How Much “Safety” Is Available under the U.S. Proposal to the WTO?, November 2005

Critics of the U.S. proposal to the World Trade Organization (WTO) made in October 2005 are correct when they argue that adoption of the proposal would significantly reduce available support under the current farm program structure. Using historical prices and yields from 1980 to 2004, we estimate that loan rates would have to drop by 9 percent and target prices would have to drop by 10 percent in order to meet the proposed aggregate Amber Box and Blue Box limits. While this finding should cheer those who think that reform of U.S. farm programs is long overdue, it alarms those who want to maintain a strong safety net for U.S. agriculture. The dilemma of needing to reform farm programs while maintaining a strong safety net could be resolved by redesigning programs so that they target revenue rather than price. Building on a base of 70 percent Green Box income insurance, a program that provides a crop-specific revenue guarantee equal to 98 percent of the product of the current effective target price and expected county yield would fit into the proposed aggregate Amber and Blue Box limits. Payments would be triggered whenever the product of the season-average price and county average yield fell below this 98 percent revenue guarantee. Adding the proposed crop-specific constraints lowers the coverage level to 95 percent. Moving from programs that target price to ones that target revenue would eliminate the rationale for ad hoc disaster payments. Program payments would automatically arrive whenever significant crop losses or economic losses caused by low prices occurred. Also, much of the need for the complicated mechanism (the Standard Reinsurance Agreement) that transfers most risk of the U.S. crop insurance to the federal government would be eliminated because the federal government would directly assume the risk through farm programs. Changing the focus of federal farm programs from price targeting to revenue targeting would not be easy. Farmers have long relied on price supports and the knowledge that crop losses are often adequately covered by heavily subsidized crop insurance or by ad hoc disaster payments. Farmers and their leaders would only be willing to support a change to revenue targeting if they see that the current system is untenable in an era of tight federal budgets and WTO limits.

What made him change? an individual and national analysis of men's participation in housework in 26 countries

We offer new evidence on multi-level determinants of the gender division of housework. Using data from the 2004 European Social Survey (ESS) for 26 European, we study the micro and macro-level factors which increase the likelihood of men doing an equal or greater share of housework than their female partners. A sample of 11,915 young men and women is analysed with a multi-level logistic regression in order to test at individual level the classic relative-income, time-availability and gender-role values, and a new couple conflict hypothesis. At individual level we find significant relationships between relative resources, values, couple's disagreement, and the division of housework which support more economic dependency than "doing gender" perspectives. At the macro-level, we find important composition effects and also support for gender empowerment, family model and social stratification explanations of cross-country differences.

Upgrading or polarization? occupational change in Britain, Germany, Spain and Switzerland, 1990-2008

This paper analyzes the pattern of occupational change in four Western European countries over the last two decades: what kind of jobs have been expanding -- high-paid jobs, low-paid jobs or both? By addressing this issue, we also examine what theoretical account is consistent with the observed pattern of change: skill-biased technical change, skill supply evolution or wage-setting institutions? Our empirical findings show a picture of massive occupational upgrading that closely matches educational expansion. In all four countries, by far the strongest employment growth occurred at the top of the occupational hierarchy, among managers and professionals. Yet in parallel, in Britain and Switzerland, as well as in Germany and Spain after 1996 and 2002 respectively, relative employment declined more strongly in the middling occupations (among clerks and production workers) than at the bottom (among interpersonal service workers). This slightly polarized pattern of occupational upgrading is consistent with the "routinization" hypothesis that technology is a better substitute for average-paid jobs in production and the office that for low-paid jobs in interpersonal services. However, we find large cross-country differences in the employment evolution at the bottom of the occupational hierarchy, among low-paid services workers: sizeable growth in Britain and Spain, but stagnation in Germany and Switzerland. This results points towards the possibility that wage-setting institutions filter the pattern of occupational change.

Change in physical activity after smoking cessation: the Coronary Artery Risk Development in Young Adults (CARDIA) study.

AIMS: To estimate physical activity trajectories for people who quit smoking, and compare them to what would have been expected had smoking continued. DESIGN, SETTING AND PARTICIPANTS: A total of 5115 participants in the Coronary Artery Risk Development in Young Adults Study (CARDIA) study, a population-based study of African American and European American people recruited at age 18-30 years in 1985/6 and followed over 25 years. MEASUREMENTS: Physical activity was self-reported during clinical examinations at baseline (1985/6) and at years 2, 5, 7, 10, 15, 20 and 25 (2010/11); smoking status was reported each year (at examinations or by telephone, and imputed where missing). We used mixed linear models to estimate trajectories of physical activity under varying smoking conditions, with adjustment for participant characteristics and secular trends. FINDINGS: We found significant interactions by race/sex (P = 0.02 for the interaction with cumulative years of smoking), hence we investigated the subgroups separately. Increasing years of smoking were associated with a decline in physical activity in black and white women and black men [e.g. coefficient for 10 years of smoking: -0.14; 95% confidence interval (CI) = -0.20 to -0.07, P < 0.001 for white women]. An increase in physical activity was associated with years since smoking cessation in white men (coefficient 0.06; 95% CI = 0 to 0.13, P = 0.05). The physical activity trajectory for people who quit diverged progressively towards higher physical activity from the expected trajectory had smoking continued. For example, physical activity was 34% higher (95% CI = 18 to 52%; P < 0.001) for white women 10 years after stopping compared with continuing smoking for those 10 years (P = 0.21 for race/sex differences). CONCLUSIONS: Smokers who quit have progressively higher levels of physical activity in the years after quitting compared with continuing smokers.

Movement, impacts and management of plant distributions in response to climate change: insights from invasions

A major challenge in this era of rapid climate change is to predict changes in species distributions and their impacts on ecosystems, and, if necessary, to recommend management strategies for maintenance of biodiversity or ecosystem services. Biological invasions, studied in most biomes of the world, can provide useful analogs for some of the ecological consequences of species distribution shifts in response to climate change. Invasions illustrate the adaptive and interactive responses that can occur when species are confronted with new environmental conditions. Invasion ecology complements climate change research and provides insights into the following questions: i) how will species distributions respond to climate change? ii) how will species movement affect recipient ecosystems? and iii) should we, and if so how can we, manage species and ecosystems in the face of climate change? Invasion ecology demonstrates that a trait-based approach can help to predict spread speeds and impacts on ecosystems, and has the potential to predict climate change impacts on species ranges and recipient ecosystems. However, there is a need to analyse traits in the context of life-history and demography, the stage in the colonisation process (e.g., spread, establishment or impact), the distribution of suitable habitats in the landscape, and the novel abiotic and biotic conditions under which those traits are expressed. As is the case with climate change, invasion ecology is embedded within complex societal goals. Both disciplines converge on similar questions of "when to intervene?" and "what to do?" which call for a better understanding of the ecological processes and social values associated with changing ecosystems.

Is it Time to Change Your Hat?, 2003

A one page informational sheet about skin cancer and the hat you wear. Sun Safety

On the goodness of fit of Kirk's formula for spread option prices

In this paper we investigate the goodness of fit of the Kirk's approximation formula for spread option prices in the correlated lognormal framework. Towards this end, we use the Malliavin calculus techniques to find an expression for the short-time implied volatility skew of options with random strikes. In particular, we obtain that this skew is very pronounced in the case of spread options with extremely high correlations, which cannot be reproduced by a constant volatility approximation as in the Kirk's formula. This fact agrees with the empirical evidence. Numerical examples are given.

Organizational Choice and Environmental Change

We explain the choice between franchising and vertical integration by estimating a model of relative performance in a sample of 250 Spanish car distributors, controlling for self-selection and including environmental factors. The method allows us to estimate performance counterfactuals. Organizational choice seemingly aims to contain moral hazard for both distributors and manufacturers but it is subject to start-up constraints and switching costs. While the market for franchises remained underdeveloped, information asymmetries led to the opening of integrated outlets. Their subsequent conversion into franchised outlets probably involved prohibitive transaction costs. Consequently, they performed worse than would have been expected had they been independent, as confirmed by the systematic improvement observed when they were in fact converted. The timing of such conversions suggests that switching costs were prohibitive until firms developed a substantial cushion of temporary contracts, previously forbidden by regulation.

Organisational Values as "Attractors of Chaos": An Emerging Cultural Change to Manage Organisational Complexity

Business organisations are excellent representations of what in physics and mathematics are designated "chaotic" systems. Because a culture of innovation will be vital for organisational survival in the 21st century, the present paper proposes that viewing organisations in terms of "complexity theory" may assist leaders in fine-tuning managerial philosophies that provide orderly management emphasizing stability within a culture of organised chaos, for it is on the "boundary of chaos" that the greatest creativity occurs. It is argued that 21st century companies, as chaotic social systems, will no longer be effectively managed by rigid objectives (MBO) nor by instructions (MBI). Their capacity for self-organisation will be derived essentially from how their members accept a shared set of values or principles for action (MBV). Complexity theory deals with systems that show complex structures in time or space, often hiding simple deterministic rules. This theory holds that once these rules are found, it is possible to make effective predictions and even to control the apparent complexity. The state of chaos that self-organises, thanks to the appearance of the "strange attractor", is the ideal basis for creativity and innovation in the company. In this self-organised state of chaos, members are not confined to narrow roles, and gradually develop their capacity for differentiation and relationships, growing continuously toward their maximum potential contribution to the efficiency of the organisation. In this way, values act as organisers or "attractors" of disorder, which in the theory of chaos are equations represented by unusually regular geometric configurations that predict the long-term behaviour of complex systems. In business organisations (as in all kinds of social systems) the starting principles end up as the final principles in the long term. An attractor is a model representation of the behavioral results of a system. The attractor is not a force of attraction or a goal-oriented presence in the system; it simply depicts where the system is headed based on its rules of motion. Thus, in a culture that cultivates or shares values of autonomy, responsibility, independence, innovation, creativity, and proaction, the risk of short-term chaos is mitigated by an overall long-term sense of direction. A more suitable approach to manage the internal and external complexities that organisations are currently confronting is to alter their dominant culture under the principles of MBV.

The varieties of regional change

Many metropolitan areas have experienced extreme boom-bust cycles over the past century. Some places, like Detroit, grew enormously as industrial powerhouses and then declined, while other older cities, like Boston, seem quite resilient. Education does a reasonable job of explaining urban resilience. In this paper, we present a simple model where education increases the level of entrepreneurship. In this model, human capital spillovers occur at the city level because skilled workers produce more product varieties and thereby increase labor demand. We decompose empirically the causes of the connection between skills and urban success and find that skills are associated with growth in productivity or entrepreneurship, not with growth in quality of life, at least outside of the West. We also find that skills seem to have depressed housing supply growth in the West, but not in other regions, which supports the view that educated residents in that region have fought for tougher land-use controls. We also present evidence that skills have had a disproportionately large impact on unemployment during the current recession.

Firm-Specific Investment, Sticky Prices, and the Taylor Principle

According to the Taylor principle a central bank should adjust the nominal interest rate by more than one-for-one in response to changes in current inflation. Most of the existing literature supports the view that by following this simple recommendation a central bank can avoid being a source of unnecessary fluctuations in economic activity. The present paper shows that this conclusion is not robust with respect to the modelling of capital accumulation. We use our insights to discuss the desirability of alternative interest rate rules. Our results suggest a reinterpretation of monetary policy under Volcker and Greenspan: The empirically plausible characterization of monetary policy can explain the stabilization of macroeconomic outcomes observed in the early eighties for the US economy. The Taylor principle in itself cannot.

The emergence of biofuels and the co-movement between crude oil and agricultural prices

Biofuels are becoming an alternative to non-renewable energy sources but we know little about the economic mechanisms influencing their prices. This paper studies the interrelationships between the spot prices of oil and those of agricultural commodities used as biofuel feedstocks. Using daily data since 1988, we identify a co-movement after 2005 that does not appear for other food-related commodities and is not due to general economic variables. We also find traces of the co-movement in the prices of a large biofuel stock. The results amount to the first systematic piece of empirical evidence linking spot oil and agricultural markets via the emergence of biofuels.

Cyclical Skill-Biased Technological Change

Over the past two decades, technological progress has been biased towards making skilled labor more productive. The evidence for this finding is based on the persistent parallel increase in the skill premium and the supply of skilled workers. What are the implications of skill-biased technological change for the business cycle? To answer this question, we use the CPS outgoing rotation groups to construct quarterly series for the price and quantity of skill. The unconditional correlation of the skill premium with the cycle is zero. However, using a structural VAR with long run restrictions, we find that technology shocks substantially increase the premium. Investment-specific technology shocks are not skill-biased and our findings suggest that capital and skill are (mildly) substitutable in aggregate production.

Rules of origin : from analysis to reform

General Introduction This thesis can be divided into two main parts :the first one, corresponding to the first three chapters, studies Rules of Origin (RoOs) in Preferential Trade Agreements (PTAs); the second part -the fourth chapter- is concerned with Anti-Dumping (AD) measures. Despite wide-ranging preferential access granted to developing countries by industrial ones under North-South Trade Agreements -whether reciprocal, like the Europe Agreements (EAs) or NAFTA, or not, such as the GSP, AGOA, or EBA-, it has been claimed that the benefits from improved market access keep falling short of the full potential benefits. RoOs are largely regarded as a primary cause of the under-utilization of improved market access of PTAs. RoOs are the rules that determine the eligibility of goods to preferential treatment. Their economic justification is to prevent trade deflection, i.e. to prevent non-preferred exporters from using the tariff preferences. However, they are complex, cost raising and cumbersome, and can be manipulated by organised special interest groups. As a result, RoOs can restrain trade beyond what it is needed to prevent trade deflection and hence restrict market access in a statistically significant and quantitatively large proportion. Part l In order to further our understanding of the effects of RoOs in PTAs, the first chapter, written with Pr. Olivier Cadot, Celine Carrère and Pr. Jaime de Melo, describes and evaluates the RoOs governing EU and US PTAs. It draws on utilization-rate data for Mexican exports to the US in 2001 and on similar data for ACP exports to the EU in 2002. The paper makes two contributions. First, we construct an R-index of restrictiveness of RoOs along the lines first proposed by Estevadeordal (2000) for NAFTA, modifying it and extending it for the EU's single-list (SL). This synthetic R-index is then used to compare Roos under NAFTA and PANEURO. The two main findings of the chapter are as follows. First, it shows, in the case of PANEURO, that the R-index is useful to summarize how countries are differently affected by the same set of RoOs because of their different export baskets to the EU. Second, it is shown that the Rindex is a relatively reliable statistic in the sense that, subject to caveats, after controlling for the extent of tariff preference at the tariff-line level, it accounts for differences in utilization rates at the tariff line level. Finally, together with utilization rates, the index can be used to estimate total compliance costs of RoOs. The second chapter proposes a reform of preferential Roos with the aim of making them more transparent and less discriminatory. Such a reform would make preferential blocs more "cross-compatible" and would therefore facilitate cumulation. It would also contribute to move regionalism toward more openness and hence to make it more compatible with the multilateral trading system. It focuses on NAFTA, one of the most restrictive FTAs (see Estevadeordal and Suominen 2006), and proposes a way forward that is close in spirit to what the EU Commission is considering for the PANEURO system. In a nutshell, the idea is to replace the current array of RoOs by a single instrument- Maximum Foreign Content (MFC). An MFC is a conceptually clear and transparent instrument, like a tariff. Therefore changing all instruments into an MFC would bring improved transparency pretty much like the "tariffication" of NTBs. The methodology for this exercise is as follows: In step 1, I estimate the relationship between utilization rates, tariff preferences and RoOs. In step 2, I retrieve the estimates and invert the relationship to get a simulated MFC that gives, line by line, the same utilization rate as the old array of Roos. In step 3, I calculate the trade-weighted average of the simulated MFC across all lines to get an overall equivalent of the current system and explore the possibility of setting this unique instrument at a uniform rate across lines. This would have two advantages. First, like a uniform tariff, a uniform MFC would make it difficult for lobbies to manipulate the instrument at the margin. This argument is standard in the political-economy literature and has been used time and again in support of reductions in the variance of tariffs (together with standard welfare considerations). Second, uniformity across lines is the only way to eliminate the indirect source of discrimination alluded to earlier. Only if two countries face uniform RoOs and tariff preference will they face uniform incentives irrespective of their initial export structure. The result of this exercise is striking: the average simulated MFC is 25% of good value, a very low (i.e. restrictive) level, confirming Estevadeordal and Suominen's critical assessment of NAFTA's RoOs. Adopting a uniform MFC would imply a relaxation from the benchmark level for sectors like chemicals or textiles & apparel, and a stiffening for wood products, papers and base metals. Overall, however, the changes are not drastic, suggesting perhaps only moderate resistance to change from special interests. The third chapter of the thesis considers whether Europe Agreements of the EU, with the current sets of RoOs, could be the potential model for future EU-centered PTAs. First, I have studied and coded at the six-digit level of the Harmonised System (HS) .both the old RoOs -used before 1997- and the "Single list" Roos -used since 1997. Second, using a Constant Elasticity Transformation function where CEEC exporters smoothly mix sales between the EU and the rest of the world by comparing producer prices on each market, I have estimated the trade effects of the EU RoOs. The estimates suggest that much of the market access conferred by the EAs -outside sensitive sectors- was undone by the cost-raising effects of RoOs. The chapter also contains an analysis of the evolution of the CEECs' trade with the EU from post-communism to accession. Part II The last chapter of the thesis is concerned with anti-dumping, another trade-policy instrument having the effect of reducing market access. In 1995, the Uruguay Round introduced in the Anti-Dumping Agreement (ADA) a mandatory "sunset-review" clause (Article 11.3 ADA) under which anti-dumping measures should be reviewed no later than five years from their imposition and terminated unless there was a serious risk of resumption of injurious dumping. The last chapter, written with Pr. Olivier Cadot and Pr. Jaime de Melo, uses a new database on Anti-Dumping (AD) measures worldwide to assess whether the sunset-review agreement had any effect. The question we address is whether the WTO Agreement succeeded in imposing the discipline of a five-year cycle on AD measures and, ultimately, in curbing their length. Two methods are used; count data analysis and survival analysis. First, using Poisson and Negative Binomial regressions, the count of AD measures' revocations is regressed on (inter alia) the count of "initiations" lagged five years. The analysis yields a coefficient on measures' initiations lagged five years that is larger and more precisely estimated after the agreement than before, suggesting some effect. However the coefficient estimate is nowhere near the value that would give a one-for-one relationship between initiations and revocations after five years. We also find that (i) if the agreement affected EU AD practices, the effect went the wrong way, the five-year cycle being quantitatively weaker after the agreement than before; (ii) the agreement had no visible effect on the United States except for aone-time peak in 2000, suggesting a mopping-up of old cases. Second, the survival analysis of AD measures around the world suggests a shortening of their expected lifetime after the agreement, and this shortening effect (a downward shift in the survival function postagreement) was larger and more significant for measures targeted at WTO members than for those targeted at non-members (for which WTO disciplines do not bind), suggesting that compliance was de jure. A difference-in-differences Cox regression confirms this diagnosis: controlling for the countries imposing the measures, for the investigated countries and for the products' sector, we find a larger increase in the hazard rate of AD measures covered by the Agreement than for other measures.