the welfare economics of local public spending an empirical approach it has been suggested that spillover effects between politically autonomous local governments are common and that they present a welfare problem for the community as a whole a local government might under invest in roads for example because they are used by non residents or in schools because school leavers move out of the area other researchers and many consumers have found fault in the mechanisms of public choice or have claimed that electorates have negligible effective control over the local bureaucracy as far as output is concerned there might well be a serious local welfare problem even without spillovers this paper offers an empirically operational methodology for the welfare economic evaluation of local public spending the setting is the system of local government in sydney australia although the theoretical approach can be readily adapted to other settings the questions addressed are a is there evidence of positive spillovers and do they imply welf arerelevant externalities when prices quantities and locations have adjusted b is an increase in local spending desirable for local residents c on balance what can be said about the effect on aggregate welfare of a local fiscal expansion the key to the theoretical approach and its testable implications is the idea that the residential mobility of households between local governments reveals preferences over local public goods this can be traced to tiebout 1956 although the present model is appropriate to a considerably more general setting in which restrictions on mobility spillover effects and local government inefficiencies are allowed the central problem for the present analysis is to infer consumer preferences over local fiscal policies from observed differences in the rates of population growth between local governments as far as spillovers are concerned it is useful to make the following distinction from the outset direct externalities are said to be present when for given consumptions of non government goods and given residential locations an individual in one local political jurisdiction is not indifferent between alternative expenditures by another government mobility externalities result when the welfare of a local resident is affected

sprawl or reagglomeration the dynamics of employment deconcentration and industrial transformation in greater paris from 1975 to 1999 employment in the paris metropolitan area became more and more decentralised the losses from central areas were divided equally between sprawl and peripheral clusters parallel to the deconcentration of jobs the growth of a services oriented economy has led to an increase in sectoral concentration however there is no clear evidence of a vertical spatial disintegration because at the same time the economy of all places has tended to diversify one explanation might be that sprawl relies both on endogenous job creation and on job relocation relocations tend to increase the specialisation of the clusters while endogenous growth is more diverse thanks to the importance of domestic activities

spatial evolution of the computer industry in the usa abstract this paper examines the spatial evolution of computers across 317 metro areas in the usa since the introduction of the personal computer we start by examining the relative distribution of employment across cities examining how that distribution changes in 1977 1992 and how cities move through the distribution for computers transition matrices are stationary with the industry exhibiting no tendency to settle down nor any tendency of retrenchment during periods of national high tech employment decline there is no tendency of the relative size distribution of computer employment to collapse go bimodal etc overall computers exhibit some turbulence with dramatic big winners and losers among cities as well as persistence for some cities in employment shares in attracting or repelling an industry urban heterogeneity is important large well educated cities near san jose have a much greater chance of attracting high tech employment much lower mean first passage times moving up states and less chance of losing it in assessing the determinants of persistence in local employment patterns we examine sources of productivity growth we find strong evidence of significant dynamic own industry externalities for single plant firms and little evidence of urbanization jacobs knowledge type externalities corporate plants in computers seem to be self reliant and not really influenced by externalities

children of war the long run effects of large scale physical destruction and warfare on children this paper provides causal evidence on the long term consequences of large scale physical destruction on educational attainment health status and labor market outcomes of children i exploit the plausibly exogenous region by cohort variation in the intensity of world war two wwii destruction as a unique quasi experiment i find that exposure to destruction had long lasting detrimental effects on the human capital formation health and labor market outcomes of germans who were at school age during wwii an important channel for the effect of destruction on educational attainment is the destruction of schools whereas malnutrition is partly behind the estimated impact on health

humanitarian crises and adolescent well being knowledge gaps and prospects adolescence constitutes the second and final window of human growth and a period of specific vulnerabilities such as early pregnancy early marriage hiv infection suicide violence alcohol and drugs only a limited body of research investigates the effects of humanitarian crises on the human capital and well being of adolescents the evidence focuses on the short term effects of conflict and to a lesser extent natural disasters on education physical health and nutrition but not on mental health most analyses examine the situations of individuals exposed in utero and young childhood but rarely during adolescence typically missing are robust empirical identification strategies and estimates on heterogeneous effects across age or gender the lack of quality data and challenges in defining adolescence establishing causality or ensuring ethical research explain the knowledge gaps possible ways to expand the evidence base include mixing georeferenced data on individual location with georeferenced data on crises sharpening quasi experimental analytical techniques and reconsidering the current timing of demographic data collection now spanning 4 or 5 year intervals the failure to make such adjustments will end by ignoring specific vulnerabilities among adolescents and render sustainable progress in well being globally narrowing inequalities and guaranteeing human rights to all more difficult to achieve

a new approach to decomposition of economic time series into permanent and transitory components with particular attention to measurement of the business cycle abstract this paper introduces a general procedure for decomposition of non stationary time series into a permanent and transitory component allowing both components to be stochastic the permanent component is shown to be a random walk with drift and the transitory or cyclical component is a stationary process with mean zero the decomposition methodology which depends only on past data and therefore is computable in real time is applied to the problem of measuring and dating business cycles in the portwar u s economy we find that measured expansions and contractions are of roughly equivalent duration and that our dating of cyclical episodes tends to lead the traditional nber dating and to a lesser extent the growth cycle chronology of zarnowitz and boschan 1977

investment and the exchange rate an analysis with firm level panel data abstract this paper investigates the relationship between exchange rate fluctuations and the investment decisions of a sample of italian manufacturing firms the results support the view that a depreciation of the exchange rate has a positive effect on investment through the revenue channel and a negative effect through the cost channel the magnitude of these effects varies over time with changes in the firm s external orientation as measured by the share of foreign sales over total sales and the reliance on imported inputs consistent with the predictions of our theoretical framework the effect of exchange rate fluctuations on investment is stronger for firms with low monopoly power facing a high degree of import penetration in the domestic market and of a small size we also provide evidence that the degree of substitutability between domestically produced and imported inputs influences the effect through the expenditure side

sudden stops and the mexican wave currency crises capital flow reversals and output loss in emerging markets sudden stops are the simultaneous occurrence of a currency balance of payments crisis with a reversal in capital flows we investigate whether sudden stop crises are a unique phenomenon and whether they entail an especially large and abrupt pattern of output collapse a bmexican waveq using a panel data set over 1975 1997 and covering 24 emerging market economies we distinguish between the output effects of currency crises capital inflow reversals and sudden stop crises sudden stop crises have a large negative but short lived impact on output growth over and above that found with currency crises a currency crisis typically reduces output by about 2 3 while a sudden stop reduces output by an additional 6 8 in the year of the crisis the cumulative output loss of a sudden stop is even larger around 13 15 over a 3 year period our model estimates correspond closely to the output dynamics of the dmexican wavet such as seen in mexico in 1995 turkey in 1994 and elsewhere and out of sample predictions of the model explain well the sudden and seemingly unexpected collapse in output associated with the 1997 1998 asian crisis d 2005 elsevier b v all rights reserved

exchange rate exposure and industry characteristics evidence from canada japan and the usa abstract this paper examines industry level exchange rate exposures for canada japan and the usa measuring exposure by adding the change in the exchange rate to the domestic market model of industry portfolio returns some industries in all three countries display significant exposures moreover for each country the exchange rate is important for explaining industry returns at the economy wide level to explore whether exchange rate exposures are systematically linked to the activities of the industries we model exposure as a function of industry characteristics for all three countries the relation between exposure and industry characteristics is broadly consistent with economic theory jel f3

taxation and the tiebout model the differential effects of head taxes taxes on land rents and property taxes on the theory of state and local public finance is the seminal paper by charles tiebout 1956 tiebout constructed a multijurisdictional model in which independent local governments offer a wide variety of expenditure and tax policies and perfectly mobile consumers reveal their preferences for local public goods through their choice of residential community he argued that under such circumstances local public service provision would be efficient the tiebout model has formed the basis of a vast number of subsequent articles in the state and local public finance literature and has also been very influential in urban and regional economics the efficiency properties of various tiebout type models of local public good provision have been examined and the role of politics in these models has been debated at length in this literature of more direct relevance to this paper however is the fact that although tiebout had little to say directly about taxation simply assuming the existence of head taxes subsequent analyses have used adaptations of this model to examine the effects of local head taxes land taxes and property taxes it is the literature on the efficiency and distributional effects of alternative local taxes that is the subject of this survey 1

an equilibrium model of city size abstract this paper develops an equilibrium model of city size in which population distribution real prices and real wages are determined two possible modifications are considered one involving externalities the partial equilibrium changes resulting from these modifications are derived and seen to be quite different from the general equilibrium changes finally the paper suggests that site specific factors of production must be introduced into any consistent model of city size

measuring the intensity of competition in export markets abstract this paper develops an approach to measuring the intensity of competition in international markets using readily available data on destination specific values and quantities of exports at the seven digit industry level the intensity of competition a group of exporters faces in a particular export market is measured by the residual demand elasticity the group faces this elasticity is identified by exchange rate shocks which rotate the supply relation of the source country export group relative to competitors located in other countries we apply this method to german exports of beer and us exports of linerboard paper the resulting estimates of market power appear to be plausible and consistent with other indicators of competition e g market shares the number of competitors providing support for the applicability of our framework in measuring competition in international markets

growth and exchange rate volatility a panel data analysis the aim of this article is to assess the role of real exchange rate rer volatility on long run economic growth for a set of 82 advanced and emerging economies using a panel data set ranging from 1970 to 2009 with an accurate measure for exchange rate volatility the results for the two step system generalized method of moments gmm panel growth models show that a more less volatile rer has a significant negative positive impact on economic growth the results are also robust for different model specifications

the long run labor market consequences of civil war evidence from the shining path in peru abstractthis study exploits district level variation in the timing and intensity of civil war violence to investigate whether early life exposure to civil wars affects labor market outcomes later in life in particular we examine the impacts of armed conflict in peru a country that experienced the actions of a tenacious brutally effective war machine the shining path between 1980 and 1995 this study finds that the most sensitive period to early life exposure to civil war violence is the first 36 months of life a 1 standard deviation increase in civil war exposure leads to a 5 fall in adult monthly earnings 3 5 reduction in the probability of working in formal jobs and 6 reduction in the probability of working in large firms substantial heterogeneity in the earnings impacts emerges when considering variation in the type of civil war violence overall forced disappearances emerge as the most hurtful measure of violence in the long run sexual violations disproportionately affected the wages of

effects of conflict on agriculture evidence from the boko haram insurgency abstract we investigate the effects of conflict on agriculture using the boko haram insurgency as a case study we identify the output input infrastructure and human capital effects as direct effects and the loss of talent and other environmental factors as indirect effects identified market effects include effects on product and input prices and increased risk premiums by combining a nationally representative panel dataset on nigerian agriculture with armed conflict data we find that the increased intensity of boko haram attacks significantly reduces total output and productivity but not land use and reduces the outputs of specific staple crops such as sorghum cassava soya and yam conflict is also found to reduce the hours of hired labor for men and women but does not affect the use of family labor agricultural wages are however significantly affected because it reveals if why and how conflict affects agriculture this study has important implications for post crisis recovery and agricultural development

business cycles and the relationship between concentration and price cost margins using a newly constructed panel data base we examine changes in price cost margins in 284 manufacturing industries between 1958 and 1981 a key finding is a dramatic narrowing of the spread between the margins of concentrated and unconcentrated industries over this period we provide evidence that this narrowing is a result of the greater sensitivity of price cost margins in more concentrated industries to demand fluctuations this finding is robust to the inclusion of other industry variables and to measures of import competition the results indicate that cross sectional estimates of the concentration margins relationship are likely to be both biased and misleading

civil conflict and human capital accumulation the long term effects of political violence in peru this paper provides empirical evidence of the persistent effect of exposure to political violence on human capital accumulation i exploit the variation in conflict location and birth cohorts to identify the long and short term effects of the civil war on educational attainment conditional on being exposed to violence the average person accumulates 0 31 less years of education as an adult in the short term the effects are stronger than in the long run these results hold when comparing children within the same household further exposure to violence during early childhood leads to permanent losses i also explore the potential causal mechanisms

modelling real exchange rate effects on output performance in latin america this article empirically analyses real per capita gdp growth for six latin american countries argentina brazil chile columbia mexico venezuela in terms of real exchange rate depreciations inflation and us interest rates focussing on the role of the real exchange rate we find evidence of nonlinearity in this relationship which we capture through a smooth transition regression model with the exception of mexico nonlinearity in economic growth is associated with changes in the real exchange rate with depreciations leading to different relationships compared with appreciations regimes for mexico are associated with the past growth rates with effectively symmetric effects of real exchange rate changes although our results are in accord with other recent literature in that depreciations may have negative effects for growth the asymmetries we uncover indicate that these effects depend on the conditioning state

child health and conflict in cote d ivoire we examine the impact of the 2002 07 civil conflict in cote d ivoire on children s health status measured by height for age we use pre and post war survey data coupled with information on the location of violent incidents to capture exposure to the conflict of children born during 1997 2007 our results indicate that children from regions more affected by the conflict suffered significant health setbacks compared with children from less affected regions further household level victimization such as war related economic stress health stress and displacement has a large and negative effect on child health in conflict affected regions

the long term educational cost of war evidence from landmine contamination in cambodia abstract the economic impact of war may be visible in the long run and particularly through its impact on human capital this paper uses unique district level data on landmine contamination intensity in cambodia combined with survey data on individuals to evaluate the long run impact of cambodia s 30 years of war 1970 1998 on education levels and earnings these effects are identified using difference in differences dd and instrumental variables iv estimators in the dd framework i exploit two sources of variation in an individual s exposure to the conflict age in 1970 and landmine contamination intensity in the district of residence the iv specification uses the distance to the thai border as an exogenous source of variation in landmine contamination intensity the most conservative result indicates that individuals who were too young to have attended school before the start of the war received on average 0 5 less years of education and immediately after the war there was no visible effect on e

investment pass through and exchange rates a cross country comparison using detailed data from the united states canada the united kingdom and japan we examine the implications of exchange rates for time series of sectoral investment both theoretically and empirically we show that investment responsiveness to exchange rates varies over time positively in relation to sectoral reliance on export share and negatively with respect to the share of imported inputs in production important differences exist in investment endogeneity across high and low price over cost markup sectors with investment in low markup sectors often significantly more responsive to exchange rates cross country differences in investment response are only partially explained by industrial organization arguments

investment in manufacturing exchange rates and external exposure abstract this paper introduces a new measure of external exposure which emphasizes exposure to external markets both through export sales and imported inputs into production and uses this measure to explore the linkage between exchange rates and investment in us industry on average manufacturing sectors have evolved to being primarily import exposed by the early 1980s in low price over cost markup sectors markups are relatively unresponsive to exchange rate changes whereas sectoral investment patterns are strongly affected by contrast high markup industries absorb much of the exchange rate fluctuations in markups and pass relatively little through to real investment

exchange rate exposure abstract in this paper we examine the relationship between exchange rate movements and firm value we estimate the exchange rate exposure of publicly listed firms in a sample of eight non us industrialized and emerging markets we find that exchange rate movements do matter for a significant fraction of firms though which firms are affected and the direction of exposure depends on the specific exchange rate and varies over time suggesting that firms dynamically adjust their behavior in response to exchange rate risk exposure is correlated with firm size multinational status foreign sales international assets and competitiveness and trade at the industry level

exchange rates and investment in united states industry the path of the dollar has significantly influenced investment activity in u s industry the effects of both exchange rate levels and exchange rate volatility have been more pronounced in the 1980s than in the 1970s although aggregate investment data mask some of these relationships the effects of exchange rates on investment are most pronounced in the disaggregate data for manufacturing durable goods sectors and nonmanufacturing sectors these relationships also have changed over time in contrast to the conventional wisdom in the 1980s real dollar depreciations appreciations were likely to be associated with investment contractions expansions copyright 1993 by mit press

quantifying the microeconomic effects of war using panel data evidence from nepal summary the extensive coverage of household surveys in conflict regions in recent decades has fueled a growing literature on the microeconomic effects of war in this paper we use a unique panel dataset to quantify the impact of the nepalese civil conflict on schooling attainment given longitudinal data we are able to directly estimate unobserved individual heterogeneity and thus address selective wartime displacement despite the widely held view that war is detrimental to human capital formation we find no effect of war intensity on schooling attainment once unobserved individual heterogeneity is accounted for we draw on supplementary data to explain our findings

the impact of exchange rate volatility on plant level investment evidence from colombia abstract we estimate the impact of exchange rate volatility on firms investment decisions in a developing country setting employing plant level panel data from the colombian manufacturing census we estimate a dynamic investment equation using the system gmm estimator developed by arellano and bover 1995 and blundell and bond 1998 we find a robust negative impact of exchange rate volatility constructed either using a garch model or a simple standard deviation measure on plant investment consistent with theory we also document that the negative effect is mitigated for establishments with higher mark up or exports and exacerbated for lower mark up plants with larger volume of imported intermediates

the exchange rate exposure of u s multinationals this article examines the exposure of u s multinationals to foreign currency risk evidence is presented that the relationship between stock returns and exchange rates differs systematically across multinationals given these results the study focuses on the determinants of exchange rate exposure the comovements between stock returns and the value of the dollar is found to be positively related to the percentage of foreign operations of u s multinationals copyright 1990 by the university of chicago

the timing of regional development abstract consider a country composed of regions of different qualities or endowments of amenities and natural resources for production and consumption initially only the highest quality regions are occupied as national population grows successively lower quality regions are occupied the equilibrium timing of occupation of uninhabited regions differs from the optimal timing typically being too late policies which would result in better timing are analyzed

goods prices and exchange rates what have we learned import prices typically change by a smaller proportion than the exchange rate between the exporting and importing country recent research indicates that common currency relative prices for similar goods exported to different markets are highly correlated with exchange rates between those markets this evidence suggests that incomplete pass through is a consequence of third degree price discrimination while distance matters for market segmentation borders have independent effects the source of the border effect has not been clearly identified furthermore there is little evidence yet to suggest substantial market power is implied by the observed price discrimination

nominal and real volatility as determinants of fdi this article examines the role of country specific sources of output and interest rate or exchange rate volatility in driving foreign direct investment fdi activities building on a dataset with bilateral fdi flows among 24 organization for economic co operation and development oecd economies over the period 1985 2007 we find that nominal and real volatility strongly deter foreign investments output and exchange rate volatility matter in particular for the decision whether to invest in a foreign country in the first place interest rate volatility mainly influences the amount of foreign investments

conflict displacement and labor market outcomes in post war bosnia and herzegovina abstract the war in bosnia and herzegovina of the early nineties displaced 1 3 million people this study uses longitudinal data to document the effects of this displacement on labor market outcomes to account for endogeneity in displacement i exploit the fact that the level of violence affected the decision to leave and that pre war economic performance is orthogonal to local violence levels i find that displaced bosnians are less likely to be working relative to the people who stayed displaced men experience higher unemployment levels and displaced women are more likely to drop out of the labor force

schooling and labor market consequences of school construction in indonesia evidence from an unusual policy experiment between 1973 and 1978 the indonesian government engaged in one of the largest school construction programs on record combining differences across regions in the number of schools constructed with differences across cohorts induced by the timing of the program suggests that each primary school constructed per 1 000 children led to an average increase of 0 12 to 0 19 years of education as well as a 1 5 to 2 7 percent increase in wages this implies estimates of economic returns to education ranging from 6 8 to 10 6 percent

pass through and exposure firms differ in the extent to which they pass through changes in exchange rates into foreign currency prices and in their exposure to exchange rates the responsiveness of their profits to changes in exchange rates because pricing affects profitability a firm s pass through and exposure should be related this paper develops models of exporting firms under imperfect competition to study these related phenomena from these models we derive the optimal pass through decisions and the resulting exchange rate exposure the models are estimated on eight japanese export industries using both the price data pass through and financial data for exposure exchange rates can have a major inf luence on the pricing behavior and profitability of exporting and importing firms firms differ in the extent to which they pass through the change in exchange rates into the prices they charge in foreign markets they also differ in their exposure to exchange rates the responsiveness of their profits to changes in exchange rates previous papers have studied either pass through or exposure but none has studied these two phenomena together yet because pricing directly affects profitability the exposure of a firm s profits to exchange rates should be governed by many of the same firm and industry characteristics that determine pricing behavior this paper develops models of firm and industry behavior that are used to study these closely related phenomena together it also provides estimates of pass through and exposure behavior using data from japanese export industries to examine pass through behavior and exchange rate exposure we model a firm with sales to a foreign export market this exporting firm competes with a foreign firm in that export market the costs of the exporting firm are based primarily in the local domestic currency while the foreign firm

fiscal and monetary policies and the cost of sudden stops abstract this article investigates the effects of monetary and fiscal policies on output growth during sudden stop balance of payments crisis in emerging markets and developing countries sudden stops in capital flows and subsequent deep recessions are a frequent occurrence in these countries but there is no professional consensus and little systematic empirical evidence shedding light on the macroeconomic policy mix most likely to limit output losses during these episodes to address this issue we investigate 83 sudden stop crisis in 66 countries using a baseline empirical model to control for the various determinants of output losses during sudden stops we measure the marginal effects of policy on output losses and find strong evidence that monetary tightening rise in the discount rate or unsterilized rise in international reserves and discretionary fiscal contraction are significantly correlated with larger output losses following a sudden stop fiscal expansion is associated with smaller output losses following a sudden stop but monetary expansion has no discernable effect the macroeconomic policy mix associated with the least output loss during a sudden stop financial crisis is a discretionary fiscal expansion combined with a neutral monetary policy

civil war crop failure and child stunting in rwanda economic shocks at birth have lasting effects on children s health several years after the shock the authors calculate height for age z scores for children under age five using data from a rwandan nationally representative household survey conducted in 1992 they exploit district and time variation in crop failure and civil conflict to measure the impact of exogenous shocks that children experience at birth on their height several years later they find that boys and girls born after the shock in regions experiencing civil conflict are both negatively affected with height for age z scores 0 30 and 0 72 standard deviations lower respectively conversely only girls are negatively affected by crop failure with these girls exhibiting 0 41 standard deviation lower height for age z scores and the impact is worse for girls in poor households results are robust to using sibling difference estimators household level production and rainfall shocks as alternative measures of crop failure

strategic foreign exchange management this paper argues that it is possible to advise firms on how to hedge against foreign exchange risks only if one has detailed knowledge of the competitive environment they work in to illustrate this we compare firms hedging requirements in a number of different standard industrial organizations models in particular the cournot model a model with conjectural variations price taking firms and monopolistic competition consider the situation of a firm producing in germany and selling an important part of its total output in the us obviously its profitability may be seriously compromised by an unexpected appreciation of the dm relatively to the the company can react to this uncertainty in two ways either it can assume that the conditions of the modigliani miller theorem are approximately fulfilled and that it best serves the interests of its shareholders by behaving in a risk neutral fashion alternatively the firm may for a variety of reasons behave as a risk averter itself and try to obtain some coverage against exchange rate risk when looking at the amount of insurance taken up by companies on conventional insurance markets one gets the impression that the latter alternative risk averse firms is for many practical cases a realistic assumption the activities of many companies are more easily understood if one admits that they exhibit a certain degree of risk aversion if one accepts this one may go on to ask just how companies should go about insuring themselves against unexpected exchange rate fluctuations more specifically one has to study how much exchange risk the firms should insure against and which exchange rates are of relevance in the example above of a german company selling in the us the answer might at first sight seem obvious the company should obtain coverage against dm fluctuations for an amount approximately equal to its anticipated revenues on brief reflection it immediately appears that this is surely an excessively simplistic answer first the amount of coverage required must be affected by the question of how the price of the product varies when the dm exchange rate shifts second it may be the case that the german company s main competitors are located in say france in this case fluctuations of the

exchange rate exposure hedging and the use of foreign currency derivatives abstract we examine whether firms use foreign currency derivatives for hedging or for speculative purposes using a sample of s p 500 nonfinancial firms for 1993 we find evidence that firms use currency derivatives for hedging as their use significantly reduces the exchange rate exposure firms face we also find that while the decision to use derivatives depends on exposure factors i e foreign sales and foreign trade and on variables largely associated with theories of optimal hedging i e size and r d expenditures the level of derivatives used depends only on a firm s exposure through foreign sales and trade

the relationship between investment and large exchange rate depreciations in dollarized economies abstract we use a simple financial friction in an economy with high degree of liability dollarization and currency mismatch to show that the negative balance sheet effect of an exchange rate depreciation may be observable only if the magnitude of the depreciation is large enough this result justifies the difficulty to find strong empirical evidence for balance sheet effects and suggests the convenience of including a large depreciation term in empirical analyses we review some of the related empirical literature and provide some new evidence of this large depreciation effect

international migration self selection and the distribution of wages evidence from mexico and the united states we use the 1990 and 2000 mexican and u s population censuses to test borjas s negative selection hypothesis that the less skilled are those most likely to migrate from countries with high skill premia earnings inequality to countries with low skill premia earnings inequality we find that mexican immigrants in the united states are more educated than nonmigrants in mexico and were mexican immigrants to be paid according to current skill prices in mexico they would be concentrated in the middle of mexico s wage distribution these results are inconsistent with the negative selection hypothesis and instead suggest that there is intermediate selection of immigrants from mexico

exchange rates and prices the adjustment of relative prices to exchange rate movements is explained in an industrial organization approach given labor costs in the respective currencies exchange rate movements change costs for firms selling in the home market and thus disturb the industry equilibrium the extent of absolute and relative price adjustment is shown to depend on market integration product substitutability the relative number of domestic and foreign firms and the market structure the impact of exchange rates on prices is illustrated in a variety of approaches including the cournot a dixit and j stiglitz 1977 and s salop 1979 models some empirical evidence is offered in support of the theory copyright 1987 by american economic association

international comparisons of pricing to market behavior this paper measures the degree of price discrimination across export destinations that is associated with exchange rate changes using u s u k german and japanese industry level data given the industries sampled more price discrimination across destinations is observed in the u k german and japanese data for industries that match across source countries however behavior is very similar across source countries furthermore destination specific price adjustment on exports to the united states from germany and japan is similar to price adjustment observed on shipments to other destinations most variation in the data appears to be related to industry copyright 1993 by american economic association