|
on Central and Western Asia |
| By: | Marco Bettiol; Eleonora Di Maria; Roberto Grandinetti |
| Abstract: | Studies on service management have broadly discussed the relationship between customization and standardization in services. Studies on modularity have enriched the debate by identifying an additional form of service provision able to couple the advantages of these two alternative approaches. However, at the theoretical and empirical level little attention has been given to explore how service firms adopt standardization and modularity on the one hand, and whether they are able to combine different types of services in their offering, on the other hand. This question is particularly interesting in the domain of Knowledge-Intensive Business Services (KIBS). Literature on KIBS has stressed the high level of service customization KIBS can offer to their business customers, within a collaborative and interactive framework for innovation. However, scholars dedicated little attention on how KIBS develop their service offering and whether the customization is the only strategy they adopt. The aim of the paper is to explore the business service portfolio of KIBS to identify business service management strategies KIBS develop between bespoke services and standardization. Empirical analysis on about 500 Italian KIBS specializing in design and communication, ICT services and professional services show that there are KIBS providing fully standardized services and also the rise of combinatory KIBS able to mix bespoke and standard services with business characteristics similar to the other KIBS profiles. |
| Keywords: | KIBS; service standardization; customization; modularity; combinatory resources |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:13-08&r=cwa |
| By: | Bent Flyvbjerg |
| Abstract: | The article first describes characteristics of major infrastructure projects. Second, it documents a much neglected topic in economics: that ex ante estimates of costs and benefits are often very different from actual ex post costs and benefits. For large infrastructure projects the consequence is cost overruns, benefit shortfalls, and the systematic underestimation of risks. Third, implications for cost-benefit analysis are described, including that such analysis is not to be trusted for major infrastructure projects. Fourth, the article uncovers the causes of this state of affairs in terms of perverse incentives that encourage promoters to underestimate costs and overestimate benefits in the business cases for their projects. But the projects that are made to look best on paper are the projects that amass the highest cost overruns and benefit shortfalls in reality. The article depicts this situation as "survival of the un-fittest." Fifth, the article sets out to explain how the problem may be solved, with a view to arriving at more efficient and more democratic projects, and avoiding the scandals that often accompany major infrastructure investments. Finally, the article identifies current trends in major infrastructure development. It is argued that a rapid increase in stimulus spending combined with more investments in emerging economies combined with more spending on information technology is catapulting infrastructure investment from the frying pan into the fire. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1303.6571&r=cwa |
| By: | William Passero (U.S. Bureau of Labor Statistics); Thesia I. Garner (U.S. Bureau of Labor Statistics); Clinton McCully (Bureau of Economic Analysis) |
| Abstract: | For the United States, there are currently two federal series of data that refer to household expenditures. One is produced by the Bureau of Labor Statistics, using the Consumer Expenditure Survey (CE), and the other is produced by the Bureau of Economic Analysis, personal consumption expenditures (PCE). Weights for the Consumer Price Index (CPI) are based on CE data. However, over the years, suggestions have been made to use PCE rather than the CE as the source of weights for the CPI. Much research had been conducted to reconcile differences in scope and definitions in the CE and PCE. Included in this paper is a review of these differences along with aggregate estimates that result when one accounts for the differences. Such an exercise is important; however, to compare trends in CE and PCE over time, a concordance of comparable items in both the CE and PCE is desirable. Independently, the BLS divisions responsible for the CE and CPI have produced concordances of the CE to PCE data; staff members at BEA have also produced their own concordances. These three independent exercises have resulted in three different concordances. In this paper, a new joint concordance, developed by staff in the BEA and BLS, is presented. Using this concordance, similarities and differences in the CE and PCE are highlighted along with trends in ratios of aggregate CE and PCE over the 1992 to 2010 time period. Aggregate expenditures and ratios of CE to PCE are produced for durables, non-durables, and services Results suggest that non-durables are most alike for the CE and PCE with about 93 percent of total non-durable expenditures identified as comparable within the CE and within the PCE. Regarding trends over time and focusing on comparable goods and services only, CE to PCE ratios have steadily decreased. For total comparable goods and services, CE to PCE ratios decreased from 84 percent for 1992 to 74 percent for 2010. The greatest decline in CE to PCE ratios is for durables, with a decrease of 24 percentage points. Ratios for comparable services dropped the least, with a percentage decrease of 10 percentage points. |
| Keywords: | Macro-micro data comparison |
| JEL: | D12 E01 Y10 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:bls:wpaper:ec130020&r=cwa |
| By: | Huanxiu GUO; Mary-Françoise RENARD |
| Abstract: | Since 2003, a grass-roots movement of New Rural Reconstruction (NRR) has emerged in China to experience alternative model of rural development. The movement adopts a particular approach for rural development on basis of rural social and cultural reconstruction. In order to understand this social approach, we investigate an original NRR experiment in a poor village of south China, where organic farming is promoted by means of basketball game. An in-depth household survey is conducted to qualitatively analyze this social approach and derive intuitive hypothesis of extended social network for empirical test. With a panel structure dataset collected by the survey, we quantitatively identify the causal effect of social network by exploiting the endogeneity of social network formation. Our identification result provides micro evidence for a large social multiplier effect in the diffusion of organic farming, whereas it is negative for organic experts. Also, our results highlight the role of women, education and labor force for the development of organic farming. On basis of these results, we conclude that organic farming is suitable but challenging for small villages in China, while social activity is a good lever to achieve farmers' collective action for its large diffusion. |
| Keywords: | New rural reconstruction; Social network; Organic farming; China. D71, O33, Q55 |
| JEL: | Q55 O33 D71 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1423&r=cwa |
| By: | Fariha Kamal; Mary E. Lovely |
| Abstract: | China’s WTO accession offers a rare opportunity to observe multinationals’ response to changes in property rights in a developing country. WTO accession reduced incentives for joint ventures while reducing constraints on wholly owned foreign subsidiaries. Concomitant with these changes was a more liberal investment environment for indigenous investors. An adaptation of Feenstra and Hanson’s (2005) property rights model suggests that higher the productivity and value added of the joint venture, but the lower its domestic sales share, the more likely the venture is to be become wholly foreign owned following liberalization. Theory also suggests that an enterprise with lower productivity but higher value added and domestic sales will be more likely to switch from a joint venture to wholly domestic owned. Using newly created enterprise-level panel data on equity joint ventures and changes in registration type following China’s WTO accession, we find evidence consistent with the property rights theory. More highly productive firms with higher value added and lower domestic sales shares are more likely to become wholly foreign owned, while less productive firms focused on the Chinese market are more likely to become wholly domestic owned rather than remain joint ventures. In addition to highlighting the importance of incomplete contracts and property rights in the international organization of production, these results support the view that external commitment to liberalization through WTO accession influences multinational and indigenous firms’ behavior. |
| Keywords: | property rights; incomplete contracts; ownership; WTO; China |
| JEL: | F23 L1 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:13-05&r=cwa |
| By: | Isabel Tecu |
| Abstract: | What explains the location of industrial innovation? Economists have traditionally attempted to answer this question by studying firm-external knowledge spillovers. This paper shows that firm-internal linkages between production and R&D play an equally important role. I estimate an R&D location choice model that predicts patents by a firm in a location from R&D productivity and costs. Focusing on large R&D-performing firms in the chemical industry, an average-sized plant raises the firm’s R&D productivity in the metropolitan area by about 2.5 times. The elasticity of R&D productivity with respect to the firm’s production workers is almost as large as the elasticity with respect to total patents in the MSA, while proximity to academic R&D has no significant effect on R&D productivity in this sample. Other manufacturing industries exhibit similar results. My results cast doubt on the frequently-held view that a country can divest itself of manufacturing and specialize in innovation alone. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:13-09&r=cwa |
| By: | Ali Coskun Tunçer (London School of Economics, Department of Economic History) |
| Abstract: | This study analyses the functioning of the “gold standard” in the Ottoman Empire during the pre-1914 gold standard era, with specific emphasis on the institutions regulating commodity money and fiat money. It explores the extent to which the Ottoman monetary system was an outlier with reference to the experiences of other peripheral countries. One of the findings reveals considerably limited circulation of notes in the Ottoman Empire even after adherence to the gold standard in 1880. By highlighting the anomalies of the Ottoman case, this paper concludes that the transition from commodity money to fiat money did not take place at the same rate across peripheries during the pre-1914 gold standard era. These differences may be explained by the relative autonomy of the central banks of issue from governments, and in turn may have implied changing degrees of monetary sovereignty and fiscal capacity across the members of the golden periphery. |
| Keywords: | gold standard, monetary sovereignty, Ottoman Empire, fiat money |
| JEL: | N13 N23 N43 |
| Date: | 2013–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:cmh:wpaper:08&r=cwa |
| By: | Gerardo Marletto |
| Abstract: | A socio-technical approach is used to show that the future of urban mobility will depend on the competition between coalitions of innovative actors who support alternative transport systems. The current positioning of these coalitions is mapped with reference to innovation and power. The supporting coalition of the ‘individual car’ system benefits from a dominant position on current alternatives, but faces external pressures for change. Three transition pathways to 2030 are considered - 1) ‘AUTO-city’, i.e. the reconfiguration of the ‘individual car’ supporting coalition through the stable integration of producers of batteries; 2) ‘ECO-city’, i.e. the empowering of local coalitions which integrate all non-car modes, and their diffusion from pioneering to laggard cities; 3) ‘ELECTRI-city’, i.e. the empowering of a new coalition centered on electric operators which establish a new ‘electric vehicles + smart grids’ system. The deployment of one or another transition pathway also depends on the ability of supporting coalitions to influence political institutions. Without a political action for the weakening of the dominant position of the ‘individual car’ system, the ‘AUTO-city’ transition pathway will prevail. To support the ‘ECO-city’ and the ‘ELECTRI-city’ transition pathways, a multilevel transport policy or a national/federal industrial policy is needed, respectively. |
| Keywords: | Urban mobility; socio-technical analysis; socio-technical transition; innovative actor; supporting coalition |
| JEL: | R40 L14 O18 Q55 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201306&r=cwa |
| By: | Joao De Mello; Daniel Mejía; Lucía Suárez |
| Abstract: | Our goal in this paper is twofold: First, evaluate the impact on crime of the restriction of late-night alcohol sales in Bogotá; and second, quantify the causal effect of problematic alcohol consumption on different crime categories. Using a control group strategy, we explore time-series and cross-block variation in the restriction to measure its causal effects on several crime categories. We find that the restriction reduced deaths and injuries in car accidents and batteries, compatible with the pharmacological impact of alcohol consumption on crime (Goldstein, 1985). Our results are stronger in areas where the restriction was actually binding (e.g., in blocks with presence of liquor stores) and are highly heterogeneous depending on the number of liquor stores that were restricted at the block level. Finally, we measure the impact of the restriction on alcohol consumption (the first-stage, or mechanism), and quantify the causal pharmacological impact of alcohol consumption on crime using the restriction as an instrument for problematic alcohol consumption (the second stage). We find that alcohol consumption causes deaths and injuries in car accidents and batteries. More precisely, our results indicate that a one standard deviation (s.d.) increase in problematic alcohol consumption increases deaths in car accidents by 0.51 s.d., injuries in car accidents by 0.82 s.d., and batteries by 1.27 s.d. |
| Date: | 2013–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:010629&r=cwa |
| By: | Carolina Marín Cadavid; John J. García |
| Abstract: | An internationalization model is proposed for a Colombian company specialized in design and consulting engineering services related to the energy sector. The study of these services is relatively new in internationalization and competitiveness, therefore of great interest for research purposes. The model is created with the purpose of conquering the Northern Triangle market (Guatemala, Honduras, El Salvador). Different internationalization theories, such as the Eclectic Paradigm, the Uppsala Model and the Five Competitive Forces were considered. Different assessments were carried out based on qualitative and quantitative data through the case study method in which analyses were performed to generate and evaluate the main variables in the model. Outcomes assure that, HMV Ingenieros Ltda (a Colombian company) is prepared to start commercial presence in the Northern Triangle considering the Step-by-Step model as the way to reach the studied market. In addition, analysis of macroeconomic trends finds Guatemala as the best potential market. |
| Date: | 2013–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:col:000122:010635&r=cwa |
| By: | Raj Chetty; John N. Friedman; Soren Leth-Petersen; Torben Heien Nielsen; Tore Olsen |
| Abstract: | The federal government provides generous tax subsidies for retirement saving in 401(k)s and IRAs. The subsidies are designed to increase household saving and retirement income security, important national goals. The estimated cost, however, exceeds $100 billion a year in lost revenue to the Treasury. Given the nation’s severe budgetary pressures, it is critical to know how effective these subsidies are in raising household saving and whether other approaches would be more cost-effective. The ability to answer these questions has been limited by inadequate U.S. data on household saving. In particular, it is hard to know whether tax subsidies encourage families to save more, or simply shift money they would otherwise save into tax-advantaged retirement accounts. The same is true for “automatic” saving, such as defaults in 401(k) plans, which increase retirement saving if individuals take no action. While defaults have been shown to increase retirement saving, is this increase offset by reduced saving in taxable accounts or an increase in debt, leav-ing total household saving unchanged? This brief, based on a recent study, uses high-quality Danish data to address these questions. It assesses the effect of tax subsidies and automatic contributions on retirement saving and total household saving. The Danish retirement system and patterns of retirement saving are similar to those in the United States. The effect of retirement saving policies on total household saving should be similar as well, making the findings relevant to current U.S. policy discussions. This brief proceeds as follows. The first section introduces the problem of evaluating policies designed to increase retirement saving. The second section describes the data and basic methodology used in the analysis. The third section presents findings on the effect of tax subsidies on retirement saving. The fourth section presents findings on the effect of automatic saving. The fifth section offers an explanation of these findings based on how these policies affect two types of individuals – “active” and “passive” savers. The final section concludes that an expansion of automatic saving could produce much larger increases in household saving, at lower fiscal cost, than current tax subsidies for retirement saving. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2013-3&r=cwa |
| By: | Oliver Bunn (Dept. of Economics, Yale University); Caterina Calsamiglia; Donald J. Brown (Dept. of Economics, Yale University) |
| Abstract: | We conduct two experiments where subjects make a sequence of binary choices between risky and ambiguous binary lotteries. Risky lotteries are defined as lotteries where the relative frequencies of outcomes are known. Ambiguous lotteries are lotteries where the relative frequencies of outcomes are not known or may not exist. The trials in each experiment are divided into three phases: pre-treatment, treatment and post-treatment. The trials in the pre-treatment and post-treatment phases are the same. As such, the trials before and after the treatment phase are dependent, clustered matched-pairs, that we analyze with the alternating logistic regression (ALR) package in SAS. In both experiments, we reveal to each subject the outcomes of her actual and counterfactual choices in the treatment phase. The treatments differ in the complexity of the random process used to generate the relative frequencies of the payoffs of the ambiguous lotteries. In the first experiment, the probabilities can be inferred from the converging sample averages of the observed actual and counterfactual outcomes of the ambiguous lotteries. In the second experiment the sample averages do not converge. If we define fictive learning in an experiment as statistically significant changes in the responses of subjects before and after the treatment phase of an experiment, then we expect fictive learning in the first experiment, but no fictive learning in the second experiment. The surprising finding in this paper is the presence of fictive learning in the second experiment. We attribute this counterintuitive result to apophenia: "seeing meaningful patterns in meaningless or random data." A refinement of this result is the inference from a subsequent Chi-squared test, that the effects of fictive learning in the first experiment are significantly different from the effects of fictive learning in the second experiment. |
| Keywords: | Uncertainty, Counterfactual outcomes, Apophenia |
| JEL: | C23 C35 C91 D03 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1890&r=cwa |
| By: | Akihiko Kato (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | In Japan, many scholars and policymakers as well as ordinary people, have accepted the family nuclearization theory—that is, that the Japanese family system has changed from a traditional stem family into the modern nuclear or conjugal family in the latter half of the twentieth century. Although the number of nuclear family households doubled during the period of high economic growth (1955-1974), this can be brought about under the stem family principle by a marriage boom among non-heir sons and daughters born in the 1930s and the 1940s, who have many siblings due to the demographic transition. This paper examines continuity, change, and regionality in the Japanese family over the twentieth century, using retrospective longitudinal data from nationally representative survey implemented in 2002. The proportion of couples co-residing with the husband’s parent(s) or with the wife’s parent(s) at the time of marriage decreased from about 35% for those born in the 1930s to 20% for those born in the 1960s. However, the latter cohort started living with their parent(s) soon after marriage, and then over 30% of them co-reside 10–15 years after marriage, showing a delayed co-residence tendency. The results from a discrete-time logistic regression analysis reveal that the spread of conjugal family ideology, industrialization, and urbanization are the primary causes of the decrease in intergenerational co-residence at marriage. However, these effects start to weaken immediately after marriage and then fade out sooner or later, inconsistent with the nuclearization theory. By contrast, the intergenerational transfer of family property, especially house and/or land, and intergenerational reciprocity have powerful impacts from the time of marriage onward, never weakening with the passing of time. These features are clearer among younger cohorts than among their parental cohorts, suggesting intrinsic forces that form stem families continue to work in depth. Moreover, there is the persistence of the stem family in terms of regionality over the twentieth century, concluding that the Japanese family is still based on the stem family system. The evidence presented in this paper could provide several insights into the family systems of other strong family countries. |
| Keywords: | Japan |
| JEL: | J1 Z0 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2013-004&r=cwa |
| By: | Anne Neumann; Maria Nieswand; Torben Schubert |
| Abstract: | Nonparametric efficiency analysis has become a widely applied technique to support industrial benchmarking as well as a variety of incentive- based regulation policies. In practice such exercises are often plagued by incomplete knowledge about the correct specifications of inputs and outputs. Simar and Wilson (2001) and Schubert and Simar (2011) propose restriction tests to support such specification decisions for cross-section data. However, the typical oligopolized market structure pertinent to regulation contexts often leads to low numbers of cross-section observations, rendering reliable estimation based on these tests practically unfeasible. This small-sample problem could often be avoided with the use of panel data, which would in any case require an extension of the cross-section restriction tests to handle panel data. In this paper we derive these tests. We prove the consistency of the proposed method and apply it to a sample of US natural gas transmission companies in 2003 through 2007. We find that the total quantity of gas delivered and gas delivered in peak periods measure essentially the same output. Therefore only one needs to be included. We also show that the length of mains as a measure of transportation service is non-redundant and therefore must be included. |
| Keywords: | Benchmarking models, network industries, nonparametric efficiency estimation, data envelopment analysis, testing restrictions, subsampling, Bootstrap |
| JEL: | C14 L51 L95 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1283&r=cwa |
| By: | Tilman Brück; Damir Esenaliev |
| Abstract: | We investigate long-term trends in the intergenerational transmission of education in a low income country undergoing a transition from socialism to a market economy. We draw on evidence from Kyrgyzstan using data from three household surveys collected in 1993, 1998 and 2011. We find that Kyrgyzstan, like Eastern European middle income transition economies, generally maintained high educational mobility, comparable to the levels during Soviet times. However, we find that the younger cohorts, who were exposed to the transition during their school years, experienced a rapid decline in educational mobility. We also document that gender differences in schooling and educational mobility, found among older-aged individuals, disappeared in the younger population. |
| Keywords: | intergenerational mobility, educational attainment, gender, transition economy, Kyrgyzstan, Central Asia |
| JEL: | J62 P36 I25 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1284&r=cwa |
| By: | A. Craig Burnside; Jeremy J. Graveline |
| Abstract: | Recent research in international finance has equated changes in real exchange rates with differences between the marginal utility growths of representative agents in different economies. The asset market view of exchange rates, encapsulated in this equation, has been used to gain insights into exchange rate determination, foreign exchange risk premia, and international risk sharing. We argue that, in fact, this equation is of limited usefulness. By itself, the asset market view does not identify the economic mechanism that determines the exchange rate. It only holds under complete markets, and even then, it does not generally allow us to identify the marginal utility growths of distinct agents. Moreover, if we allow for incomplete asset markets, measures of agents' marginal utility growths, and international risk sharing, cannot be based on asset market and exchange rate data alone. Instead, we argue that in order to explain how exchange rates are determined, it is necessary to make specific assumptions about preferences, goods market frictions, the assets agents can trade, and the nature of endowments or production. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:duk:dukeec:13-1&r=cwa |
| By: | Carolina Castaldi; Koen Frenken; Bart Los |
| Abstract: | We investigate how variety affects the innovation output of a region. Borrowing arguments from theories of recombinant innovation, we expect that related variety will enhance innovation as related technologies are more easily recombined into a new technology. However, we also expect that unrelated variety enhances technological breakthroughs, since radical innovation often stems from connecting previously unrelated technologies opening up whole new functionalities and applications. Using patent data for US states in the period 1977-1999 and associated citation data, we find evidence for both hypotheses. Our study thus sheds a new and critical light on the related-variety hypothesis in economic geography. |
| Keywords: | recombinant innovation, regional innovation, superstar patents, technological variety, evolutionary economic geography |
| JEL: | O31 R11 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1302&r=cwa |
| By: | Alessandra Colombelli; Francesco Quatraro |
| Abstract: | This paper investigates the relationship between the creation of new firms and the properties of the local knowledge bases, like coherence, cognitive distance and variety. By combining the literature on the knowledge spillovers of entrepreneurship and that on the recombinant knowledge approach, we posit that locally available knowledge matters to the entrepreneurial process, but the type of knowledge underlying theses dynamics deserve to be analyzed. The analysis is carried out on 104 Italian NUTS 3 regions observed over the time span 1995-2011. The results confirm that local knowledge is important, and suggest that the creation of new firms in Italy is associated to the exploitation of well established technological trajectories grounded on competences accumulated over time, rather than to the commercialization of brand new knowledge. |
| Keywords: | Knowledge Coherence, Variety, Cognitive Distance, Italy, Knowledge-Spillovers Theory of Entrepreneurship, New Firms, Recombinant Knowledge |
| JEL: | L26 M13 R11 O33 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1303&r=cwa |
| By: | Riccardo Crescenzi; Carlo Pietrobelli & Roberta Rabellotti |
| Abstract: | "This paper investigates the geography of multinational corporations’ investments in the EU regions. The ‘traditional’ sources of location advantages (i.e. agglomeration economies, market access and labour market conditions) are considered together with innovation and socio-institutional drivers of investments, captured by means of regional social filter conditions. The introduction of a wider set of attraction factors makes is possible to empirically assess the different role played by such advantages in the location decision of investments at different stages of the value chain and disentangle the differential role of national vs. local and regional factors. The empirical analysis covers the EU-25 regions and suggests that regional-socio economic conditions are crucially important for an understanding of the location investment decisions in the most sophisticated knowledge-intensive stages of the value chain."</HEAD |
| Keywords: | regions |
| Date: | 2012–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:leqsxx:p0053&r=cwa |
| By: | Kathy Baylis; Don Fullerton; Daniel H. Karney |
| Abstract: | We extend the model of Fullerton, Karney, and Baylis (2012 working paper) to explore cost-effectiveness of unilateral climate policy in the presence of leakage. We ignore the welfare gain from reducing greenhouse gas emissions and focus on the welfare cost of the emissions tax or permit scheme. Whereas that prior paper solves for changes in emissions quantities and finds that leakage may be negative, we show here that all cases with negative leakage in that model are cases where a unilateral carbon tax results in a welfare loss. With positive leakage, however, a unilateral policy can improve welfare. |
| JEL: | Q27 Q28 Q56 Q58 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18898&r=cwa |