different paths to free trade the gains from regionalism we compare free trade reached through expanding regional trading blocs to free trade accomplished by multilateral negotiation with sunk costs the outcomes are different trade in an imperfectly competitive good flows disproportionately more between the original members of a regional agreement even after free trade is reached they secure a higher welfare level from regionalism than from free trade achieved multilaterally nonmembers however reach a lower welfare level a surprising result is that world welfare during free trade is greater when it is achieved by the regional path we conclude with some empirical evidence from the european union that is consistent with the model

the export effect of immigration into the usa much has been written on the connection between migration and international trade human history provides important examples of migrations leading to increased trade activity with perhaps the most well known example of the overseas chinese this study investigates the trade related importance of chinese and other immigrants into the usa previous studies may have underestimated or overestimated the relationship between trade and migration with nations treated as featureless plains rather than as varied landscapes this study contends that an understanding of the immigration trade relationship can be improved upon by examining the specific pattern and destination of immigration into specific us states using state level export data to 28 immigrant source countries in 1993 a strong immigration trade link is found reinforcing conclusions made by previous research using country level data the compelling connection between immigration and trade found in this study and others suggests that future change

free trade agreements in the americas are the trade effects larger than anticipated this paper argues that the competitive liberalisation of national governments of the past several decades reflects national governments expectations of larger trade impacts from regional economic integration agreements eias than typical ex ante economic models have suggested moreover we show that previous typically cross section ex post empirical evaluations of the effects of eias on trade have seriously over or underestimated the effects partly due to ignoring the endogenous self selection bias of country pairs into eias accounting for this bias we find that economic integration agreements in the americas have had much larger impacts on trade over the period 1960 2000 than previously found and the ex post estimates are less fragile than those in earlier cross section analyses the results shed further light on understanding the causes and consequences of the growth of regionalism in the world

modeling charitable giving using a box cox standard tobit model there is a large literature investigating the determinants of charitable giving in particular price and income elasticities we find that many of the most often reported results from this literature rely on a model specification that is inappropriate when applied to recent federal tax file data we develop a standard tobit model with a box cox transformation parameter that nests a number of other specifications the box cox model yields estimates of price elasticities and expected charitable contributions that differ from those obtained using the typical specification additionally we find that the use of sample weights provides potentially important policy insights copyright 1991 by mit press

household composition income and food away from home expenditure in urban china abstract china has experienced dramatic economic growth and socio demographic changes in the last three decades including rapid urbanization and an aging society in the coming decades this paper analyses food away from home fafh consumption in urban china with respect to household composition income and other socio economic variables the data are from household surveys in six chinese cities i e beijing nanjing chengdu xi an shenyang and xiamen collected by the authors findings indicate that both household composition and income have significant effects on fafh participation and expenditures projections based upon our results suggest that fafh expenditures in urban china will continue to increase through 2050 the leading contributor to increased fafh expenditure is china s strong income growth followed by the expected rapid urbanization the aging society however will have a negative influence on fafh consumption

competitive search equilibrium in this paper i construct an equilibrium for markets with frictions which is competitive in the sense that all agents are price takers and maximize utility subject to a set of market parameters i show that the equilibrium allocation is socially optimal i also show how the competitive search equilibrium can be achieved if employers with vacancies can advertise publicly the wages they pay

a rudimentary random matching model with divisible money and prices abstract we consider a version of kiyotaki and wright s monetary search model in which agents can hold arbitrary amounts of divisible money a continuum of stationary equilibria indexed by the aggregate real money stock exists with all trading occurring at a single price there is always a maximum level of the real money stock consistent with existence of such an equilibrium in the limit as trading becomes faster relative to discounting any real money stock becomes feasible in such an equilibrium in contrast to the original kiyotaki wright model higher equilibrium real money stocks unambiguously correspond to higher welfare in this costless production environment journal of economic literature classification numbers d51 e40

ethnic minorities and trade the soviet union as a natural experiment this paper examines the role of ethnic minorities in bilateral trade between countries of the ex soviet union we argue that both forced re settlement of entire ethnic groups during the stalin era and artificially drawn borders in central asia led to an exogenous ethnic composition within countries using data collected by ethnologists on the share of ethnic groups across countries we build an index of bilateral ethnic networks and estimate its effect on trade using a gravity model while ethnic networks do not seem to have played a role in inter republic trade during the soviet union we find a positive and significant effect of ethnic networks on trade in the years following the collapse of the soviet union this effect however eroded steadily from the early 2000s less

are preferential trading arrangements trade liberalizing or protectionist preferential trade arrangements and especially free trade agreements have mushroomed in importance in the 1990s this has revived research on the effects of these arrangements both on the welfare of the member countries and those excluded and on the momentum for further liberalization of the open multilateral trading system this paper reviews the analyses and evidence to date as to these effects showing that analytically anything can happen and that to date there has been insufficient experience to draw conclusions from empirical evidence

an empirical demand and supply model of multilateral trade t his study develops an empirical model for the joint determination of the demand and supply for bilateral trade in which both bilateral quantities and bilateral prices are endogenous in theory each bilateral demand supply equation would contain income output variables together with all relevant bilateral prices given differences in the commodity composition of trade and given price discrimination export prices of any country will differ over destination countries in addition transport costs and tariffs will drive a wedge between bilateral export and import prices thus a bilateral demand and supply system for aggregate trade among n countries would require consideration of 2n2 price variables an overwhelming task for empirical research as a compromise between pure theory and practice we use a two tier construction in which total import demand and export supply are determined by aggregate real income output and relative aggregate prices and then bilateral trade flows are determined by theory based allocations featuring relative bilateral prices this approach is more general than either specifying only bilateral demand behavior assuming infinitely elastic supply at given prices or including the supply side through stringent assumptions such as constant market shares for empirical application the model is extended to include proxies for nonprice competition and structural factors a flowadjustment specification of dynamics and a trend cycle decomposition of income output the model is estimated from a panel of bilateral trade flows covering the united states japan france germany and united kingdom for the years 1958 1974 the theoretical model is developed in section ii the empirical specification is presented in section iii and the empirical results are discussed in section iv

a double hurdle model of irish household expenditure on prepared meals in this paper irish households expenditure on prepared meals for home consumption is analysed using the 1987 and 1994 irish household budget survey datasets the aim of the paper is to analyse the factors influencing irish households decisions to purchase prepared meals and how much to spend on these food items this is done using the double hurdle methodology adjusted for the problems of heteroscedasticity and non normality income elasticities are estimated for household expenditure on prepared meals in both years and significant socioeconomic influences are identified these socioeconomic factors are assumed to underpin the tastes and preferences of irish households with convenience identified as a significant preference of many household groups

estimating a brand level demand system for american cheese products to evaluate unilateral and coordinated market power strategies the advantage of this method compared to baker and bresnahan p 432 is that it does not constrain the conduct of the manager in their analysis they assume that the manager proportionally varies the quantity of each brand market shares remain constant once one has the unilateral total and fully collusive elasticities one can analyze the this paper was presented at the assa winter meetings atlanta ga january 2002 papers in these sessions are not subjected to the journal s standard refereeing process ronald w cotterill is professor of agricultural economics at the university of connecticut department of agricultural and resource economics he is currently director of the food marketing policy center and editor of agribusiness an international journal pierre o samson completed a master of science degree in agricultural economics at the university of connecticut in 2000

regional trade agreements and the pattern of trade a networks approach this paper uses a complex network approach for the analysis trade effects from regional trade agreements on world trade flows we use bilateral trade data to compute the network community structure for every year between 1970 and 2000 we compare this to null community structures that emerge from various models based on regional and geographical classifications the implementation of rta s and gravity models of trade our results show that rta formation appears to have a cyclical pattern on the world trade network community structure we document periods where bilateral trade flows and the structure of the world trade network are consistent with those predicted by formation of rtas these cycles occur in 1980 86 and 1990 96 at the same time we document periods in which the pattern in the world trade network is not explained by rta formation two periods 1986 90 and 1997 2000 show a pattern of bilateral trade flows that moves away from the prediction that results from assuming rta formation as the driving force in the determination of the world trade network structure factors contributing to the latter parts of the cycle during our sample period include formation of regional trade networks in east asia that account for a significant portion of world trade but are not formalised by rtas in force

a search theoretic approach to monetary economics the essential function of money is its role as a medium of exchange the authors formalize this idea using a search theoretic equilibrium model of the exchange process that captures the double coincidence of wants problem with pure barter one advantage of the framework described here is that it is very tractable the authors also show that the model can be used to addre ss some substantive issues in monetary economics including the potenti al welfare enhancing role of money the interaction between specializat ion and monetary exchange and the possibility of equilibria with multip le fiat currencies copyright 1993 by american economic association

are trade preferences more effective than aid in supporting exports evidence from the everything but arms preference scheme this study examines the effect of the everything but arms eba trade preferences regime on exports from african caribbean and pacific countries acp to the european union eu with this aim an augmented gravity model is estimated for exports from the 79 acp countries to the eu 15 for the time period 1995 to 2005 using panel data techniques the model estimates are used to quantify the effect of the eba preferences on the acp ldcs export performance and to compare it with the impact of official development assistance in addition to their separate effects the combined impact of eba and aid flows is examined the main results do not confirm a positive effect of the eba regime on exports otherwise the combined effect of eba and aid on exports is positive supporting an eu development strategy that includes both sorts of assistance aid and trade preferences

fifty years of trade policy the policy lessons f ive major lessons for successful global trade management defined as steady reductions in barriers and maintenance of an effective rules based system emerge from the first fifty years of the gatt wto they need to be applied to the present situation to set the stage for another half century of successful multilateral trade cooperation i will summarise the key headings at the outset and then elaborate each concluding with proposals for the wto agenda for the early part of the twenty first century

exports inflation and growth abstract this article seeks to identify some of the main determinants of exports and economic growth in cross sectional data from the world bank covering 160 countries for 1985 94 first the linkages between the propensity to export and population per capita income agriculture primary exports and inflation are studied by statistical methods then the relationship between economic growth and some of the above mentioned determinants of exports as well as investment are scrutinized the same way the main conclusion is that in the period under review high inflation and an abundance of natural resources tended to be associated with low exports and slow growth

equilibrium using credit or money with indivisible goods this note studies the trade of indivisible goods using credit or money in a frictional market we show how indivisibility matters for monetary equilibrium under different assumptions about price determination bargaining generates a price and allocation that are independent of the nominal interest or inflation rate over some range this is not the case with price posting and directed search in either case we provide conditions the nominal rate cannot be too high under which stationary monetary equilibrium exists and we show it is unique or generically unique

in search of optimised regional trade agreements and applications to east asia we quantitatively analyse the trade effects of enhanced trade facilitation with extended gravity equations our findings confirm that rtas comprised of countries equipped with better trade facilitation are more likely to be trade creating less likely to be trade diverting and are thus more likely to lead the world economy toward global free trade we also find that i the traditional gains from shallow integration through eliminating tariff barriers will be greater for south south rtas in east asia such as an asean china rta provided that the tariff reducing schedule is strictly fulfilled ii the gains from deeper integration through enhancing trade facilitation will be greater for north north rtas in east asia such as a japan korea rta and iii the gains from a combined trade liberalisation strategy through tariff reductions and enhanced trade facilitation will be greater for north south rtas in east asia such as a china korea and an asean 3 rta

inflation output and welfare this paper studies the effects of anticipated inflation on aggregate output and welfare within a search theoretic framework we allow money holders to choose the intensities with which they search for trading partners so inflation affects the frequency of trade as well as the quantity of output produced in each trade we consider the standard pricing mechanism for search models i e ex post bargaining as well as a notion of competitive pricing if prices are bargained over the equilibrium is generically inefficient and an increase in inflation reduces buyers search intensities output and welfare if prices are posted and buyers can direct their search search intensities are increasing with inflation for low inflation rates and decreasing for high inflation rates the friedman rule achieves the first best allocation and inflation always reduces welfare even though it can have a positive effect on output for low inflation rates

a divisible search model of fiat money this paper extends the kiyotaki wright search model of fiat money to allow for divisible money and goods the extension allows me to examine the standard issues in monetary economics such as the neutrality and superneutrality of money by severing the artificial link in the kiyotaki wright model between the money supply and the number of money holders it is shown that money is neutral but not superneutral money growth generates a trading opportunity effect it changes the fraction of different agents in the economy and hence changes the probability with which agents have a successful match in addition money growth has a negative effect on the real money balance that is familiar in walrasian monetary models the balance of the two effects can imply a positive optimal money growth rate

search bargaining money and prices the goal of this paper is to extend existing search theoretic models of fiat money which until now have assumed that the price level is exogenous by explicitly incorporating bilateral bargaining this allows us to determine the price level endogenously and leads to additional insights concerning the role of money for example we find that monetary equilibria are generally inefficient in the sense that output and prices differ from the solution to a social planner s problem although the difference can become small as the discount rate or search friction vanishes we also find that there exist nonstationary inflationary equilibria

household consumption of cheese an inverse hyperbolic sine double hurdle model with dependent errors the dependent double hurdle model is generalized by an inverse hyperbolic sine transformation of the dependent variable the resulting specification features a flexible parameterization accommodates heteroskedastic errors and nests a range of common limited dependent variable models results for u s household cheese consumption suggest that the homoskedastic and normal double hurdle model is misspecified income elasticities are small and vary across household groups foodstamp recipients are more responsive to income changes than nonrecipients foodstamp recipients are also less likely to consume cheese but conditional on consumption spend more than nonrecipients

a model of money with multilateral matching we develop a model of decentralized monetary exchange to examine the distributional effects of inflation across heterogeneous agents the agents have private information about their productivity preferences or money holdings matching is multilateral and each seller is visited by a stochastic number of buyers the good is allocated according to a second price auction in money in equilibrium homogeneous buyers hold different amounts of money leading to price dispersion we find the closed form solution for the distribution of money holdings entry of sellers is suboptimal except at the friedman rule inflation acts as a regressive tax

gravity models a reformulation and an application to discriminatory trade arrangements gravity models are used to estimate trade flows from 162 countries into 11 major importing countries for 1976 counting the ec as one the main theories underlying gravity models are reviewed and a new gravity model is derived from a linear expenditure system a major innovation of this model is that both tariffs and dummy variables for discriminatory arrangements are incorporated price variables are also explicitly included in the model the tariff and the dummy variables are found to be statistically significant and this indicates that previous gravity model studies which used dummies to estimate the trade benefits of preferential tariffs may not have accurately estimated the effects of the preferences the price variables generally are also found to be statistically significant which casts doubt on the homogeneous goods assumption underlying the purchasing power parity hypothesis some significant differences in the estimates were found when separate equations were regressed for the eec and the us

insecurity and the pattern of trade an empirical investigation corruption and imperfect contract enforcement dramatically reduce international trade this paper estimates the reduction using a structural model of import demand in which insecurity acts as a hidden tax on trade we find that inadequate institutions constrain trade as much as tariffs do we also find that omission of indices of institutional quality biases the estimates of typical gravity models obscuring a negative relationship between per capita income and the share of total expenditure devoted to traded goods finally we argue that cross country variation in the effectiveness of institutions and the consequent variation in the prices of traded goods offer a simple explanation for the stylized fact that high income capital abundant countries trade disproportionately with each other

payments for ecosystem services programs predicting landowner enrollment and opportunity cost using a beta binomial model this paper concerns predicting enrollment in payment for ecosystem services pes programs to promote habitat preservation on private lands we develop a beta binomial model to address both program participation and the amount of land enrolled by each potential enrollee we apply the estimation approach to stated preference data from non industrial private forest owners in finland as an alternative econometric model we also develop a multivariate censored regression model of enrollments using cross validation we find that the beta binomial model predicts at least as well as the multivariate censored model yet has fewer parameters using our estimation results we demonstrate policy predictions regarding program enrollment and landowner opportunity cost

working wives and food away from home the box cox double hurdle model household expenditures on food away from home are analyzed with the use of the bls 1989 consumer expenditure survey parameterization and distributional assumptions of cragg s double hurdle model are generalized for this purpose and the resulting model outperforms the more traditional ones results suggest households with working wives and those with higher income are more likely to consume food away from home and also to consume more than others wife s age and household size increase the conditional level of consumption education has conflicting effects on probability and conditional level of consumption

money in search equilibrium in competitive equilibrium and in competitive search equilibrium we compare three market structures for monetary economies bargaining search equilibrium price taking competitive equilibrium and price posting competitive search equilibrium we also extend work on the microfoundations of money by allowing a general matching technology and entry we study how equilibrium and the effects of policy depend on market structure under bargaining trade and entry are both inefficient and inflation implies first order welfare losses under price taking the friedman rule solves the first inefficiency but not the second and inflation may actually improve welfare under posting the friedman rule yields the first best and inflation implies second order welfare losses

on the multiplicity of monetary equilibria green zhou meets lagos wright abstract green and zhou relax the assumption made in early search based models of monetary exchange of indivisible money their paper and various extensions make much technical progress and derive some interesting substantive results in particular they show there is an indeterminacy of steady state monetary equilibria we reconsider this result in the framework of lagos and wright which is more tractable we show that a similar multiplicity arises and is much easier to derive and understand we also compare the results to those in related nonmonetary models and discuss how they depend on details including the number of agents and the timing

aid and trade a donor s perspective abstract one reason donors provide foreign aid is to support their exports to aid recipient countries time series data for germany suggests an average return of between us 1 04 1 50 for each us dollar of aid spent by germany although this is well below previous estimates the value is robust to different specifications and econometric approaches interestingly we find strong evidence of crowding out between bilateral donors in the sense that bilateral aid from other eu members significantly reduces exports from germany to the recipients the evidence suggests that in the long run aid causes exports and not vice versa we discuss the implications these findings might have for aid volumes and allocation

the wto trade effect this paper reexamines the gatt wto membership efiect on bilateral trade ows using nonparametric methods including pair matching permutation tests and a rosenbaum 2002 sensitivity analysis together these methods provide an estimation framework that is robust to misspeciflcation biases allows general forms of heterogeneous treatment efiects and addresses potential hidden selection biases this is in contrast to most conventional parametric studies on this issue our results suggest large gatt wto trade promoting efiects robust to various restricted matching criteria alternative indicators for gatt wto involvement different matching methodologies non random incidence of positive trade ows and inclusion of multilateral resistance terms

asian growth and trade poles india china and east and southeast asia summary using a global general equilibrium trade model this study analyzes the impact on developing countries of 1 the dramatic expansion of trade by india china and an integrated east and southeast e se asia trade bloc and 2 productivity growth in the region china is an integral member of the e se asia bloc with strong links through value chains and trade in intermediate inputs while india is not a part of any trade bloc the analyses consider the importance of their different degrees of integration into regional and global economies focusing on potential complementarities and competition with other developing countries

at home consumption of cheese a purchase infrequency model for many commodities zero purchases are recorded in household budget surveys even though positive consumption occurs this may reflect a survey period that is shorter than the purchase cycle the present study estimates a purchase infrequency model for cheese using the 1987 bls consumer expenditure survey appropriateness of the tobit specification is examined along with the assumption of independence of the two stage expenditure decision process applied consumption analyses often use household budget surveys with little concern as to survey period length relative to the length over which consumption can occur many of these analyses use the tobit model to account for censoring associated with use of this type of model are underlying assumptions that first the same stochastic process affects both purchase decisions and consumption levels and second a zero value of the dependent variable represents a true comer solution however when the commodity in question has a purchase cycle longer than the survey period length a zero expenditure level may not correspond to zero consumption and the tobit specification may be inappropriate blundell and meghir p 197 as a commodity cheese may exhibit characteristics precluding use of a tobit demand model for many cheese varieties consumption may occur many weeks after purchase as evidence the 1972 and 1987 consumer expenditure surveys report that 48 and 42 of surveyed households respectively had purchased cheese over a one week survey period in contrast the 1977 usda household food consumption survey indicates over 75 of surveyed households had consumed cheese at home over a one week period this large difference

bidding for money we analyze monetary exchange in a model that allows for directed search and multilateral matches we consider environments with divisible goods and indivisible money and compare the results with those in models that use random matching and bilateral bargaining two different pricing mechanisms are used ex ante price posting and ex post bidding auctions also we consider settings both with and without lotteries we find that the model generates very simple and intuitive equilibrium allocations that are similar to those with random matching and bargaining but with different comparative static and welfare properties

on money as a medium of exchange we analyze economies in which individuals specialize in consumption and production and meet randomly over time in a way that implies that trade must be bilateral and quid pro quo nash equilibria in trading strategies are characterized certain goods emerge endogenously as media of exchange or commodity money depending both on their intrinsic properties and on extrinsic beliefs there are also equilibria with genuine fiat currency circulating as the general medium of exchange we find that equilibria are not generally pareto optimal and that introducing fiat currency into a commodity money economy may unambiguously improve welfare velocity acceptability and liquidity are discussed

new bilateralism in the asia pacific this paper reviews recent changes in the geographic pattern of regional trading agreements rtas focusing on examples from the asia pacific area the general pattern is one of new bilateral agreements combined with a trend towards continentalism the new trend towards bilateralism can be explained largely by a fear of countries being excluded from their major markets as other countries secure preferential and superior access to these markets this pattern is creating many intersections between rtas with consequential multi tiered preferences and multiple systems of trade rules viewed dynamically however this pattern may have positive effects on world trade it mitigates the effects of large continental rtas and may lead to coalescence or enlargement of rtas the paper reviews models which ask the important question as to whether this process will progress all the way to free trade for the world economy

a box cox double hurdle model of wildlife valuation the citizen s perspective abstract a stated preference approach is used to elicit the attitudes of the general public towards coyote conservation the payment vehicle is presented in a way that explicitly prompts respondents to adopt a citizen perspective rather than a consumer perspective when responding to the survey to deal with the large numbers of zero responses a box cox double hurdle specification is used to model separately individuals choices about whether to support conservation or not and their choice about the level of support the results show that simpler analyses that do not account explicitly for these two different decisions would lead to misleading conclusions in the study of nuisance wildlife the study uses primary data from prince edward island canada

coupon redemption and its effect on household cheese purchases by endogenizing unit value and coupon redemption we estimate u s household cheese purchase quality choice and coupon redemption equations simultaneously zero purchases and missing values on coupons and unit values are taken into account in the model to correct for selectivity bias correlations among the three equations are found to be significant empirical findings show that high quality choice significantly decreases cheese purchases while cheese coupon usage significantly increases purchases we find that higher income households select higher quality cheese while larger households choose lower quality cheese for coupon redemption we find that african american and hispanic households redeem less while asian households have no significant difference compared to caucasian households

a gravity based multidimensional scaling model for deriving spatial structures underlying consumer preference choice judgments in multidimensional unfolding multidimensional scaling mds procedures the predicted utility of a brand for a consumer is inversely related to the distance between that consumer s ideal point and the brand position in the derived space most mds models treat all brands the same regardless of their respective market share in many product categories however consumer preferences are heavily influenced by the size of the existing market share i e the brand mass this article presents two versions of a new spatial methodology that incorporates the effects of brand as well as consumer mass via a spatial gravity model of consumer utility that is the attraction of a brand for a consumer depends not only on the distance of the brand from a consumer s ideal point but also on the current market size of the brand as well as the consumer purchase pattern and volume one version of the proposed model estimates brand positions and individual ideal points with two way or three way pick any n binary choice data the second version we develop provides the same spatial decomposition for two way or three way metric preference dominance data we also develop a series of nested mds models to estimate test and compare four different model structures with respect to any common data set we illustrate the proposed methodology using an actual commercial application involving physician prescription behavior and examine competing model fits

deeper integration in east asia regional institutions and the international economic system sea change in east asian perceptions of the international economic system is causing a determined thrust toward deeper east asian integration through regional financial and trade institutions the financial crisis of 1997 98 contributed to this change by revealing weaknesses in the international financial architecture at the same time that it bared weaknesses in domestic policies and institutions in east asia many east asians felt the existing international financial system failed to provide them with adequate prescriptions or aid at a time of great need in response governments are intensifying regional policy cooperation and have begun to develop regional institutional capacity to head off future financial crises and manage them if they occur this change in perceptions of the international economic system has been reinforced by paralysis in the world trade organisation wto the failure of governments to launch a new round of multilateral trade negotiations at the november 1999 wto ministerial meeting in seattle is helping to propel regional approaches to trade liberalisation deeper integration in east asia is a potentially substantial development which will influence the future shape of the international economic system in section 2 i review the primary factors contributing to the financial crisis and discuss the implications for policy makers in east asia in a context of diminished confidence in global institutions the emphasis is on macroeconomic policy management structural reforms changing incentive systems overhauling crisis

trade benefits under the eec generalized system of preferences the purpose of the paper is to test for the existence of a statistically significant effect of the eec generalized system of preferences on actual trade flows between developing countries and the eec using a gravity type model we estimate the gross trade creation effect of the eec generalized system of preferences on the eec imports from 10 major developing countries estimation on a yearly basis for the period 1967 1978 indicates the presence of a statistically significant effect it would appear that gross trade creation amounted to about s2 billion for these 10 countries in 1978 in addition to these calculations the paper reviews the eec generalized system of preferences in detail and offers comments on its future impact on exports from developing countries

do the poor pay more for food evidence from the united kingdom does food cost more for low income households this paper compares two well known approaches to answering this question i find that quantity discounts for a broad range of foods are statistically significant and economically important however quantity discounting does not lead to the poor paying more for food i find that the poor pay less than average for the food they purchase this is explained by the poor spending a greater share of their income on foods where quantity discounting occurs copyright 2010 oxford university press

a generalized design for bilateral trade flow models abstract this paper suggests a full interaction effects design to analyze bilateral trade flows this is illustrated with an unbalanced panel of bilateral trade between the triad eu15 usa and japan economies and their 57 most important trading partners over the period 1986 1997 our full interaction model finds empirical support for the new trade theory and linder s hypothesis we show that the omission of one or more interaction effects can result in biased estimates and misleading inference

the effect of household wealth on the adoption of improved maize varieties in zambia abstract production and price risks that could render input use unprofitable sometimes prevent rural households from benefiting from input technological change the household s ability to cope with such risks and hence benefit from input technological change is often positively related to its wealth or stock of productive assets empirical evidence however suggests a non linear relationship between wealth and adoption of new agricultural technologies so that within a rural community households on the lower wealth continuum behave differently from those on the higher level using farm level data collected from 300 randomly selected households in three districts of zambia in 2004 2005 crop season this paper first stratifies households into poorly and well endowed households based on their access to productive assets and estimates separate double hurdle models for the adoption of improved high yielding maize ihym varieties for each group the results show that factors influencing the adoption and use intensity of ihym varieties differ between the two groups this draws attention to the need for recommending wealth group specific interventions to increase the adoption and use intensity of such varieties and their subsequent impacts on food security and general livelihoods of the households the explicit testing for the possibility that differences in household wealth affect the way in which other variables influence adoption decisions is the paper s unique contribution to the adoption literature

intra industry trade and industry distribution of productivity a cournot ricardo approach this paper constructs a cournot ricardo model of trade by incorporating cournot competition in a ricardian trade model in this model the share of intra industry trade in bilateral trade volume decreases as trading partners become more different in terms of the industry distribution of labor productivity we show that this relationship is a special case of a more general relationship the share of intraindustry is decreasing in a specialization index this specialization index turns out to be equal to the difference in the industry distribution of productivity in the case of our cournot ricardo model while it is given by the difference in capital labor in the well known case of monopolistic competition as both technologies and factor endowments would be important in shaping specialization patterns in the real world we conjecture that the share of intra industry trade is decreasing in two measures of specialization the difference in the industry distribution of productivity and the difference in capital ratio our ols estimations strongly support this conjecture in fixed effects regressions both measures lose significance in the entire sample but the industry distribution of productivity is significant in explaining trade between high income countries

asset liquidity and indivisibility abstract we study asset liquidity in a search theoretic framework where divisible assets can facilitate exchange for an indivisible consumption good the distinctive characteristics of our theory are that the asset dividend can be either positive or negative and buyers can choose whether or not to carry the asset and trade for the indivisible good buyers participation determines the demand for asset liquidity thus the asset price carries a liquidity premium component which reflects the function of the asset in facilitating trade the economy features multiple equilibria when the asset dividend is negative due to the trade off between the probability of trade and the endogenous cost of holding assets

exports from a remote developed region analysed by an inverse hyperbolic sine transformation of the gravity model picture a small open economy alone in the middle of the atlantic ocean and highly dependent on trade with nafta and the eu how important are these trading blocs to the country s exports how significant is the country s isolation and small size and how do these affect the export sectors typically the export volume is significantly impacted by the economic size of the exporting country but in this case it is not this suggests that the exports from small remote economies are driven by different factors than exports from large economies the data are analysed using a unique transformation of the gravity model by an inverse hyperbolic sine function allowing for accountancy of scattered exports

competitive pricing and efficiency in search equilibrium we consolidate and generalize some results on price determination and efficiency in search equilibrium extending models by rubinstein and wolinsky and by gale heterogeneous buyers and sellers meet according to a general matching technology and prices are determined by a general bargaining condition when the discount rate r and search costs converge to 0 we show that prices in all exchanges are the same and equal the competitive market clearing price given positive search costs efficiency obtains iff bargaining satisfies hosios condition and r 0 when prices are set by third party market makers however we show that search equilibrium is necessarily efficient

the demand for alcoholic beverages in spain the objective of this study is to analyze the main determinants of alcoholic beverages consumption at home data comes from the latest spanish household national survey which provides information on expenditure and quantities of different food products by household because households are interviewed only 1 week a large number of zeros have been recorded among the existing censured demand models the double hurdle dh model the purchase infrequency model and the tobit purchase infrequency model among others and after carrying out model selection tests the dh model has been finally estimated all expenditure elasticities are positive corresponding the highest value to spirits own price elasticities are negative and also in this case the spirits exhibit the highest value socio economic variables also play an important role in explaining consumer purchase and consumption decisions

a unified framework for monetary theory and policy analysis search theoretic models of monetary exchange are based on explicit descriptions of the frictions that make money essential however tractable versions of these models typically make strong assumptions that render them ill suited for monetary policy analysis we propose a new framework based on explicit micro foundations within which macro policy can be studied the framework is analytically tractable and easily quantifiable we calibrate the model to standard observations and use it to measure the cost of inflation we find that going from 10 percent to 0 percent inflation is worth between 3 and 5 percent of consumption much higher than previous estimates

bilateral trade flows the linder hypothesis and exchange risk bilateral trade flows are used to examine the linder hypothesis and the effect of exchange rate variability in a gra vity type trade model derived from an underlying demand and supply mo del a behavioral model is used to justify examining these issues joi ntly the model performs well empirically using a sample of seventeen countries for the period 1974 82 the authors find overwhelming supp ort for the linder hypothesis and this version of the gravity model moreover they find strong support for the hypothesis that increased exchange rate variability affects bilateral trade flows copyright 1987 by mit press

a double hurdle model of cigarette consumption this paper shows the importance of the double hurdle approach for modelling individuals cigarette consumption using data from the uk general household survey and argues that participation and consumption should be treated as separate individual choices the likelihood function for the full double hurdle is derived and it is shown how restrictions on the stochastic specification of the model and auxillary information which identifies ex smokers allow it to be decomposed the empirical results highlight the value of the sample separation information and the need to model starting and quitting as separate decisions

money and prices a model of search and bargaining abstract this paper makes commodities divisible and incorporates bargaining into the search theoretic model of money to determine the purchasing power of money or price it is shown that two monetary equilibria always coexist where fiat money is universally accepted the two equilibria differ in price output welfare and the velocity of money sunspot monetary equilibria exist in which money is universally accepted in all states of the economy multiplicity has novel implications on the effectiveness of currency substitution and exchange market intervention journal of economic literature classification numbers c78 e40

a generalized double hurdle model of swedish gambling expenditures this article estimates the relationship between demand for swedish gambling income and the other socioeconomic variables using empirical models of participation and gambling expenditure it also indirectly attempts to account for the effect of a recent recession on gambling behaviour by examining gambling behaviour when the economy was growing versus the period immediately after a major recession the aim of the article is to analyse the factors influencing gambling decisions this is done using the double hurdle method adjusted for the problems of heteroscedasticity and nonnormality using an approach that can handle extreme values and address skewness the empirical results ruled out tobit type models and normally distributed double hurdle models the pattern on income elasticities across income classes implies that implicit swedish gaming taxes are regressive income elasticities become smaller after the recession and the decision to participate changed with respect to the several of the demographic va

a new suggestion for simplifying the theory of money we propose a new search theoretic model of monetary exchange with indivisible assets based on price posting instead of bargaining and incorporating noisy search this yields some familiar results plus a lot more the model admits multiple steady states due to the self referential nature of liquidity it admits cyclic chaotic and stochastic equilibria and compared to bargaining versions the dynamics are more general and have better microfoundations it generates price dispersion with interesting efficiency implications plus sticky prices and rational inattention parametric examples yield closed form solutions based on these results we suggest this should become a benchmark model in monetary economics

self confirming price dispersion in monetary economies abstract in a monetary economy we show that price dispersion arises as an equilibrium outcome without the need for costly simultaneous search or any heterogeneity in preferences production costs or search technologies a distribution of money holdings among buyers makes sellers indifferent across a set of posted prices leading to a non degenerate price distribution this price distribution in turn makes buyers indifferent across a range of money balances rationalizing the non degenerate distribution of money holdings we completely characterize the distribution of posted prices and money holdings in any equilibrium equilibria with price dispersion admit higher maximum prices than observed in any single price equilibrium and feature an increasing density of prices in contrast to existing theories price dispersion reduces welfare by creating mismatch between posted prices and money balances inflation exacerbates this welfare loss by shifting the distribution towards higher prices

sovereign wealth funds cross border investments assessing the role of country level drivers and spatial competition abstract the aim of this paper is to identify the driving forces of cross border investments emanating from sovereign wealth funds and to test the existence of spatial competition among recipient countries for this we develop an original econometric framework that quantifies the role of spatial dependence in the location of investments and that uses a modified version of the standard estimation procedure of spatial panel model which accommodates the inverse hyperbolic sine transformation of the dependent variable this transformation copes with two critical features of net capital flows namely an highly skewed distribution and the presence of zero and negative values using a large scale database we provide evidence of negative spatial dependence investments in one country being on average at the expense of its neighbors

liquidity a new monetarist perspective this essay surveys the new monetarist approach to liquidity work in this literature strives for empirical and policy relevance plus rigorous foundations questions include what is liquidity is money essential in achieving desirable outcomes which objects can or should serve in this capacity when can asset prices differ from fundamentals what are the functions of commitment and collateral in credit markets how does money interact with credit and intermediation what can and should monetary policy do the research summarized emphasizes the micro structure of frictional transactions and studies how institutions like monetary exchange credit arrangements or intermediation facilitate the exchange process

on the impact of transportation costs on trade in a multilateral world this article proposes to account for the differences in the importance of transport costs depending on characteristics of trading partners in a multiregion model of trade in differentiated goods we expect a smaller impact of transport costs on a country s exports as a share of importer gross domestic product gdp the more less relatively capital abundant the exporter importer is and the lower higher production costs are as captured by gdp at given factor endowments and diversity all else equal empirically this requires four interaction terms in addition to the direct impact of transport costs when estimating log linear gravity models one with the exporter gdp per capita or capital labor ratio a second one with the importer gdp per capita or capital labor ratio and a third and fourth with exporter and importer gdp respectively the hypotheses are strongly supported by the evidence from a large panel of bilateral trade between 1970 and 2000

free trade areas in east asia discriminatory or non discriminatory ver the past decade we have witnessed the worldwide proliferation ofregional trade arrangements rtas even after the launch of the wtomultilateral trading system rtas have continued to spread however there havebeen marked variances across regions in terms of the degree to which regionaltrade integration has been carried out the east asian region is characterised bythe dearth of rtas regional integration moves have involved merely partial orloosely institutionalised groupings i e afta asean free trade area andapec asia paci c economic cooperation in particular the major three eastasian countries china japan and korea have tended to bypass the prevalenttrend of regionalism and instead have generally preferred multilateral trade liberal isation approaches under the gatt and wto regulations regarding rtas their stance against regionalism has mainly been for the following reasons i relative predominance of interregional trade and investment relations overintraregional transactions ii historical animosities stemming from the legaciesof japanese colonialism iii lack of central leadership and iv diversities inculture race language and level of economic development within the region in recent years however the region s support has shifted from multilateraltrade arrangements to rtas a turning point was the outbreak of the east asian nancial crisis in 1997 besides triggering massive economic unrest in east asia the crisis revitalised the demand for regional economic cooperation which calledfor more cooperation and policy coordination among neighbouring economies

a north american free trade agreement analytical issues and a computational assessment abstractthe following sections are included introductionissues in analyzing the economic impact of the naftathe computational modelcomputational resultsconclusionsstudy questionsreferencessuggested further reading this abstract was borrowed from another version of this item

incorporating nutrients into meat demand analysis using household budgets data the objective of this article is to analyze the spanish demand for meat taking into account the consumer s concern about the relationship between food diet and health this concern is forcing food demand analysts to assume that consumer utility is a function of nutrients instead of simply the food products themselves nevertheless these utility function arguments are not produced in the marketplace but rather at home as a consequence in this article household production theory is followed in order to analyze spanish demand for meat using the quarterly national expenditure survey for 1999 demands for several meat products the input in the model are derived from the translog cost function censored regression models are used in the estimation process since many zero responses are reported five broad categories eight nutrients and the most relevant socioeconomic variables are considered finally a set of elasticities is calculated with respect to all the variables included in the analysis

u s cigarette consumption the case of low income women we use double hurdle or cragg models to test whether decisions about smoking participation and consumption levels are separate endogenous choices we also estimate several dominance models which assume that standard corner solutions are not applicable a complete dominance model with independence between the participation and consumption decisions is the preferred specification for our data the most important variables influencing participation are region number of children education and ethnicity region age race ethnicity and health status most affected consumption levels

indivisibilities lotteries and monetary exchange we introduce lotteries randomized trading into search theoretic models of money in a model with indivisible goods and fiat money we show goods trade with probability 1 and money trades with probability where 1 iff buyers have sufficient bargaining power with divisible goods a nonrandom quantity q trades with probability 1 and again money trades with probability where 1 iff buyers have sufficient bargaining power moreover q never exceeds the efficient quantity not true without lotteries we consider several extensions designed to get commodities as well as money to trade with probability less than 1 and to illuminate the efficiency role of lotteries