Relationship between trade openness and economic growth of India: A time series analysis

The paper aims to examine the empirical relationship between trade openness and economic growth of India for the time period 1970-2010. Trade openness is a multi-dimensional concept and hence measures of both trade barriers and trade volumes have been used as proxies for openness. The estimation results from Vector Autoregressive method suggest that growth in trade volumes accelerate economic growth in case of India. We do not find any evidence from our analysis that trade barriers lower growth.

Factor Proportions and the Growth of World Trade

Most of the expansion of global trade during the last three decades has been of the North-South kind - between capital-abundant developed and labour-abundant developing countries. Based on this observation, I argue that the recent growth of world trade is best understood from a factor-proportions perspective. I present novel evidence documenting that differences in capital-labour ratios across countries have increased in the wake of two shocks to the global economy: i) the opening up of China and ii) financial globalisation and the resulting upstream capital flows towards capital-abundant regions. I analyse their impact on specialisation and the volume of trade in a dynamic model which combines factor-proportions trade in goods with international trade in financial assets. Calibrating this model, I find that it can account for 60% of world trade growth between 1980 and 2007. It is also capable of predicting international investment patterns which are consistent with the data

The international trade as the sole engine of growth for an economy

Can international trade act as the sole engine of growth for an economy? If yes, what are the mechanisms through which trade operates in transmitting permanent growth? This paper answers these questions with two simple two-country models, in which only one country enjoys sustained growth in autarky. The models differ in the assumptions on technical change, which is either labour- or capital-augmenting. In both cases, the stagnant economy imports growth by trading. In the first model, growth is transmitted because of permanent increases in the trade volume. In the alternative framework, the stagnant economy imports sustained growth because its terms of trade permanently improve.

FDI, Trade Costs and Regional Asymmetries

We set up a trade model where three countries compete for an exogenous number of firms. Our innovation lies in the geography of the model. Of the three countries, one is the hub through which all trade takes place. First, we establish the natural geography of the region, which is given by the equilibrium distribution of industrial activity in the absence of taxes or subsidies. We then examine the implications for corporate taxes when the countries compete with each other to attract firms. We find that, even when all countries are the same size, the centrality of the hub gives it an advantage in tax setting, such that its equilibrium tax can be larger than that of the spokes and yet it still attracts a disproportionate share of industry. Thus geographic advantage in tax competition has a second dimension, centrality in addition to size.

Interlinkages and forecasting made possible by the use of the DECOIN analytical tool kit

This technical report is a document prepared as a deliverable [D4.3 Report of the Interlinkages and forecasting prototype tool] of a EU project – DECOIN Project No. 044428 - FP6-2005-SSP-5A. The text is divided into 4 sections: (1) this short introductory section explains the purpose of the report; (2) the second section provides a general discussion of a systemic problem found in existing quantitative analysis of sustainability. It addresses the epistemological implications of complexity, which entails the need of dealing with the existence of Multiple-Scales and non-equivalent narratives (multiple dimensions/attributes) to be used to define sustainability issues. There is an unavoidable tension between a “steady-state view” (= the perception of what is going on now – reflecting a PAST --& PRESENT view of the reality) versus an “evolutionary view” (= the unknown transformation that we have to expect in the process of becoming of the observed reality and in the observer – reflecting a PRESENT --& FUTURE view of the reality). The section ends by listing the implications of these points on the choice of integrated packages of sustainability indicators; (3) the third section illustrates the potentiality of the DECOIN toolkit for the study of sustainability trade-offs and linkages across indicators using quantitative examples taken from cases study of another EU project (SMILE). In particular, this section starts by addressing the existence of internal constraints to sustainability (economic versus social aspects). The narrative chosen for this discussion focuses on the dark side of ageing and immigration on the economic viability of social systems. Then the section continues by exploring external constraints to sustainability (economic development vs the environment). The narrative chosen for this discussion focuses on the dark side of current strategy of economic development based on externalization and the “bubbles-disease”; (4) the last section presents a critical appraisal of the quality of energy data found in energy statistics. It starts with a discussion of the general goal of statistical accounting. Then it introduces the concept of multipurpose grammars. The second part uses the experience made in the activities of the DECOIN project to answer the question: how useful are EUROSTAT energy statistics? The answer starts with an analysis of basic epistemological problems associated with accounting of energy. This discussion leads to the acknowledgment of an important epistemological problem: the unavoidable bifurcations in the mechanism of accounting needed to generate energy statistics. By using numerical example the text deals with the following issues: (i) the pitfalls of the actual system of accounting in energy statistics; (ii) a critical appraisal of the actual system of accounting in BP statistics; (iii) a critical appraisal of the actual system of accounting in Eurostat statistics. The section ends by proposing an innovative method to represent energy statistics which can result more useful for those willing develop sustainability indicators.

The response of the external finance premium in Asian corporate bond markets to financial characteristics, financial constraints and two financial crises

Empirical investigation of the external finance premium has been conducted on the margin between internal finance and bank borrowing or equities but little attention has been given to corporate bonds, especially for the emerging Asian market. In this paper, we hypothesize that balance sheet indicators of creditworthiness could affect the external finance premium for bonds as they do for premia in other markets. Using bond-specific and firm-specific data for China, Hong Kong, Indonesia, Korea, Philippines, Singapore and Thailand during 1995-2009 we find that firms with better financial health face lower external finance premia in all countries. When we introduce firm-level heterogeneity, we show that financial variables appear to be both statistically and quantitatively more important for financially constrained firms. Finally, when we examine the effects of the 1997-98 Asian crisis and the 2007-09 global financial crisis, we find that the sensitivity of the premium is greater for constrained firms during the Asian crisis compared to other times.

Policy initiatives and firms’ access to external finance: Evidence from a panel of emerging Asian economies

This paper analyses the impact of policy initiatives co-ordinated by Asian national governments on firms' access to external finance, using a unique firm-level database of eight Asian countries- Hong Kong SAR, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand over the period of 1996-2012. Using a difference-indifferences approach and controlling for firm-level and macroeconomic factors, the results show a significant impact of policy on firms' access to external finance. After splitting firms into constrained and unconstrained, using several criteria, the results document that unconstrained firms benefited significantly in obtaining external finance, compared to their constrained counterparts. Finally, we show that the increase in access to external finance after the policy initiative helped firms to raise their investment spending, especially for unconstrained firms.

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 'help' question doesn't help when screening for major depression : external validation of the three-question screening test for primary care patients managed for physical complaints

La dépression majeure est fréquente chez les patients qui consultent un cabinet de médecine générale. Elle reste toutefois difficile à diagnostiquer car elle est souvent masquée par une ou plusieurs plaintes physiques qui sont l'unique motif de consultation. Pour aider le médecin généraliste à démasquer ce trouble, un test de dépistage composé de deux questions a été développé et validé. Ce test indique une probabilité accrue de dépression si le patient répond positivement à au moins une des deux questions suivantes : « Est-ce que, durant le mois qui a précédé, vous vous êtes senti(e) triste, déprimé(e), désespéré(e) ? » et « Durant le mois qui a précédé, avez-vous ressenti un manque d'intérêt et de plaisir dans la plupart des activités que d'habitude vous appréciez ? ». Une troisième question, ajoutée aux deux questions ci-dessus, a été proposée récemment afin d'améliorer les performances de ce test de dépistage. Cette troisième question rend le test négatif si le patient répond négativement à la question suivante : « Souhaitez-vous de l'aide pour cela ? ». Une étude avait indiqué que l'ajout de la question supplémentaire améliorait la spécificité du test sans réduire sa sensibilité. Objectifs Il s'agissait de décrire la performance de deux tests de dépistage de la dépression majeure, composés, respectivement, de deux et de trois questions, dans une population de patients consultant dans un cabinet de médecine générale pour une plainte physique, et de les valider. Méthode Les réponses aux questions des tests de dépistage de la dépression dans la population de la cohorte SODA (Somatisation, Depression, Anxiety) ont été utilisées. Il s'agissait de patients de plus de 18 ans, sélectionnés aléatoirement, consultant pour au moins une plainte physique auprès de 24 médecins généralistes de Suisse Romande, réexaminés une année après l'inclusion dans la cohorte. Le questionnaire validé « Full Patient Health Questionnaire » a été utilisé, le même jour, pour diagnostiquer une dépression majeure. Ce résultat a été utilisé pour évaluer les performances des deux tests de dépistage en calculant la sensibilité et la spécificité, notamment. Résultats Les données de 724 / 937 patients inclus ont pu être utilisées. Un diagnostic de dépression majeure a été posé chez 9.5% des patients (n = 69). La sensibilité et la spécificité des deux questions de dépistage étaient de 91.3% (IC95% : 81.4-96.4%) et 65.0% (IC95% : 61.2-68.6%), respectivement. En ajoutant la troisième question, la sensibilité des deux questions de dépistage a diminué à 59.4% (IC95% : 47.0-70.9%) et la spécificité a augmenté à 88.2% (IC95% : 85.4-90.5%). Conclusions L'utilisation des deux questions pour le dépistage de la dépression majeure est associée à une haute sensibilité et à une basse spécificité chez des patients se présentant en cabinet de médecine générale pour une plainte physique. En ajoutant la troisième question, la spécificité augmente, mais la sensibilité diminue. Ainsi, en ajoutant la troisième question, quatre patients dépressifs majeurs sur dix ne sont pas détectés, alors que seulement un patient sur dix n'est pas détecté avec les deux questions de dépistage. Notre étude montre que le test composé de deux questions reste une méthode de choix pour le dépistage de la dépression majeure et que l'ajout de la troisième question n'est pas recommandée. Celle-ci reste toutefois pertinente dans l'incitation au dialogue sur le sujet de la dépression entre le médecin et son patient.

Perineal stapled prolapse resection for external rectal prolapse: is it worthwhile in the long-term?

BACKGROUND: Perineal stapled prolapse (PSP) resection is a novel operation for treating external rectal prolapse. However, no long-term results have been reported in the literature. This study analyses the long-term recurrence rate, functional outcome, and morbidity associated with PSP resection. METHODS: Nine consecutive patients undergoing PSP resection between 2007 and 2011 were prospectively followed. Surgery was performed by the same surgeons in a standardised technique. Recurrence rate, functional outcome, and complication grade were prospectively assessed. RESULTS: All 9 patients undergoing PSP resection were investigated. The median age was 72 years (range 25-88 years). No intraoperative complications occurred. Faecal incontinence, preoperatively present in 2 patients, worsened postoperatively in one patient (Vaizey 18-22). One patient developed new-onset faecal incontinence (Vaizey 18). The median obstructive defecation syndrome score decreased postoperatively significantly from 11 (median; range 8-13) to 5 (median; range 4-8) (p < 0.005). At a median follow-up of 40 months (range 14-58 months), the prolapse recurrence rate was 44 % (4/9 patients). CONCLUSIONS: The PSP resection is a fast and safe procedure associated with low morbidity. However, the poor long-term functional outcome and the recurrence rate of 44 % warrant a cautious patient selection.

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.

Mechanical external work and recovery at preferred walking speed in obese subjects

PURPOSE: The aim of this study was to compare the mechanical external work (per kg) and pendular energy transduction at preferred walking speed (PWS) in obese versus normal body mass subjects to investigate whether obese adults adopt energy conserving gait mechanics. METHODS: The mechanical external work (Wext) and the fraction of mechanical energy recovered by the pendular mechanism (Rstep) were computed using kinematic data acquired by an optoelectronic system and were compared in 30 obese (OG; body mass index [BMI] = 39.6 +/- 0.6 kg m(-2); 29.5 +/- 1.3 yr) and 19 normal body mass adults (NG; BMI = 21.4 +/- 0.5 kg m(-2); 31.2 +/- 1.2 yr) walking at PWS. RESULTS: PWS was significantly lower in OG (1.18 +/- 0.02 m s(-1)) than in NG (1.33 +/- 0.02 m s(-1); P <or= 0.001). There was no significant difference in Wext per unit mass between groups (OG: 0.36 +/- 0.03 J kg(-1) m(-1); NG: 0.31 +/- 0.02 J kg(-1) m(-1); P = 0.12). Rstep was significantly lower in OG (68.4% +/- 2.0%) compared with NG (74.4% +/- 1.0%; P = 0.01). In OG only, Wext per unit mass was positively correlated with PWS (r = 0.57; P < 0.001). CONCLUSION: Obese adults do not appear to alter their gait to improve pendular energy transduction and may select slower PWS to reduce mechanical and metabolic work.