nep-int New Economics Papers
on International Trade
Issue of 2006‒08‒12
twenty-six papers chosen by
Martin Berka
Massey University

  1. Innovation, Diffusion, and Trade By Jonathan Eaton; Samuel Kortum
  3. Vertical international trade as a monetary transmission mechanism in an open economy By K. Huang; Z. Liu
  4. Human capital, trade and long-run productivity. Testing the technological absorption hypothesis for the Portuguese economy, 1960-2001 By Aurora A.C. Teixeira; Natércia Fortuna
  5. WTO Contstaints and the CAP: Domestic Support in EU 25 Agriculture By Jean-Pierre Butault; Jean-Christophe Bureau
  6. Dynamic environmental policy in developing countries in the presence of a balance of trade deficit and a tariff By A. Batabyal; H. Beladi; D. Lee
  7. Factor Returns, Institutions, and Geography: A View From Trade By Scott L. Baier; Gerald P. Dwyer; Robert Tamura
  8. Are Price Changes in the World Market Transmitted to Markets in Less Developed Countries? A Case Study of Sugar, Cotton, Wheat, and Rice in Tanzania By F. T. M. Kilima
  9. The impact of European integration on the nineties’ wave of mergers and acquisitions By Pierre-Guillaume Méon; Anne-France Delannay
  10. Agglomeration and comparative advantage in vertically-related firms By José Pedro Pontes
  11. Bilateral Services Trade Data and the GTAP database By Nico van Leeuwen; Arjan Lejour
  12. Trade Flows of Agricultural Products with Ireland and the EU : An Analysis for Six African Countries By Hannah Chaplin
  13. Cross-Border Mergers and National Champions in an Integrating Economy By Jens Suedekum
  14. The Doha Development Agenda: Mixed Prospects for Developing Countries By Alan Matthews; Keith Walsh
  15. Trade Liberalisation Scenarios for Wool Under an Australia-China Free Trade Agreement By Yinhua Mai; Philip Adams
  16. Modelling the Potential Benefits of an Australia-China free Trade Agreement By Yinhua Mai; Philip Adams; Mingtai Fan; Ronglin Li; Zhaoyang Zheng
  17. Removal of U.S. Ethanol Domestic and Trade Distortions: Impact on U.S. and Brazilian Ethanol Markets By Amani Elobeid; Simla Tokgoz
  18. The Theory of Tariff Rate Quotas: An Application to the U.S. Sugar program using MONASH-USA By Ashley Winston
  19. Is Regionalism an Increasing Feature of the World Economy? By Richard Pomfret
  20. The Strength of Vertical Linkages By Jan Kranich
  21. National economic policy simulations with global interdependencies : a sensitivity analysis for Germany By Meyer, Bernd; Lutz, Christian; Schnur, Peter; Zika, Gerd
  22. The MONASH-Multi-Country (MMC) Model and the Investment Liberalisation in China's Oil Industry By Yinhua Mai
  23. Genetic, Cultural and Geographical Distances By Paola Giuliano; Antonio Spilimbergo; Giovanni Tonon
  24. Situating Middle East and North Africa (MENA) capital markets within the emerging markets universe By Thomass Lagoardde-Segot; Brian M. Lucey
  25. Analyzing Economic Structural Change in a General Equilibrium Framework: The case of Switzerland from 1990 to 2001 By Laurent Cretegny
  26. Export Processing Zones and Environmental Policy By Noriko Yasuyuki Sugiyama

  1. By: Jonathan Eaton; Samuel Kortum
    Abstract: We explore the determinants of research specialization across countries and its consequences for relative wages. Using a dynamic Ricardian model we examine the effects of faster international technology diffusion and lower trade barriers on the incentive to innovate. In the absence of any diffusion at all, countries devote the same share of resources toward research regardless of trade barriers or research productivity. As long as trade barriers are not too high, faster diffusion shifts research activity toward the country that does it better. This shift in research activity raises the relative wage there. It can even mean that, with more diffusion, the country better at research ends up with a larger share of technologies in its exclusive domain.
    JEL: F1 O3 O4
    Date: 2006–07
  2. By: Jeffrey G. Williamson
    Abstract: Between 1810 and 1940, a large GDP per capita gap appeared between the industrial core and the poor periphery, the latter producing, increasingly, primary products. Over the same period, the terms of trade facing the periphery underwent a secular boom then bust, peaking in the 1870s or 1890s. These terms of trade trends appear to have been exogenous to the periphery. Additionally, the terms of trade facing the periphery exhibited relatively high volatility. Are these correlations spurious, or are they causal? This Figuerola Lecture, to be given at Carlos III University (Madrid) , argues that they are causal, that secular growth and volatility in the terms of trade had asymmetric effects on core and periphery. On the upswing, the secular rise in its terms of trade had powerful de - industrialization effects in the periphery. Over the full cycle 1810-1940, terms of trade volatility suppressed accumulation and growth in the periphery as well.
    Date: 2005–10
  3. By: K. Huang; Z. Liu
    Abstract: This paper analyzes a two-country general equilibrium model with multiple stages of production and sticky prices. Working through the cross-country input-output relations and endogenous price stickiness, the model generates the observed patterns in international aggregate comovements following monetary shocks. In particular, both output and consumption comove across countries, and output correlation is larger than consumption correlation, as in the data. The model also generates persistent fluctuations of real exchange rates. Thus, vertical international trade plays an important role in propagating monetary shocks in an open economy.
    Keywords: Vertical international trade, monetary policy, international comovements, real exchange rate persistence
    JEL: E32 F31 F41
  4. By: Aurora A.C. Teixeira (CEMPRE, Faculdade de Economia do Porto, Universidade do Porto); Natércia Fortuna (CEMPRE, Faculdade de Economia do Porto, Universidade do Porto)
    Abstract: An important characteristic of the role of foreign trade in the technological catch-up of countries is the complementary nature of technological change and human capital formation. In this context, the level of education is likely to have a crucial impact on total factor productivity because it determines the capacity of an economy to carry out technological innovation, and to adopt and to implement efficiently technology from abroad. However, the role of human capital as a pre requisite for technology absorption although theoretically acknowledged has been empirically neglected. One of the main problems with empirical studies in this domain is that they do not clearly test the mechanisms through which trade, namely the import of capital goods, affects total factor productivity or, roughly the level of technological development of a given country. Through cointegration techniques, we demonstrate the relevance of the technological absorption hypothesis. We show that the interaction between human capital and (lagged) machinery imports – that is, the technological absorption capability - is the most critical determinant of Portuguese long-run total factor productivity.
    Keywords: Human capital – Innovation – Trade – Economic growth – Cointegration
    JEL: C22 J24 O30 O40
    Date: 2006–08
  5. By: Jean-Pierre Butault; Jean-Christophe Bureau
    Abstract: The most recent EU notifications to the World Trade Organization regarding domestic support refer to the EU-15, i.e. before significant reforms of the direct payments as well as the reforms of the Mediterranean products, hops, sugar, etc. that took place after 2003. We estimate the actual level of domestic support, as measured by the WTO Aggregate Measure of Support (AMS), given the 2004 EU enlargement and the recent reforms of the Common Agricultural Policy (CAP). We then compare the different proposals for a new discipline on domestic support that were recently issued under the Doha Development Round and we assess the constraints imposed on the Common Agricultural Policy (CAP). The EU proposal prior to the 2005 Hong Kong WTO ministerial meeting was that the EU would cut its present AMS and Overall Trade Distorting Support (OTDS) ceilings by 70% in either case. We find that such a cut mainly consolidates under the WTO the significant changes made to EU domestic support policies since the conclusion of the Uruguay Round. However, there are some downside risks for the EU and much depends on the further negotiations on the details of the disciplines to be agreed (e.g. the base period for the OTDS reference). In addition, a 70% cut leave no freedom for counting some potentially controversial subsidies against the AMS if needed. Accession of Bulgarian and Romania will make the constraints more binding. The ability to meet the domestic support discipline of the EU offer relies on the assumption that its market access component will lead to a significant reduction in the remaining AMS (particularly important in the case of fruits and vegetables). Overall, the EU proposal regarding a cut in the AMS is binding, even though it requires rather minor and sectoral changes to the CAP. Proposals that beyond the EU ‘Hong Kong’ offer require reforming some common market organizations, but could be dealt with if the EU implemented a significant reform of the fruits and vegetables sector, that might give a larger degree of freedom regarding the AMS ceiling.
    Date: 2006–08–02
  6. By: A. Batabyal; H. Beladi; D. Lee
    Abstract: We first review the literature pertaining to the protection of the modern sector in developing countries (DCs). We then discuss the nexuses between protection, economic dualism, and optimal environmental policy in DCs. Next, in the theoretical part of the paper, we construct a dynamic model of the environmental policy formulation process in a stylized DC in which there is a balance of trade deficit, and a tariff that protects the modern—also the import competing and the polluting—sector. The employment and output effects of three different pollution taxes are analyzed. These taxes incorporate different assumptions about the DC government’s ability to commit to its announced course of action. The taxes are characterized, the dependence of these taxes on the extant tariff is studied, and the conditions that call for an activist policy, irrespective of the length of time to which the government can commit to its announced policy, are specified. Our analysis shows that the dynamic inconsistence of some optimal programs and the existence of the tariff can—either singly or collectively—prevent the DC government from attaining its employment and environmental goals.
    Keywords: commitment, developing country, environmental policy, tariff, trade deficit
    JEL: O20 Q20
  7. By: Scott L. Baier; Gerald P. Dwyer; Robert Tamura
    Abstract: We examine the importance of institutions and geography for determining workers' wages and the return to capital. These returns to labor and capital are examined through the lens of labor and capital's productivities, which are directly related to the factors' returns. We estimate productivities of labor and capital based on trade flows across countries and present statistical evidence that these productivities are related to total factor productivities which rationalize output differences across countries. We examine whether these labor and capital productivities are related to countries' political institutions and geography. Protection of property rights is the dominant influence on both labor and capital productivity. There is some evidence that a democratic government affects productivity, but once property rights are included in the analysis, the overall democracy index has little influence on factor productivity.. Geography is only important in terms of distance to a large market. Factors such as the incidence of malaria are relatively unimportant. The unimportance of geography is not only statistical. For example, if the Philippines kept its geography but had the United Kingdom 's institutions, the Philippines ' labor productivity would increase from seven percent to 75 percent of the U.S. 's and capital productivity would increase from 25 percent to 58 percent of the U.S. 's. On the other hand, if the Philippines were to keep its institutions and were magically more to the United Kingdom 's geographic location, labor productivity would increase only from seven percent to 28 percent and capital productivity would increase from 25 percent to 26 percent.
    Date: 2006–08–02
  8. By: F. T. M. Kilima
    Abstract: This paper investigates the extent to which world market price changes are transmitted through changes in border prices into local producer prices for four agricultural product markets in Tanzania: sugar, cotton, wheat and rice. The changes in the marketing channels for each of these products resulting from market liberalization are described. The statistical analysis finds that, in general, Tanzanian border and world market prices for these products do not move closely together, although there is evidence that border prices are influenced by world market price levels but not vice versa. The absence of monthly price data at producer level for these products did not permit a detailed examination of the relationship between farmgate prices and either border prices or world market prices. However, the qualitative discussion suggests that the extent of price transmission is likely to be imperfect. These results have implications for the interpretation of simulation results modelling the potential impact of trade policy changes on Tanzanian producers and consumers. They also underline the need for concerted efforts by policy makers to reduce the extent of monopoly power in these marketing chains and to improve the degree of price transmission.
    Keywords: Agricultural trade, price transmission, developing countries
    Date: 2006–08–01
  9. By: Pierre-Guillaume Méon (DULBEA-CERT, Université libre de Bruxelles, Brussels); Anne-France Delannay (Université Robert Schuman, France)
    Abstract: The present paper applies a gravity model with fixed country effects to M&A flows on a sample of 1215 pairs of countries over the 1998-2001 period, to test the impact of European integration. That model, which had to our knowledge not been applied to M&A flows so far, allows us to observe that the participation of two countries in the process of European integration is associated with a smaller negative impact of distance on the number and the value of those countries’ bilateral M&A flows. We observe no such effect for the EMU however.
    Keywords: Mergers and acquisitions, multinational firms, gravity models, European integration, EMU
    JEL: F15 F23 G34
    Date: 2006–07
  10. By: José Pedro Pontes
    Abstract: This paper models, in game-theoretical terms, the location of two vertically-linked monopolistic firms in a spatial economy formed by a large, high labor cost country and a relatively small, low labor cost country. It is found that the decrease in transport costs shifts firms towards the low production cost country. This process takes two different forms: in labor-intensive industries it leads to spatial fragmentation; in industries with strong input-output relations, agglomerations are conserved, although they shift toward the low labor cost country.
    Keywords: Location; Intermediate goods; Agglomeration; Comparative advantage.
    JEL: F10 F12 R30
  11. By: Nico van Leeuwen; Arjan Lejour
    Abstract: This paper has two aims. The first is a description of CPB's method to modify the GTAP data base, version 6 with bilateral services trade data. The source for constructing bilateral flows in this paper is a recent comprehensive database from the OECD which was established in cooperation with Eurostat, based on the concepts and framework of trade in services set out by the IMF in their balance of payments statistics. We manage to cover flows between 24 OECD countries and four sectors, which equals approximately 75% of the total flows of services world trade in 2001. On the other hand however, it doesn't cover all GTAP services sectors. The second is our proposal to contribute (updated) bilateral services trade data to the GTAP database, version 7, base year 2004. These data will include 24 reporting OECD countries with 24 to 55 partner countries for 10 services sectors.
    Keywords: trade in services; reconciling bilateral trade data
    JEL: F10 F17
    Date: 2006–08
  12. By: Hannah Chaplin
    Abstract: This paper documents the nature and importance of agricultural trade flows between the six Irish Aid programme countries in Sub-Saharan Africa and Ireland and the EU-15 over the period 1995-2003. The six countries are: Ethiopia, Uganda, Tanzania, Zambia, Mozambique and Lesotho. Agricultural exports from these countries are highly specialised, with coffee, tea and fish and fish products dominating. There is some evidence that improved market access to the EU under the Everything But Arms initiative has led to increased exports, particularly of sugar. The pattern of Ireland’s agricultural trade with the six countries differs in significant ways from the EU-15 as a whole. The agricultural trade balance was positive from the perspective of the Irish Aid programme countries, but the balance was declining over time.
    Keywords: Agricultural trade, developing countries
    Date: 2006–08–01
  13. By: Jens Suedekum (University of Konstanz and IZA Bonn)
    Abstract: We introduce a simple oligopolistic trade model with international transportation costs, and analyze the profitability and the social desirability of national vs. international mergers in relation to three different issues, (i) the level of trade freeness, (ii) the possibility of rent appropriation on world markets, and (iii) direct "synergy" effects of mergers. Cross-border M&A is privately and socially more attractive than domestic mergers. National competition policy may be too permissive towards M&A, because it does not take into account the negative impact of decreasing competition on world consumer surplus. We also discuss the normative implications of "national champions". The promotion of national mergers can be in the interest of individual countries if rent extraction possibilities are strong enough, but global welfare is adversely affected.
    Keywords: mergers, national champions, international trade, economic integration
    JEL: F12 F23 L13 L52
    Date: 2006–07
  14. By: Alan Matthews; Keith Walsh
    Abstract: This paper uses the GTAP computable general equilibrium model to assess the impact of a Doha Development Agenda agreement on agricultural trade liberalisation. In particular, we examine the consequences for developing countries. The simulation incorporates further liberalisation in the areas of market access, export competition and domestic support. Most developing regions can expect strong positive results from this liberalisation, however some suffer a decrease in welfare. The magnitude of the welfare effect for these countries depends on measures to be taken by developing countries themselves, and whether they will materialise must be uncertain. The results highlight the importance of the impact of further liberalisation of the erosion of preferential trading arrangements enjoyed by developing regions.
    Keywords: Agricultural trade liberalisation, GTAP, developing countries
    Date: 2006–08–01
  15. By: Yinhua Mai; Philip Adams
    Abstract: This study analyses the effects of removing Tariff Rate Quota (TRQ) and other barriers on wool imports into China using the Monash Multi-Country (MMC) model, a dynamic Computable General Equilibrium Model of Australia, China and the Rest of the World. The study suggests that TRQ on greasy wool represents the most restrictive barriers to wool imports into China, if the current level of quota holds. The elimination of TRQ on greasy wool is found to boost Chinese imports of wool from Australia and Chinese exports of textiles and clothing products to the Rest of the World significantly. The Australian wool and Chinese textiles and clothing industries stand to gain from the elimination of TRQ on greasy wool. Both countries also gain in terms of a slightly higher growth in real GDP and real GNP due to the elimination of TRQ on wool imports into China.
    Keywords: Wool, China, FTA
    JEL: D58 F15 Q17
    Date: 2005–10
  16. By: Yinhua Mai; Philip Adams; Mingtai Fan; Ronglin Li; Zhaoyang Zheng
    Abstract: In this study, we simulated three potential scenarios of an Australia-China Free Trade Agreement (FTA): removal of border protection on merchandise trade, investment facilitation, and removal of barriers to services trade. The analytical framework is a multi-country, multi-sector computable general equilibrium model, the Monash-Multi-Country (MMC) model. The FTA is found to deepen the two-country's economic partnership developed in the past fifteen or so years. On one hand, it sharpens the competitiveness of the Chinese manufacturing sector by reducing its costs of intermediate inputs. On the other hand, it raises the welfare of Australian consumers through improved terms of trade. In achieving a better utilisation of resources, adjustment of labour between sectors does occur. However, such adjustment is small in scale compared with what is occurring in the two countries amid globalisation without an FTA.
    Keywords: China, Australia, FTA, investment liberalisation
    JEL: D58 F15 F21 O53
    Date: 2005–10
  17. By: Amani Elobeid (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Simla Tokgoz (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI))
    Abstract: We analyze the impact of trade liberalization and removal of the federal tax credit in the United States on U.S. and Brazilian ethanol markets using a multi-market international ethanol model calibrated on 2005 market data and policies. The removal of trade distortions induces a 23.2 percent increase in the price of world ethanol on average between 2006 and 2015 relative to the baseline. The U.S. domestic ethanol price decreases by 14.1 percent, which results in a 7.5 percent decline in production and a 3.2 percent increase in consumption. The lower domestic price leads to a 2.5 percent rise in the share of fuel ethanol in gasoline consumption. U.S. net ethanol imports increase by 192.8 percent. Brazil responds to the higher world ethanol price by increasing its production by 8.8 percent on average. Total ethanol consumption in Brazil decreases by 3.2 percent and net exports increase by 61.9 percent relative to the baseline. The higher ethanol price leads to a 4.7 percent increase in the share of sugarcane used in ethanol production. The removal of trade distortions and 51¢ per gallon tax credit to refiners blending ethanol induces a 22.5 percent increase in the world ethanol price.
    Keywords: biofuels, ethanol, renewable fuels, trade liberalization. JEL code: F13, F17, Q17, Q18, Q42
    Date: 2006–08
  18. By: Ashley Winston
    Abstract: MONASH-USA (also known as USAGE-ITC) is a detailed dynamic general equilibrium model of the U.S. developed by the Centre of Policy Studies in collaboration with the U.S. International Trade Commission. This paper reports on the theoretical developments completed for a project intended to (a) add detail to the industry and commodity classification of the relevant sectors and (b) create a detailed modelling structure for the U.S. trade and industry-support policies that affect these sectors. A secondary theme of the research is the development and application of methods for modelling complementarity relationships in a large-scale general equilibrium framework. Data issues and simulation results are discussed in a second paper.
    Keywords: international trade, agricultural policy, sugar, commercial policy, tariff-rate quotas, complementarity relationships, dynamic general equilibrium modelling
    JEL: C61 C63 C68 D58 F13 Q13 Q17 Q18
    Date: 2005–07
  19. By: Richard Pomfret
    Abstract: Measuring the importance of regionalism in international trade is desirable but difficult. The number of regional trade agreements (RTAs) reported to the WTO or the proportion of world trade which is between countries in a RTA are frequently cited as evidence that regionalism is growing at an accelerating rate. This paper questions whether RTAs really are as important as the headline numbers suggest, or whether they just occupy an excessively large part of policymakers' and economic journalists' time. The main contributions are to analyse the number of RTAs and the share of world trade criteria in order to show why both are meaningless measures of the extent of regionalism in the current world economy. The impact of RTAs on world trade is difficult to assess because some of the most important RTAs go beyond trade to deep integration measures, while a large number of RTAs are either not implemented or have very limited coverage. The tendency towards extreme outcomes (ie. economic union or negligible economic effects) explains why, despite the apparent proliferation of RTAs, regionalism has not posed a serious challenge to the world economy as the multilateral trading system has over the last sixty years gone from strength to strength.
    Date: 2006–08–02
  20. By: Jan Kranich (Institute of Economics, University of Lüneburg)
    Abstract: This paper discusses the interdenpendencies that exist between vertically-linked industries in the (Spence-)Dixit-Stiglitz model of monopolistic competition. The main objective is to develop a concept for quantifying the magnitude of sectoral coherence in models of the New Economic Geography. It is motivated by the suggestion, by Venables (1996), that `strategic industries` be identified in terms of their agglomeration potential. Using a partial-analytic approach, we focus on inter-industrial relations in a closed economy to draw conclusions regarding international trade. We ascertain that two factors have an impact upon the strength of industrial linkages: 1) the monopolistic scope of intermediate suppliers, in terms of (technical) substitution elasticity; and the share in downstream costs for intermediates. Within a simulation study, this paper applies this new theoretical concept to eight basic industries across ten European countries.
    Keywords: New Economic Geography, Vertical Linkages
    JEL: F12 F14 F17
    Date: 2006–07–19
  21. By: Meyer, Bernd; Lutz, Christian; Schnur, Peter (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Zika, Gerd (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Policy simulations for national economies with econometric models in general are done using a stand alone national model with exogenous export values and import prices. In a globalised world such an exercise is critical, since the policy in question may change the export prices and the import volumes of the particular country and induce via international trade a change of the economic activities of the global economy and a feed back to the export values and import prices of the particular country. The paper at hand presents a sensitivity analysis for Germany comparing the impacts of a shock on investment in a stand alone simulation using the multisector model INFORGE with the results, which occur, if the same model is linked to the global multicountry/multisector model GINFORS endogenising Germany's export values and import prices. The results are striking: The effect on real GDP is 50% higher in the global simulation than in the stand alone case. Because of the specialisation in trade the differences on the sector level are even stronger." (author's abstract, IAB-Doku) ((en))
    Date: 2006–06–01
  22. By: Yinhua Mai
    Abstract: Computable general equilibrium models have been widely applied in analysing the effects of removing tariffs. However, not nearly as much effort has been devoted to their application on investment liberalisation that is increasingly an integral part of trade liberalisation agreements. The Monash-Multi-Country (MMC) model is developed to meet such policy needs. The MMC model is an advanced dynamic CGE model with bilateral investment flows between countries/regions modelled explicitly at an industry level. This paper describes the model structure and data of the MMC model. Its application is illustrated by a simulation of a potential investment liberalisation in China's oil industry.
    Keywords: China, oil industry, investment liberalisation, CGE modelling
    JEL: D58 F15 F21
    Date: 2005–10
  23. By: Paola Giuliano (International Monetary Fund and IZA Bonn); Antonio Spilimbergo (International Monetary Fund, CEPR and WDI); Giovanni Tonon (DFCI, Harvard University)
    Abstract: This paper investigates how the measures of genetic distance between populations, which have been used in anthropology and historical linguistics, can be used in economics. What does the correlation between genetic distance and economic variables mean? Using the measure of genetic distance, a newly-collected database on transport costs, as well as more refined measures of geography within Europe, we show that i) geography explains both genetic distance and transportation costs between European countries, and ii) genetic distance does not explain economic outcomes once we control for geography. We conclude that genetic distance in economics capture transportation costs between countries and not cultural differences.
    Keywords: transport costs, genetics, trade, geography
    JEL: Z10 F10
    Date: 2006–07
  24. By: Thomass Lagoardde-Segot; Brian M. Lucey
    Abstract: The objective of this paper is to situate the MENA area within the emerging markets universe. We first discuss the various components of market emergence and generate four bootstrapped indexes reflecting market size, market activity, market pricing and transparency. We then draw inter-regional and country-level comparisons using a probit model and a hierarchical cluster analysis. Our results suggest that in spite of intra-regional heterogeneity, the MENA region ranks favorably by comparison to Latin America and Eastern Europe. We can therefore expect greater international financial integration of the MENA region in the near future.
    Keywords: Common Agricultural Policy, World Trade Organizations, Trade Negotiations.
    Date: 2006–08–02
  25. By: Laurent Cretegny
    Abstract: Structural change is influenced by many factors, including technological changes and shifts in consumer preferences. These factors have an important impact on economic performance through the reallocation of resources from one economic activity to another. Applying SwissAGE, a general equilibrium model for Switzerland, this study focuses first on the estimation of changes in technology and consumer preferences. It shows then how economic history can be explained in terms of these driving factors. In particular, it shows that decrease in capital/labour ratio mitigates growth in real GDP and increase in export-oriented production heavily contributes to rapid growth in Swiss trade across the period 1990 to 2001..
    Keywords: Technological change Preference change Dynamic CGE modelling Swiss structural change Trade growth
    JEL: D24 D58 C68 F14
    Date: 2005–05
  26. By: Noriko Yasuyuki Sugiyama (Graduate School of Economics, Osaka University)
    Abstract: This paper investigates the relation between an export processing zone and a pollution quota in a small country. The model suppose that the pollution target is implemented with a marketable permit system, and the government sets the quota to maximize domestic welfare. Then we show that, if an increase in real income reduces marginal external damage, the pollution quota is relieved by the formation of an export processing zone. However, if the marginal damage is augmented with an increase in the income, the optimal quota might be strengthened by the formation of the zone.
    Keywords: export processing zone, international trade, environmental policy, pollution
    JEL: F18 O24
    Date: 2006–08

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