optimal trade taxes for a large country with non atomistic firms abstract the conventional prescription for a country possessing market power in world markets is an import tariff or export tax typically a country will have a continuum of traders differentiated both by size and behavior optimal policy then involves a structure of trade taxes rather than a uniform tax or tariff with larger firms generally taxed at lower rates than smaller ones when policy is constrained to a uniform tax optimal policy depends both on the foreign demand or supply elasticity and the size distribution of firms the principles derived here are applied numerically to indonesia s exports of nutmeg

a mixed oligopoly in the presence of foreign private firms in this paper a mixed oligopoly model is considered in which a state owned public firm competes with both domestic and foreign private firms previous articles on mixed oligopoly did not include foreign private firms the effect on the equilibrium involves a lower price and a different allocation of production relative to the case when all private firms are domestically owned in addition issues such as the effects of an open door policy allowing foreign firms to enter and the effects of foreign acquisition of domestic firms are discussed

modelling money demand in germany in this paper an empirically stable money demand model for m3 in germany is presented the sample period 1975 94 includes german unification it is shown that this development has not substantially destabilized money demand parameter stability is extensively tested and not rejected applying encompassing tests this model encompasses two recent models but is not encompassed by them exogeneity of the explanatory variables is discussed and tested along the definitions given in engle hendry and richard 1983 there is evidence that inflation and long term interest rates are super exogenous with respect to the parameters of the demand for m3 model this result and the empirical long run money demand function presented in this paper may affect the applicability of the so called p star concept for german m3 1998 john wiley sons ltd

overdrafts and the demand for money this paper presents a stochastic analysis of the demand for interest bearing money such as now accounts when overdrafting is allowed at some penalty rate it is shown that the short run interest elasticity of money demand is probably large in absolute value and negative but in the long run this elasticity is much smaller or even positive it is also argued that current definitions of the monetary aggregates which exclude unused credit may spuriously generate instability of money demand an alternative definition of money stock is suggested and seems to be conceptually more satisfying copyright 1990 by american economic association

do state trading exporters distort trade abstract in this paper we analyse the trade distorting effects of state trading enterprises stes which exist in some exporting countries because of these potential effects several countries have raised the issue of state enterprises in the doha round negotiations in the wto the belief is that stes in certain developed countries have trade effects which are equivalent to an export subsidy stes also exist in developing countries though since the aim of government policy may differ from the developed country case the trade distortion may be equivalent to an export tax we present a theoretical model that is sufficiently general to allow us to consider the case of exporting stes in developed and developing economies the model is calibrated with data on two examples of stes one typical of an ste in a developed country the other typical of an ste in a developing economy in each case we allow for differences in the nature of the ste s pay off function the overall conclusion is that stes do distort trade and the trade distortion effect is potentially significant

does a cointegrating m2 demand relation really exist in the united states this paper reexamines evidence on m2 demand cointegration in the postwar united states equilibrium relations between m2 and various sets of its determinants are analyzed using quarterly observations from 1959 1 to 1988 4 1990 4 and 1993 4 based on three different testing methods for earlier subsamples mixed results are obtained suggesting both cointegration and no cointegration for the full sample however virtually no evidence supports cointegration accordingly a m2 error correction model is no longer appropriate to investigate short run dynamics of business fluctuations in the 1990s copyright 1996 by ohio state university press

the political economy of food pricing an extended empirical test of the interest group approach several recent studies have documented the magnitude and impact of distortions in food pricing however little attention has been paid to the nature of the political agendas that determine the levels of direct and indirect protection granted to producers and consumers this paper offers evidence that regardless of the degree of economic development the level of political pressure wielded by interest groups in food markets and hence the level of protection they receive is an inverse function of the relative size of their constituencies the results recommend the application of collective action concepts to the understanding of agricultural policies in countries which are at different stages of development

long run money demand revisited evidence from a non linear approach abstract in this paper we argue that employing the conventional linear cointegration approach in examining long run money demand may not be appropriate after taking into account the existence of transaction costs we provide evidence to show that deviations from equilibrium money demand follow an exponential smooth transition autoregressive process that is mean reverting outside a given range and has a unit root inside the range our findings also provide an alternative explanation for the failure of much of the existing literature to support a long run money demand function

the trade distorting effect of state trading enterprises in importing countries abstract this paper focuses on the potential trade distorting effect of state trading enterprises an issue that is likely to receive greater attention than hitherto in the context of the current agricultural negotiations in the wto although state trading enterprises can arise in both exporting and importing countries the emphasis here is on the importing country case our results show that state trading enterprises do distort trade though the nature of the distortion i e whether it is equivalent to an import tariff or import subsidy depends on the nature of exclusive rights bestowed by government on the state enterprise we also consider state trading enterprises in both developed and developing economies the main difference being the nature of the government s pay off function the theoretical framework allows us to derive the tariff equivalent effects for various types of stes the results suggesting that the trade distorting effect is likely to vary considerably dependent on the type of ste that arises in particular circumstances

economies of scale and market structure in international grain trade a large body of literature has examined international grain trade in imperfectly competitive models the article develops a two stage duopoly model that considers a private trader and a state trading enterprise ste competing on a foreign market the key difference between the private trader and the ste is their international organization while the ste makes use of external agents to export the private firm may choose to internalize international transactions the game is solved for different modes of competition and under both assumptions of homogeneous and differentiated products in order to assess how these assumptions affect the outcome of the game the results of the game are examined by using numerical examples the analysis shows that external shocks on export markets may result in a change of market structure and consequently of market shares these effects depend on the initial market structure furthermore the degree of product differentiation and the assumed mode of competition significantly affect the relative values of transaction and fixed costs at which the market structure changes

the trade and welfare effects of state trading in china with reference to cofco the use of state trading to manage imports and exports has been a long standing feature of china s agricultural trade regime while the use of state trading was modified by china s accession to the wto state trading still dominates for some commodities even though there have been recent attempts to diminish its importance in this paper we analyse the potential trade distorting effect of cofco on market access and export competition by drawing on some recent research on the impact of stes on agricultural trade by using a calibrated model of china s imports of wheat and exports of maize we are able to quantify the size of the trade distortions

assessing the distortionary impact of state trading in china state trading is a common feature in the management of imports and exports of agricultural products and it has been a long standing feature of china s agricultural trade regime while the use of state trading was modified by china s accession to the wto it remains a dominant feature for some commodities even though there have been recent attempts to diminish its importance in this article we review the role that the state trading enterprise ste china national cereals oils and foodstuffs import and export company cofco continues to play in the importing and exporting of some agricultural commodities we then review the economic theory that has been developed to measure the tariff equivalent of importing stes finally we apply that theory through a calibration exercise to measure the tariff equivalent of cofco in china s import market for wheat the distortionary impact of cofco depends on the bias in government policy toward agriculture the competitiveness of the domestic procurement market and also the number of firms that are allocated licenses to import alongside cofco

deregulation as welfare reducing trade reform the case of the australian wheat board state trading enterprises are distinguishable from private commercial firms by the nature of their exclusive rights and objectives deregulation of the australian wheat board is used to illustrate the effects of these rights and objectives on trade and welfare theoretical models are specified and the effects measured through calibrated partial equilibrium models it was found that the successive deregulations of the australian wheat board caused it to switch from being equivalent to an export subsidy to today being equivalent to an export tax at the same time deregulation has not necessarily been welfare enhancing

vertical coordination antitrust law and international trade this paper demonstrates that vertically aligned private or public organizations are capable of generating strategic trade advantage similar to that acquired through direct government export subsidization the model considers two forms of vertical coordination that lead to advantageous trade positions in international markets upstream vertical restraint and downstream equity sharing such practices are commonly employed both by state trading agencies and by private firms in nations with lenient antitrust laws the finding has important implications under new world trade organization wto rules intended to reduce government intervention in international transactions recent reforms in the wto favor nations that sanction highly refined vertical linkages between firms while nations with stringent antitrust legislation have an incentive to negotiate for greater harmonization of international laws

game theoretic models of mixed oligopoly abstract in this paper we review various models that have been proposed for the study of mixed oligopoly that is markets in which private and public firm compete on equal basis using only market instruments

mixed oligopoly privatization and strategic trade policy this paper investigates the effects of privatization in the presence of strategic trade policies within an international mixed oligopoly serving a single market if the government uses a domestic production subsidy then welfare is always increased with privatization while the optimal subsidy falls if the government uses an import tariff privatization increases welfare over much of the parameter space the optimal tariff however may rise or fall in recent years many countries around the world are privatizing their state owned industries at the same time many of these countries are also showing remarkable changes in their economic policies toward international trade on many occasions tariffs are significantly altered and domestic production subsidies are substantially reduced for example russia has privatized its aircraft industry and doubled its tariff on imported aircraft colombia has privatized its stateowned automobile maker colombia automotriz and reduced the import tariffs on foreign made cars in argentina the government is pursuing a policy of selective privatization and subsequent reduction of subsidies in western europe countries such as germany and spain have privatized their major airlines lufthansa and iberia respectively and significantly reduced subsidies what is the connection between privatization and strategic trade policies does privatization require a welfare maximizing government to alter trade barriers the objective of this paper is to answer these questions by investigating the interaction between privatization and strategic trade policies the effects of privatization are typically analyzed in the context of mixed oligopoly models where state owned welfare maximizing public firms interact with profit maximizing private firms 1 we investigate the interaction between privatization and strategic trade policies by incorporating strategic trade instruments in an international mixed oligopoly model specifically we consider two strategic trade instruments an import tariff and a domestic production subsidy the government chooses the optimal level of tariff or subsidy to maximize domestic welfare for each trade instrument we primarily focus on two questions first does privatization increase

multinationals and agricultural policy in the ec and usa abstract few multinationals have a considerable market share of grain and oilseed trade and processing industries in both the ec and usa the reform of agricultural policy is likely to affect their trading and processing activities the aim of the paper is to discuss to what extent current reform coincides with or diverge from their interests three main issues are considered what are the effects of ec and usa traditional policies on multinationals how multinationals behave as a consequences of those agricultural policies and how the present reform could affect companies and induce restructuring process

the value of the initial payment of the canadian wheat board as a signaling device this paper analyzes the role of the initial payment used by the canadian wheat board cwb in the determination of export prices and sales under the assumption that the cwb has better information about realized yields in canada than its us competitor in the separating equilibrium of the game the initial payment of the cwb is larger than the initial payment under complete information there exists an incentive under incomplete information to send a signal that realized yields are greater than expected to induce a reduction in the sales of foreign competitors we illustrate the strategic value of the initial payment for canadian wheat producers using a numerical simulation

trade policy issues and empirical analysis interest in u s trade policy has been stimulated in recent years by the massive american trade deficit by the belief that intervention by foreign governments in international markets has given other countries a competitive edge over the united states and by concern about the increase in protectionism among industrial countries in turn major analytical developments in international economics have revolutionized trade theory broadening its scope both by introducing in a more formal manner such concepts as imperfect competition increasing returns product differentiation and learning effects and by including the study of political and economic factors that shape trade policy decisions this collection of papers the result of a conference held by the nber applies these new trade theories to existing world cases and also presents complementary empirical studies that are grounded in more traditional trade theories the volume is divided into four parts the papers in part 1 consider the problem of imperfect competition empirically assessing the economic effect of various trade policies introduced in industries in which the new trade theory seems to apply those in part 2 isolate the effects of protection from the influences of the many economic changes that accompany actual periods of protection and also examine how the effects from exogenous changes in economic conditions vary with the form of protection part 3 provides new empirical evidence on the effect of foreign production by a country s firms on the home country s exports finally in part 4 two key bilateral issues are analyzed recent u s japanese trade tensions and the incident involving the threat of the imposition of countervailing duties by the united states on canadian softwood lumber

mixed oligopoly privatization and subsidization abstract this paper demonstrates three effects of domestic production subsidies in a mixed oligopoly industry regarding privatization and efficiency first if subsidies are used before and after privatization welfare is unchanged by privatization second if subsidies are used only before privatization then privatization always lowers welfare regardless of the number of private firms in the industry third the subsidy contributes to overall efficiency in a mixed oligopoly due to cost distribution effects

money demand function estimation by nonlinear cointegration conventionally the money demand function is estimated using a regression of the logarithm of money demand on either the interest rate or the logarithm of the interest rate this equation is presumed to be a cointegrating regression in this paper we aim to combine the logarithmic specification which models the liquidity trap better than a linear model with the assumption that the interest rate itself is an integrated process the proposed technique is robust to serial correlation in the errors for the usa our new technique results in larger coefficient estimates than previous research suggested and produces superior out of sample prediction copyright 2007 john wiley sons ltd

oil and democracy endogenous natural resources and the political resource curse by the end of the twentieth century a scholarly consensus emerged around the idea that oil fuels authoritarianism and slow growth the natural abundance once thought to be a blessing was unconditionally and then later only conditionally a curse for political and economic development we re examine the relationship between oil wealth and political regimes challenging the conventional wisdom that such natural resource rents lead to authoritarian outcomes we contend that most efforts to examine the causal linkages between natural resource abundance and political regime have been complicated by the likelihood that both democracy and oil revenue are endogenous to the industrialization processes itself particularly in its developmentalist form our quantitative results based on an analysis of global data from 1970 to 2006 show that both resource endogeneity and several mechanisms of intraregional regime diffusion are powerful determinants of democratic outcomes qualitative evidence from the history of industrialization in latin america yields support for our proposed causal claim oil wealth is not necessarily a curse and may even be a blessing with respect to democratic development