An analysis of US greenhouse gas cap-and-trade proposals using a forward-looking economic model

We develop a forward-looking version of the recursive dynamic MIT Emissions Prediction and Policy Analysis (EPPA) model, and apply it to examine the economic implications of proposals in the US Congress to limit greenhouse gas (GHG) emissions. We find that shocks in the consumption path are smoothed out in the forward-looking model and that the lifetime welfare cost of GHG policy is lower than in the recursive model, since the forward-looking model can fully optimize over time. The forward-looking model allows us to explore issues for which it is uniquely well suited, including revenue-recycling and early action crediting. We find capital tax recycling to be more welfare-cost reducing than labor tax recycling because of its long-term effect on economic growth. Also, there are substantial incentives for early action credits; however, when spread over the full horizon of the policy they do not have a substantial effect on lifetime welfare costs.

Language and trade: the (new) route of portuguese in the 21st century

Globalisation has eliminated frontiers and in the case of Europe helped the crossing of borders and changed forever the concept of social (and I would also say individual) geography: the rest of the world is out there; we can pretend not to see it, but we cannot avoid it. Moreover, Europe is undergoing a serious crisis, also economic, and new markets and business partners are welcome. In this context, cultural bonds like a common language can open new investment paths and give rise to successful stories. In this paper we intend to present an example of how low linguistic distance can lead to good business, even if a) in the internationalization process of the companies’ language is often forgotten as a management element and b) consumers of language products (like User Guides) are also not stimulating investment in language by the companies. Through the results of 2 studies carried out in 2010 and 2011 we will show how a pluricentric language like Portuguese is managed in multinational companies (MC) and Small and medium Enterprises (SMEs). The second study is based on an online survey questioning the effectiveness, efficiency and general quality of User Guides and the reaction of consumers to language. Results show that although playing a role in the internationalization process of companies in the same linguistic space, language is opportunistically used. On the other hand, Portuguese and Brazilian consumers show a very functional perception of the Portuguese language...

Density-dependent morphological plasticity and trade-offs among vegetative traits in Eichhornia crassipes (Pontederiaceae)

Density-dependent responses are an important component of the organism life-history, and the resource allocation theory is a central concept to the life-history theory. When resource allocation varies due to environmental changes, a plant may change its morphology or physiology to cope with the new conditions, a process known as phenotypic plasticity. Our study aimed to evaluate how plant density affects Eichhornia crassipes allocation patterns. A total of 214 individuals in high and low density were collected. The density effect was observed in all plant traits examined including biomass accumulation. All traits of E. crassipes demonstrated higher values in high density conditions, except for biomass of leaves. Density exhibited a high influence on vegetative traits of E. crassipes, but did not influence allocation pattern, since a trade-off among the vegetative traits was not found. The morphological plasticity and the absence of trade-offs were discussed as strategies to overcome neighbor plants in competition situations. In high density conditions, there were clear changes in the morphology of the plants which probably allows for their survival in a highly competitive environment.

Firm size and trade secret intensity: evidence from the Economic Espionage Act

This paper considers trade secrecy as an appropriation mechanism in the context ofb the US Economic Espionage Act (EEA) 1996. We examine the relation between trade secret intensity and firm size, using a cross section of 95 court cases. The paper builds on extant work in three respects. First, we create a unique body of evidence, using EEA prosecutions from 1996 to 2008. Second, we use an econometric approach to measurement, estimation and hypothesis testing. This allows us comprehensively to test the robustness of findings. Third, we focus on objectively measured valuations, instead of the subjective, self-reported values used elsewhere. We find a stable, robust value for the elasticity of trade secret intensity with respect to firm size, which indicates that a 10% reduction in firm size leads to a 7% increase in trade secret intensity. We find that this result is not sensitive to industrial sector, sample trimming, or functional form.

Native language, spoken language, translation and trade

We construct new series for common native language and common spoken language for 195 countries, which we use together with series for common official language and linguis-tic proximity in order to draw inferences about (1) the aggregate impact of all linguistic factors on bilateral trade, (2) whether the linguistic influences come from ethnicity and trust or ease of communication, and (3) in so far they come from ease of communication, to what extent trans-lation and interpreters play a role. The results show that the impact of linguistic factors, all together, is at least twice as great as the usual dummy variable for common language, resting on official language, would say. In addition, ease of communication is far more important than ethnicity and trust. Further, so far as ease of communication is at work, translation and inter-preters are extremely important. Finally, ethnicity and trust come into play largely because of immigrants and their influence is otherwise difficult to detect.

Native language, spoken language, translation and trade

We construct new series for common native language and common spoken language for 195 countries, which we use together with series for common official language and linguis-tic proximity in order to draw inferences about (1) the aggregate impact of all linguistic factors on bilateral trade, (2) whether the linguistic influences come from ethnicity and trust or ease of communication, and (3) in so far they come from ease of communication, to what extent trans-lation and interpreters play a role. The results show that the impact of linguistic factors, all together, is at least twice as great as the usual dummy variable for common language, resting on official language, would say. In addition, ease of communication is far more important than ethnicity and trust. Further, so far as ease of communication is at work, translation and inter-preters are extremely important. Finally, ethnicity and trust come into play largely because of immigrants and their influence is otherwise difficult to detect.

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.

Tariff Equivalent of Technical Barriers to Trade with Imperfect Substitution and Trade Costs, November 2005

The price-wedge method yields a tariff-equivalent estimate of technical barriers to trade (TBT). An extension of this method accounts for imperfect substitution between domestic and imported goods and incorporates recent findings on trade costs. We explore the sensitivity of this revamped TBT estimate to its key determinants (substitution elasticity, preference for home good, and trade cost). We use the augmented approach to investigate the ongoing US-Japan apple trade dispute and find that removing the Japanese TBT would yield limited export gains to the United States. We then draw policy implications of our findings.

Asymmetric information and trade policy

Economists understand protectionism as a costly mechanism to redistribute from the average citizen to special-interest groups; yet political platforms that deviate from free trade have surprising popular appeal. I present an explanation based on heterogeneous information across citizens whose voting decision has an intensive margin. For each politician and each sector, the optimal trade-policy choice caters to the preferences of those voters who are more likely to be informed of that proposal. An overall protectionist bias emerges because in every industry producers are better informed than consumers. This asymmetry emerges in equilibrium because co-workers share industry-specific knwoledge, and because producers have greater incentives to engage in costly learning about their sector. My model implies that more widespread information about trade policy for an industry is associated with lower protection. Cross-sectoral evidence on U.S. non-tariff barriers and newspaper coverage is consistent with this prediction.

Heterogeneous information and trade policy

Protectionism enjoys surprising popular support, in spite of deadweight losses. At thesame time, trade barriers appear to decline with public information about protection.This paper develops an electoral model with heterogeneously informed voters whichexplains both facts and predicts the pattern of trade policy across industries. In themodel, each agent endogenously acquires more information about his sector of employment. As a result, voters support protectionism, because they learn more about thetrade barriers that help them as producers than those that hurt them as consumers.In equilibrium, asymmetric information induces a universal protectionist bias. Thestructure of protection is Pareto inefficient, in contrast to existing models. The modelpredicts a Dracula effect: trade policy for a sector is less protectionist when there ismore public information about it. Using a measure of newspaper coverage across industries, I find that cross-sector evidence from the United States bears out my theoreticalpredictions.

Protectionist but globalised? Latin American custom duties and trade during the pre-1914 belle époque

While it is true that Latin American republics had no rival on maximising revenues from custom collection during the belle époque, this paper shows that Latin American countries were also generous importers, only behind the larger commercial countries of Western Europe in terms of imports per capita. Latin American citizens were much more linked to international trade than citizens of most regions of the world. Their relation to the world economy was tighter both via their imports and their exports relative to their population and income levels. This paper comes to show that there is no contradiction between the high custom collection by the Latin American republics and their high level of interaction with the global economy in the pre-1914 belle époque, although large country differences can be observed when descending from the regional to the national level.

Complementarity between human capital and trade in regional technological progress

The effect of openness and trade orientation on economic growth remains a highly contentious issue in the literature. Trade facilitates the spread of knowledge and the adoption of more advanced and efficient technologies, which hastens total factor productivity (TFP) growth and, hence, per capita income. New technologies that spread through trade require a sufficiently skilled labour force to adapt them to the domestic productive environment. Thus, openness and human capital accumulation will lead to TFP growth and the greater the complementarity between both variables, the higher the TFP growth. This paper discusses the implications of these assumptions and tests their empirical validity, using a pool of data for manufacturing industry in Spanish regions in a period in which both the stock of human capital and openness experienced a notable increase.