyzes this relation, but argues first that they are actually re-balancing the existing structural inequality in the world economy, in which for so long only the Western economies and Japan dominated economic growth and international trade, moving towards a more multi-polar world economy. China in particular, with its rapid export-led growth, has indeed been part and parcel of the emerging financial imbalances, feeding the ‘over-consumption’ in the US and using its accumulating international reserves in buying US-treasury bonds. Finance therefore is moving to the economy that ‘least needs it’. This imbalance can only be redressed if the US (and some of the other OECD countries) start saving more and consuming less (and become more competitive), with China further stimulating domestic demand (which it already did in response to the crisis). China and to a lesser extend India, as emerging large economies and a more important roles in global markets, also contribute to new imbalances, such as the influence of the insatiable appetite for resources (carbon-hydrates, minerals and bio-mass) of these relatively energy-inefficient economies, while at the same time attracting an increasing share of FDI towards them. The chapter finally raises the issue that these three mentioned imbalances make it more difficult for developing countries (except for those who are resource-rich) to get access to the necessary development finance.

Trade, firm selection, and innovation: the competition channel

The availability of rich firm-level data sets has recently led researchers to uncover new evidence on the effects of trade liberalization. First, trade openness forces the least productive firms to exit the market. Secondly, it induces surviving firms to increase their innovation efforts and thirdly, it increases the degree of product market competition. In this paper we propose a model aimed at providing a coherent interpretation of these findings. We introducing firm heterogeneity into an innovation-driven growth model, where incumbent firms operating in oligopolistic industries perform cost-reducing innovations. In this framework, trade liberalization leads to higher product market competition, lower markups and higher quantity produced. These changes in markups and quantities, in turn, promote innovation and productivity growth through a direct competition effect, based on the increase in the size of the market, and a selection effect, produced by the reallocation of resources towards more productive firms. Calibrated to match US aggregate and firm-level statistics, the model predicts that a 10 percent reduction in variable trade costs reduces markups by 1:15 percent, firm surviving probabilities by 1 percent, and induces an increase in productivity growth of about 13 percent. More than 90 percent of the trade-induced growth increase can be attributed to the selection effect.

The Quest for Regulating the Global Diamond Trade

Campaign efforts by NGOs initially put conflict diamonds on the global radar screen in the late 1990s. In response, the Kimberley Process (KP), a negotiation forum between states, NGOs, and industry, was formed to discuss possible solutions to curb the trade in conflict diamonds. Less than three years later, a voluntary, global certification named the Kimberley Process Certification Scheme (KPCS) was adopted. The KPCS regulates the trade of rough diamonds by certifying all legitimate diamonds. This paper outlines the problem of conflict diamonds, how a global campaign raised awareness about the issue, and how the process of solution building unfolded in the KP. My analysis focuses on the diverse set of actors (NGOs, states, and industry) and their changing interactions over the course of the campaign and global regulation efforts. I conclude with several key lessons that capture important elements observed in this case study.

Sedimentology, geochemistry and mineralogy of the Paleocene-Eocene thermal maximum (PETM) : sediment records from Egypt, India and Spain

A gradual increase in Earth's surface temperatures marking the transition from the late Paleocene to early Eocene (55.8±0.2Ma), represents an extraordinary warming event known as Paleocene-Eocene Thermal Maximum (PETM). Both marine and continental sedimentary records during this period reveal evidences for the massive injection of isotopically light carbon. The carbon dioxide injection from multiple potential sources may have triggered the global warming. The importance of the PETM studies is due to the fact that the PETM bears some striking resemblances to the human-caused climate change unfolding today. Most notably, the culprit behind it was a massive injection of heat-trapping greenhouse gases into the atmosphere and oceans, comparable in volume to what our persistent burning of fossil fuels could deliver in coming centuries. The exact knowledge of what went on during the PETM could help us to foresee the future climate change. The response of the oceanic and continental environments to the PETM is different. Many factors might control the response of the environments to the PETM such as paleogeography, paleotopography, paleoenvironment, and paleodepth. To better understand the mechanisms triggering PETM events, two different environments were studied: 1) shallow marine to inner shelf environment (Wadi Nukhul, Sinai; and the Dababiya GSSP, Luxor, Egypt), and 2) terrestrial environments (northwestern India lignite mines) representing wetland, and fluvial environments (Esplugafreda, Spain) both highlighting the climatic changes observed in continental conditions. In the marine realm, the PETM is characterized by negative ö13Ccar and ô13Corg excursions and shifts in Ô15N to ~0%o values above the P/E boundary and persisting along the interval suggesting a bloom and high production of atmospheric N2-fixers. Decrease in carbonate contents could be due to dissolution and/or dilution by increasing detrital input. High Ti, K and Zr and decreased Si contents at the P/E boundary indicate high weathering index (CIA), which coincides with significant kaolinite input and suggests intense chemical weathering under humid conditions at the beginning of the PETM. Two anoxic intervals are observed along the PETM. The lower one may be linked to methane released from the continental shelf with no change in the redox proxies, where the upper anoxic to euxinic conditions are revealed by increasing U, Mo, V, Fe and the presence of small size pyrite framboids (2-5fim). Productivity sensitive elements (Cu, Ni, and Cd) show their maximum concentrated within the upper anoxic interval suggesting high productivity in surface water. The obtained data highlight that intense weathering and subsequent nutrient inputs are crucial parameters in the chain of the PETM events, triggering productivity during the recovery phase. In the terrestrial environments, the establishment of wetland conditions and consequence continental climatic shift towards more humid conditions led to migration of modern mammals northward following the extension of the tropical belts. Relative ages of this mammal event based on bio-chemo- and paleomagnetic stratigraphy support a migration path originating from Asia into Europe and North America, followed by later migration from Asia into India and suggests a barrier to migration that is likely linked to the timing of the India-Asia collision. In contrast, at Esplugafereda, northeastern Spain, the terrestrial environment reacted differently. Two significant S13C shifts with the lower one linked to the PETM and the upper corresponding to the Early Eocene Thermal Maximum (ETM2); 180/160 paleothermometry performed on two different soil carbonate nodule reveal a temperature increase of around 8°C during the PETM. The prominent increase in kaolinite content within the PETM is linked to increased runoff and/or weathering of adjacent and coeval soils. These results demonstrate that the PETM coincides globally with extreme climatic fluctuations and that terrestrial environments are very likely to record such climatic changes. - La transition Paléocène-Eocène (55,8±0,2 Ma) est marquée par un réchauffement extraordinaire communément appelé « Paleocene-Eocene Thermal Maximum » (PETM). Les données géochimiques caractérisant les sédiments marins et continentaux de cette période indiquent que ce réchauffement a été déclenché par une augmentation massive de CO2 lié à la déstabilisation des hydrates de méthane stockés le long des marges océaniques. L'étude des événements PETM constitue donc un bon analogue avec le réchauffement actuel. Le volume de CO2 émis durant le PETM est comparable avec le CO2 lié à l'activité actuelle humaine. La compréhension des causes du réchauffement du PETM peut être cruciale pour prévoir et évaluer les conséquences du réchauffement anthropogénique, en particulier les répercussions d'un tel réchauffement sur les domaines continentaux et océaniques. De nombreux facteurs entrent en ligne de compte dans le cas du PETM, tels que la paléogéographie, la paléotopographie et les paléoenvironnement. Pour mieux comprendre les réponses environnementales aux événements du PETM, 2 types d'environnements ont été choisis : (1) le domaine marin ouvert mais relativement peu profond (Wadi Nukhul. Sinai, Dababiya, Luxor, Egypte), (2) le milieu continental marécageux humide (mines de lignite, Inde) et fluviatile, semi-aride (Esplugafreda, Pyrénées espagnoles). Dans le domaine marin, le PETM est caractérisé par des excursions négatives du ô13Ccar et ô13Corg et un shift persistant des valeurs de 815N à ~ 0 %o indiquant une forte activité des organismes (bactéries) fixant l'azote. La diminution des carbonates observée durant le PETM peut-être due à des phénomènes de dissolution ou une augmentation des apports terrigènes. Des taux élevés en Ti, K et Zr et une diminution des montants de Si, reflétés par des valeurs des indices d'altération (CIA) qui coïncident avec une augmentation significative des apports de kaolinite impliquent une altération chimique accrue, du fait de conditions plus humides au début du PETM. Deux événements anoxiques globaux ont été mis en évidence durant le PETM. Le premier, situé dans la partie inférieur du PETM, serait lié à la libération des hydrates de méthane stockés le long des talus continentaux et ne correspond pas à des variations significatives des éléments sensibles aux changements de conditions redox. Le second est caractérisé par une augmentation des éléments U, Mo, V et Fe et la présence de petit framboids de pyrite dont la taille varie entre 2 et 5pm. Le second épisode anoxique est caractérisé par une forte augmentation des éléments sensibles aux changements de la productivité (Cu, Ni et Co), indiquant une augmentation de la productivité dans les eaux de surface. Les données obtenues mettent en évidence le rôle crucial joué par l'altération et les apports en nutriments qui en découlent. Ces paramètres sont cruciaux pour la succession des événements qui ont conduit au PETM, et plus particulièrement l'augmentation de la productivité dans la phase de récupération. Durant le PETM, le milieu continental est caractérisé par l'établissement de conditions humides qui ont facilité voir provoqué la migration des mammifères modernes qui ont suivi le déplacement de ces ceintures climatiques. L'âge de cette migration est basé sur des arguments chimiostratigraphiques (isotopes stables), biostratigraphiques et paléomagnétiques. Les données bibliographiques ainsi que celles que nous avons récoltées en Inde, montrent que les mammifères modernes ont d'abord migré depuis l'Asie vers l'Europe, puis dans le continent Nord américain. Ces derniers ne sont arrivés en Inde que plus tardivement, suggérant que le temps de leur migration est lié à la collision Inde-Asie. Dans le Nord-Est de l'Espagne (Esplugafreda), la réponse du milieu continental aux événements PETM est assez différente. Comme en Inde, deux excursions signicatives en ô13C ont été observées. La première correspond au PETM et la seconde est corrélée avec l'optimum thermique de l'Eocène précoce (ETM2). Les isotopes stables de l'oxygène mesurés 2 différents types de nodules calcaires provenant de paléosols suggère une augmentation de 10°C pendant le PETM. Une augmentation simultanée des taux de kaolinite indique une intensification de l'altération chimique et/ou de l'érosion de sols adjacents. Ces résultats démontrent que le PETM coïncide globalement avec des variations climatiques extrêmes qui sont très aisément reconnaissables dans les dépôts continentaux.

Triassic stratigraphic evolution of the Arabian-Greater India embayment of the southern Tethys margin

An exceptional, tectonically remarkably unaffected, nearly 200 m-thick continuous section of hemipelagic and turbiditic sediments, covering most of the Triassic is described from the Batain Complex of north-eastern Oman. According to conodont and radiolarian data the sequence spans the late Scythian to the early Norian, a time period of nearly 30 M. Coupled with a high resolution stratigraphy, the lithostratigraphy, sedimentology, as well as sequence and isotope stratigraphy of the section are documented. For the Triassic of the Batain Plain we propose the new name Sal Formation, which replaces the formerly used Matbat Formation, and subdivide it into three new members. The Sal Formation was deposited on the proximal continental margin of northeastern Arabia and records various depositional environments. The lower member is interpreted as the distal part of a homoclinal ramp which evolves to a distally steepened ramp during time of deposition of the middle member. The upper member displays a toe of slope position which is indicated by an increase of proximal turbidites. These sediments form part of a segment of the Neo-Tethyan embayment between Arabia and India. The stratigraphic analysis indicates highly varying sedimentation rates from a minimum of 2 m/M gamma around the Anisian/Ladinian boundary up to 15 m/M gamma during the Lower and Upper Triassic. Sequence-stratigraphically, the Sal section is subdivided into six third order cycles which are biochronologically well integrated into the global Triassic cycle chart. The mixed siliciclastic-calcareous upper member of the Sal Formation typically shows highstand related carbonate shedding. It is, therefore, an important test case for sequence-stratigraphic controlled carbonate export to mixed basin fills. The well developed sequence stratigraphic cycles are mirrored in the isotope patterns. Additionally, the carbon and oxygen isotope data from the Sal Formation record the same chemostratigraphic marker at the Spathian/Anisian boundary known from other Tethyan sections.

Fiscal policy, foresight and the trade balance in the U.S.

This paper investigates the effects of fiscal policy on the trade balance using a structural factor model. A fiscal policy shock worsens the trade balance and produces an appreciation of the domestic currency but the effects are quantitatively small. The findings match the theoretical predictions of the standard Mundell-Fleming model, although fiscal policy should not be considered one of the main causes of the large US external deficit. My conclusions differ from those reached using VAR models since the fiscal shock, possibly due to fiscal foresight, is nonfundamental for the variables typically used in open economy VARs.