internal returns to scale as a source of comparative advantage the evidence during the past 15 years many trade theorists have incorporated scale economies and imperfect competition into their models this abandonment of perfect markets has profoundly changed the way that economists think about the determinants of trade flows and the effect of trade policies on performance below i selectively review the empirical evidence on both issues focusing on the role of increasing internal returns to scale iirs 1 to conserve space i refer the reader to the working paper version of this document tybout 1993 for more extensive references

nonparametric and parametric analysis of calorie consumption in tanzania abstract the empirical literature on the demand for calories in developing countries suggests mixed results regarding the role of income and other socioeconomic characteristics on calorie demand this study employs both nonparametric and parametric methods to examine the impact of household expenditure and other socioeconomic variables on household demand for calories in tanzania using recent survey data the parametric methods include estimation strategies that ensure consistent estimates in the presence of behavioral endogeneity and measurement error under each estimation strategy we employ we find a strongly significant and positive relationship between household expenditure and calorie demand lending support to conventional wisdom that income growth can alleviate inadequate calorie intake the results also show a negative and significant relationship between food prices and calorie demand suggesting that effectively targeted food subsidies for very poor households may play a role in improving their calorie intake

networking off madison avenue known for the key role that networking plays in the operation of agencies where interviews suggest that informal networking among close neighbors is critical to many agencies success networking involves the exchange of ideas and while there is no market place for these ideas exchanges may be more deliberate rather than just marshall s 1890 mysteries of the air type of information spillovers this paper examines the effect on productivity of having more near advertising agency neighborhoods and hence better opportunities for meetings and exchange within manhattan we will show that there is extremely rapid spatial decay in the benefits of having more near neighbors even in the close quarters of southern manhattan a finding that is new to the empirical literature and indicates our understanding of scale externalities is still very limited the finding indicates that having a high density of commercial establishments is important in enhancing local productivity an issue in lucas and rossi hansberg 2002 where within business district spatial decay of spillovers plays a key role we will argue also that in manhattan advertising agencies trade off the higher rent costs of being in bigger clusters nearer centers of action against the lower rent costs of operating on the fringes away from high concentrations of other agencies introducing the idea of trade offs immediately suggests heterogeneity is involved we will show that higher quality agencies are the ones willing to pay more rent to locate in greater size clusters specifically because they benefit more from networking while all 1 the research in this paper was conducted while the authors were census bureau research associates at the boston research data center research results and conclusions expressed are those of the authors and do not necessarily indicate concurrence by the census bureau the paper has been screened to ensure that no confidential data are revealed we acknowledge helpful comments from andrew foster on aspects of the paper and from participants in seminars at brown university lse and the university of toronto

the impact of maize price shocks on household food security panel evidence from tanzania abstract using three waves 2008 09 2010 11 2012 13 of the tanzanian national panel survey this study investigates the impact of maize price shocks on household food security between 2008 09 and 2012 13 calorie intake stagnated for urban households yet sharply deteriorated for rural households the latter was driven by a significant decline in the consumption of the major staple maize which showed strongest price hikes among all major food items fixed effects regressions indicate a clear negative relationship between maize prices and average household energy intake almost all population groups were found to be negatively affected by maize price shocks with rural landless households being the most vulnerable group in particular a 50 percent rise in maize prices decreases caloric intake for rural urban households on average by 4 4 5 4 percent and for rural landless households by 12 6 percent results further indicate that subsistence agriculture can act as an effective strategy to insure against food price volatility

the emergence of iran in the world car industry an estimation of its export potential in the past 10 years iran has been emerging as a major car producer in the world however due to delays in economic reforms iranian car exports have not increased as much as production this paper presents a first estimation of the iranian export potential in the car industry based on new theoretical developments of the gravity equation an empirical bilateral trade model is proposed it includes sectoral variables car production import tariffs as well as other original variables such as expectations and hysteresis we then develop a dataset which includes the 40 major car exporting countries in the world 34 importing countries a 10 year time period as well as four car production groups the model is then estimated by using alternative panel data estimators such as those of hausman and taylor and dynamic estimators as well as transformed variables estimators export potential is finally calculated from the residuals of the model results show that iranian current car exports are about 100 times less than their fitted values this indicates that there is a significant export potential for iran especially toward india china russia as well as smaller neighbours turkey pakistan central asian countries as a result iran could become the major auto supplier in the middle east however this requires the completion and success of ongoing economic reforms

cartoon planet worlds of production and global production networks in the animation industry as more animated films are produced new worlds of production have emerged the animation production system is distinct from film production relying on different technologies and labor skills its globalization therefore has taken place differently although both are structured by the global production networks of the media conglomerates we present a framework for understanding the animation industry its international division of labor and its diverse markets enabled by pools of artistic labor growing demand and the diffusion of production skills copyright 2010 the author 2009 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

creative cities creative spaces and urban policy the paper presents the results of an international study of creative industry policies and strategies based on a survey of public sector creative city initiatives and plans and their underlying rationales as well as this survey and an accompanying literature review interviews were carried out with senior policy makers and intermediaries from europe north america africa and south east asia the paper considers the scope and scale of so called new industrial clusters in local cultural and creative quarters and sub regional creative hubs which are the subject of policy interventions and public private investment the semantic and symbolic expansion of the cultural industries and their concentration in once declining urban and former industrial districts to the creative industries and now to the knowledge and experience economy is revealed in economic sectoral and spatial terms whilst policy convergence and emulation are evident manifested by the promotion of creative spaces and industry clusters

are chinese cities too small this paper models and estimates net urban agglomeration economies for cities economic models of cities postulate an inverted u shape of real income per worker against city employment where the inverted u shifts with industrial composition across the urban hierarchy of cities this relationship has never been estimated in part because of data requirements china has the necessary data and context we find that urban agglomeration benefits are high real incomes per worker rise sharply with increases in city size from a low level they level out nearer the peak and then decline very slowly past the peak we find that a large fraction of cities in china are undersized due to nationally imposed strong migration restrictions resulting in large income losses

testing for market power in multi product industries across multiple export markets a large body of theoretical literature has developed in the past 15 years incorporating various models of imperfect competition into international trade theory empirical work testing for imperfect competition in export markets however has been much more limited in particular the empirical evidence in support of widespread imperfect competition in u s export and import sectors is somewhat scant and mixed 2 one technique for assessing the existence of market power in export markets has been developed by knetter 33 who estimated a reduced form single equation in which the export price to a specific market for a good was a function of the exchange rate a country specific dummy variable and a time dummy knetter rejected the null hypothesis of perfectly competitive markets in nearly all of the u s and german export markets studied 3 his methodology has been adopted by other researchers who have rejected the perfect competition hypothesis in other u s export markets 4

scale economies and the volume of trade in this paper we split the number of actual years of schooling into five components effective years repeated years skipped years inefficient routing years and dropout years estimation of earnings equations using these explanatory variables produces some interesting empirical and theoretical results the main empirical finding is that the concepts of actual and effective years of schooling that are usually used in the estimation of earnings equations are statistically inferior to our classification both concepts pro

input subsidy programs in sub saharan africa a synthesis of recent evidence input subsidy programs have once again become a major plank of agricultural development strategies in africa ten african governments spend roughly us 1 billion annually on input subsidy programs isps amounting to 28 6 of their public expenditures on agriculture this article reviews the microlevel evidence on isps undertaken since the mid 2000s we examine the characteristics of subsidy beneficiaries crop response rates to fertilizer application and their influence on the performance of subsidy programs the impacts of subsidy programs on national fertilizer use and the development of commercial input distribution systems and finally the impact of isps on food price levels and poverty rates the weight of the evidence indicates that the costs of the programs generally outweigh their benefits findings from other developing areas with a higher proportion of crop area under irrigation and with lower fertilizer prices factors that should provide higher returns to fertilizer subsidies than in africa indicate that at least a partial reallocation of expenditures from fertilizer subsidies to r d and infrastructure would provide higher returns to agricultural growth and poverty reduction however because isps enable governments to demonstrate tangible support to constituents they are likely to remain on the african landscape for the foreseeable future hence the study identifies ways in which benefits can be enhanced through changes in implementation modalities and complementary investments within a holistic agricultural intensification strategy among the most important of these are efforts to reduce the crowding out of commercial fertilizer distribution systems and programs to improve soil fertility to enable farmers to use fertilizer more efficiently the challenges associated with achieving these gains are likely to be formidable

creative economy policy in developing countries the case of indonesia this paper investigates how the creative economy discourse is interpreted and implemented in the context of indonesia as a developing country our main conclusion is that the discourse is interpreted differently across localities bandung appears to be the only locality whose interpretation aligns with the general understanding of a creative economy that emphasises knowledge creation and innovation this was made possible by the strong support from academia and communities who wanted to experiment with this policy idea our study also provides an insight into a creative economy developing not only as a discourse but also as a workable framework for development policies in this city conversely other cities seem to pragmatically use the policy idea without considering the local context in a rebranding exercise in order to drive economic development whereby traditional cultural industries are relabelled as creative despite performing hardly any innovation activities despite this bandung illustrates th

are economists traditional trade policy views still valid recent analysis of trade policies under imperfectly competitive market conditions as well as in situations where trade in high technology products is important have raised doubts whether economists should continue their traditional opposition to trade taxes and subsidies this paper evaluates the new theoretical arguments for interventionist trade policies by comparing them with the traditional arguments for and against free trade investigating the empirical evidence supporting the conditions assumed in the new models appraising the realism of the behavior assumptions of these models and the sensitivity of their conclusions to changes in these assumptions and considering the political economy implications of these conclusions the general conclusion is that there are serious practical difficulties with the interventionist arguments of the new trade theorists as they themselves recognize just as there are with such traditional arguments for trade intervention as the terms of trade case for protection however the new industrial organization approach to trade theory has already provided valuable insights into trade behavior in international markets and promises to provide many more as more realistic behavior models are developed this abstract was borrowed from another version of this item

the impact of research led agricultural productivity growth on poverty reduction in africa asia and latin america abstract twenty percent of the world s population or 1 2 billion live on less than 1 per day 70 of these are rural and 90 are in asia and sub saharan africa research led technological change in agriculture generates sufficient productivity growth to give high rates of return in africa and asia and has a substantial impact on poverty currently reducing this number by 27 million per annum whereas productivity growth in industry and services has no impact the per capita cost of poverty reduction by means of agricultural research expenditures in africa is 144 and in asia 180 or 50 cents per day but this is covered by output growth by contrast the per capita cost for the richer countries of latin america is over 11 000

intra industry trade in financial services abstract intra industry trade iit has been central to increasing the variety of products available to consumers unlike traditional trade theories the recent trade theories have placed an emphasis on the role of foreign direct investment fdi in generating trade and increasing the volume of iit this study is the first study of intra industry trade in banking services in which the key elements of the new trade theories of iit have been taken into account in measuring the determinants of iit in banking services the empirical results of the determinants of iit in banking services indicate that factor endowments average per capita income fdi in banking economies of scale in the banking sector trade intensity between the us and its partners and market openness make a positive contribution to the volume of iit in banking services furthermore the empirical results indicate that intra trade activities amongst the us multinational corporations reduce the level of iit in banking services for the us

estimating the general equilibrium benefits of large changes in spatially delineated public goods the purpose of this article is to report a new approach for measuring the general equilibrium willingness to pay for large changes in spatially delineated public goods such as air quality we estimate the parameters of a locational equilibrium model and compute equilibria for alternative scenarios characterizing the availability of public goods within a system of communities welfare measures take into consideration the adjustments of households in equilibrium to nonmarginal changes in public goods the framework is used to analyze willingness to pay for reductions in ozone concentrations in southern california between 1990 and 1995

symmetric pass through of tariffs and exchange rates under imperfect competition an empirical test abstract this paper examines the effect of tariffs and exchange rates on u s prices of japanese cars trucks and motorcycles in particular we test whether the long run pass through of tariffs and exchange rates are identical the symmetry hypothesis we find that this hypothesis is easily accepted in our sample we also find that the pass through relation varies across products ranging from about 0 6 for trucks to unity for motorcycles these coefficients have very different implications for trade policy we explain the results based on demand cost and institutional conditions in each industry

the effects of foreign exchange movements on u s domestic prices this paper draws on the fields of international economics and industrial organization to model and empirically examine the relationship between currency value fluctuations and domestic producer prices the major focus is the issue of whether and why domestic industries differ systematically in their response to exchange rate changes the major findings are that changes in the external value of the u s dollar between 1974 and 1987 passed most fully into domestic prices of industries heavily reliant on imported inports and producing goods highly substitutable for imports highly capital intensive and concentrated industries and those protected by extensive barriers to entry both from domestic and foreign sources have exhibited less domestic price change from the exchange rate movements copyright 1989 by mit press

the dynamics of agglomeration externalities along the life cycle of industries neffke f henning m boschma r lundquist k j and olander l o the dynamics of agglomeration externalities along the life cycle of industries regional studies this paper investigates the changing roles of agglomeration externalities along the industry life cycle it is argued that industries have different agglomeration needs in different stages of their life cycles because their mode of competition innovation intensity and learning opportunities change over time for twelve swedish manufacturing industries it is determined for each year between 1974 and 2004 whether the industry is in a young intermediate or mature stage whereas marshall arrow romer mar externalities steadily increase with the maturity of industries the effects of local diversity jacobs externalities are positive for young industries but decline and even become negative for more mature industries neffke f henning m boschma r lundquist k j et olander l o la dynamique des effets externes d agglomeration tout

methods for including income distribution in global cge models for long term climate change research abstract the consequences of climate policy and the impacts of climate change vary among different types of households depending on their income level expenditure pattern and other socioeconomic characteristics global economy environment models that are used to assess climate change issues traditionally do not distinguish households by income or other attributes to facilitate progress in this area we review and assess literature on methods to include household heterogeneity in global long term computable general equilibrium cge models we distinguish among three categories of approaches 1 the explicit modeling of multiple household types within the cge framework 2 micro simulation modeling and 3 direct modeling of income distribution for each of these approaches we describe the method key assumptions limitations and several prominent examples from the literature moreover we discuss data needs including the contents of household survey data their availability and processing we conclude with an overview of what each method could provide for global long term climate related research

understanding the mechanisms of economic development in this paper i advocate the investigation testing and modification of mechanisms as a progressive empirical research strategy for the field of economic development and other areas of applied economics i discuss three lines of work that have elucidated mechanisms that are relevant for development 1 connections between saving and growth 2 the determinants of commodity prices which are a key source of income for many developing countries and 3 some unexpected puzzles that arise in considering the linkages between income and food consumption in each case my discussion illustrates the positivist approach to the hypotheticodeductive method in this approach mechanisms are proposed key predictions derived and tested and if falsified the mechanisms are rejected or modified if the predictions of a mechanism are confirmed if they are sufficiently specific and if they are hard to explain in other ways we attach additional credence to the mechanism albeit provisionally since later evidence may undermine it sometimes the falsifications can be repaired by changing supplementary assumptions and sometimes they involve long steps backwards where the model is abandoned and often there is disagreement about which is the correct response but the end result is an accumulation of useful knowledge and understanding

alternative hypotheses and the volume of trade the gravity equation and the extent of specialization we examine why the gravity equation works and the implications for its use first we demonstrate that the gravity equation as a statistical relationship can be generated from a model with incomplete specialization and trade costs second we analyse the predominance of zero bilateral trade values as a puzzle broadly inconsistent with the complete specialization models typically used to derive the gravity equation but consistent with the alternative hypothesis of incomplete specialization third we demonstrate that the explanation for why the gravity equation works has considerable relevance for how the gravity equation is interpreted and used and how we view bilateral trade diverses hypotheses et le volume du commerce l equation de gravite et le degre de specialisation les auteurs examinent comment fonctionne l equation de gravite et les implications de son usage on propose trois contributions d abord on montre que l equation de gravite en tant que relation statistique et non pas en tant que prediction specifique de commerce bilateral peut etre produite a partir d un modele avec specialisation incomplete et couts de transaction ensuite on analyse la predominance de valeurs zero dans les commerces bilateraux en tant qu enigme generalement incompatible avec les modeles de specialisation complete utilises habituellement pour deriver l equation de gravite mais compatible avec l hypothese de rechange de specialisation incomplete enfin on montre que les raisons pour lesquelles l equation de gravite fonctionne ont un impact sur la facon de l interpreter et de l utiliser et sur notre facon de concevoir le commerce bilateral

identifying hedonic models economic models for hedonic markets characterize the pricing of bundles of attributes and the demand and supply of these attributes under different assumptions about market structure preferences and technology see jan tinbergen 1956 sherwin rosen 1974 and dennis epple 1987 for contributions to this literature while the theory is well formulated and delivers some elegant analytical results the empirical content of the model is under debate it is widely believed that hedonic models fit in a single market are fundamentally underidentified and that any empirical content obtained from them is a consequence of arbitrary functional form assumptions the problem of identification in hedonic models is a prototype for the identification problem in a variety of economic models in which agents sort on unobservable to the economist characteristics models of monopoly pricing michael mussa and sherwin rosen 1978 robert wilson 1993 and models for taxes and labor supply james heckman 1974 sorting is an essential feature of econometric models of social interactions see william brock and steven durlauf 2001 in this paper we address the sorting problem in hedonic models nesheim 2001 extends this analysis to a model with peer effects in this paper we note that commonly used linearization strategies made to simplify estimation and justify the application of instrumental variables methods produce identification problems the hedonic model is generically nonlinear it is the linearization of a fundamentally nonlinear model that produces the form of the identification problem that dominates discussion in the applied literature linearity is an arbitrary and misleading functional form when applied to empirical hedonic models our research establishes that even though sorting equilibrium in a single market implies no exclusion restrictions the hedonic model is generically nonparametrically identified instrumental variables and transformation model methods identify economically relevant parameters even 1 without exclusion restrictions multimarket data widely viewed as the most powerful source of identification achieves this result only under implausible assumptions about why hedonic functions vary across markets

econometric issues related to identification of the market power parameter this study demonstrates the crucial role the specification of the cost function plays in identifying the market power parameter in autarky models for constant marginal cost or marginal cost with quantity interacting with input prices the market power parameter in autarky models in identified without a rotation of the demand curve if a comodity is sold in both domestic and foreign markets the market power parameters are identified regardless of the specific form of the marginal cost and demand specifications

the boundaries of multinational enterprises and the theory of international trade this paper begins with a review of empirical evidence on multinational firms conceptual underpinnings of a theory are developed relying in particular on the notion of knowledge capital as a mobile joint input into geographically separated production facilities this idea is embedded in a simple two country general equilibrium model that supports multinational production in equilibrium under conditions consistent with the empirical evidence the final section examines internalization and shows why certain properties of knowledge capital also imply a preference for transferring technologies internally within the firm rather than through arm s length markets

intraindustry trade sources and effects on protection this paper provides an empirical analysis of the determinants of intraindustry trade we demonstrate that two way trade flows occur where conditions are favorable to international specialization consistent with the stigler williamson analysis of the division of labor the results are inconsistent with the prevailing product differentiationcum scale economies model of intraindustry trade in addition we show that intraindustry trade has a significant impact on protectionist pressures exports of closely related products have the effect of mitigating the tariff raising effects that imports would otherwise exert

organizational complexity in the regional cultural economy markusen a organizational complexity in the regional cultural economy regional studies cultural industries offer a truncated understanding of the regional cultural economy undercounting self employed workers and others outside the for profit sector commercial public non profit and unincorporated community sectors produce present train organize guide and regulate elements of the cultural economy each with distinctive structures goals and operational systems using survey and census data on artists for two large california regions inter relationships among the sectors are explored the size of the cultural economies of both regions would be underestimated if confined to for profit cultural industries in closing policy implications for regional policy makers are drawn out and avenues for further research are suggested markusen a la complexite organisationnelle de l economie culturelle regionale regional studies les industries culturelles fournissent une explication partielle de l econo

the macro dimensions of food security economic growth equitable distribution and food price stability abstract rather than asking how to cope with hunger and famine the question might be how to escape their threat altogether important in this regard is recognizing that agriculture and the rural economy are greatly influenced by policies and outcomes in the rest of the economy strategies include economic growth with unchanging income distribution and growth with redistribution the latter encourages balanced growth to create non farm employment opportunities while investing in rural infrastructure

the arts and local economic development can a strong arts presence uplift local economies a study of 135 canadian cities the paper looks at arts related employment in 135 canadian urban areas over 35 years 1971 2006 successively examining location patterns co location with knowledge rich industries and impacts on

agglomeration and land rents evidence from the prefectures abstract we use japanese prefectural wage and land rent data to estimate the magnitude of agglomeration effects in manufacturing and financial services we also examine the geographical range of agglomeration effects by estimating the extent to which they diminish with distance using a specification that encompasses the polar cases of purely local agglomeration economies on the one hand and national increasing returns on the other we find that the extent of agglomeration economies in both industries is significant but that their effect decays much faster with distance in financial services than in manufacturing that is the geographical reach of spillovers in financial services appears to be much lower than in manufacturing

an empirical model of mark ups in a quality differentiated export market abstract this paper develops an empirical model to allow for imperfect competition in the market for traded goods a simultaneous equation model incorporating the demand for and supply of taiwanese footwear exports to the united states is specified and estimated the model allows the identification of two separate sources of mark ups in export prices the first comes from the u s imposed quantitative restriction on these exports the second comes from imperfect competition in the international market for these exports the results suggest competitive behavior by taiwanese footwear exporters the quantitative restriction resulted in a 16 9 percent mark up of prices over marginal cost

a model of pricing behavior an econometric case study empirical pricing studies are scarce in the modern literature in spite of their obvious importance for understanding competition the present study employs a structural model to identify deviations of individual pricing routines from the commonly assumed single period profit maximization it is applied to individual wholesale firms because wholesale pricing has a decisive influence on the price formation in the entire economic system and because hardly any research exists in this area the results show that wholesale firms operate in imperfectly competitive world markets providing a highly differentiated service package traders apply pricing rules consistent with cost mark up pricing the mark up varies among traders with the extent to which a firm s pricing strategy deviates from full profit maximization this divergent behavior is associated with firm size the type of buyers served and other aspects of the wholesale service package

economies of scale and the volume of intra industry trade abstract using a model of monopolistic competition with traded and non traded goods this paper establishes a positive link between scale economies the volume of intra industry trade and the share of trade in total production these results are consistent with empirical findings

agricultural growth poverty and nutrition in tanzania abstract rapid economic growth does not appear to have significantly improved poverty and nutrition outcomes in tanzania we link recent production trends to household incomes using a regionalized recursive dynamic computable general equilibrium and microsimulation model results indicate some inconsistency between recent growth and poverty measurements in tanzania we also find that the structure of economic growth may have constrained the rate of poverty reduction agricultural growth has been driven by larger scale farmers who are less likely to be poor and has been concentrated among crops grown in specific regions of the country slow expansion of food crops and livestock also explain the weak relationship between agricultural growth and nutrition outcomes we find that accelerating agricultural growth particularly in maize strengthens the growth poverty relationship and enhances households caloric availability while also contributing significantly to growth itself

hyteresis in import prices the beachhead effect this paper shows that temporary real exchange rate fluctuations can have persistent hysteretic effects on trade specifically when market entry costs are sunk sufficiently large exchange rate shocks alter domestic market structure and thereby induce hysteresis this simple result has strong implications for exchange rate theory t rade policy and estimation of trade equations empirical evidence su ggests that the recent dollar overvaluation induced hysteresis in u s import prices namely the aggregate pass through equation of exchange rates to import prices shifted in the 1980s the shift s nature and timing is broadly consistent with the hysteresis hypothesis copyright 1988 by american economic association

doing well by doing good green office buildings this paper provides the first credible evidence on the economic value of the certification of green buildings in the commercial sector value derived from impersonal market transactions rather than engineering estimates we match publicly available information on the addresses of energy star and leed rated office buildings to a commercial data source detailing the characteristics of u s office buildings and their rental rates we analyze the micro data on 694 certified green buildings and on 7489 other office buildings located within a quarter mile of the certified buildings we find systematic evidence that rents for green offices are about two percent higher than rents for comparable buildings located nearby effective rents i e rents adjusted for the occupancy levels in office buildings are about six percent higher in green buildings than in comparable office buildings nearby at prevailing capitalization rates conversion of the average non green building to an equivalent green building would add more than 5 million in market value these results are robust to the statistical models employed

the artistic dividend urban artistic specialisation and economic development implications over the past two decades urban and regional policy makers have increasingly looked to the arts and culture as an economic panacea especially for the older urban core the arts regional economic contribution is generally measured by totalling the revenue of larger arts organisations associated expenditures by patrons and multiplier effects this approach underestimates the contributions of creative artists to a regional economy because of high rates of self employment and direct export activity because artists work enhances the design production and marketing of products and services in other sectors and because artists induce innovation on the part of suppliers artists create import substituting entertainment options for regional consumers and spend large shares of their own incomes on local arts output the paper takes a labour centred view of the arts economy hypothesising that many artists choose a locale in which to work often without regard to particular employers but in response to a nur

did the strong dollar increase competition in u s product markets sunk cost models of new trade theory have demonstrated that large unanticipated swings in currency values can have permanent effects on trade flows by altering market structure in imperfectly competitive markets the author tests an implication of these models using panel data on export unit values from germany and japan to a number of foreign markets including the united states he finds weak evidence in support of the thesis that u s product markets became more competitive as a result of the large dollar appreciation of the 1980s although the results vary by industry and comparison country copyright 1994 by mit press

how well do tree plantations comply with the twin targets of the clean development mechanism the case of tree plantations in tanzania the clean development mechanism cdm of the kyoto protocol is supposed to provide both carbon mitigation and poverty reduction this article reports from a model based study of market related carbon leakage and poverty reduction in the wake of a cdm tree planting project in tanzania a tree plantation was incorporated in a computable general equilibrium cge model with income differentiated household segments the study focused on sensitivity of carbon leakage and income distribution to different project ownerships and carbon premium allocations it turned out that the project value in terms of carbon premium has clear shortcomings as indicator of induced gdp growth and poverty alleviation the non poor rural and urban households benefit considerably more than the poor households however rising household income in all domestic project ownership arrangements increases demand for food raises use of fertilizer and crop yields a carbon cycle module for agricultural land use was incorporated in the cge model showing an increased carbon sequestration in agricultural soil representing a negative leakage through markets in the range of 60 120 of the certified emissions reductions as registered in the cdm tree plantation project

spatial wage disparities sorting matters spatial wage disparities can result from spatial differences in the skill composition of the workforce in non human endowments and in local interactions to distinguish between these explanations we estimate a model of wage determination across local labour markets using a very large panel of french workers we control for worker characteristics worker fixed effects industry fixed effects and the characteristics of the local labour market our findings suggest that individual skills account for a large fraction of existing spatial wage disparities with strong evidence of spatial sorting by skills interaction effects are mostly driven by the local density of employment not controlling for worker heterogeneity leads to very biased estimates of interaction effects endowments only appear to play a small role

the distinctive city divergent patterns in growth hierarchy and specialisation with accelerated world market integration cities compete with each other cities as sites of production and consumption targeting firms and households as semi autonomous location decision makers distinction may be sought in productive structure consumption and identity in this paper contradictory trends towards homogenisation and distinctiveness are theorised studying the occupational structure of 50 large us metropolitan areas it is found that distinctiveness has been increasing in economic base occupations though some heavily blue collar cities edge is eroding employment in consumption activities has been growing faster than in the economic base and cities are becoming more alike in consumption structure it is concluded that the search for niches in exporting sectors and related occupational mix is key to urban resurgence

when ideas trump interests preferences world views and policy innovations the contemporary approach to political economy is built around vested interests elites lobbies and rent seeking groups which get their way at the expense of the general public the role of ideas in shaping those interests is typically ignored or downplayed yet each of the three components of the standard optimization problem in political economy preferences constraints and choice variables rely on an implicit set of ideas once the manner in which ideas enter these frameworks is made explicit a much richer and more convincing set of results can be obtained in particular new ideas about policy or policy entrepreneurship can exert an independent effect on equilibrium outcomes even in the absence of changes in the configuration of political power

economic reform and smallholder agriculture in tanzania a discussion of recent market liberalization road rehabilitation and technology dissemination efforts abstract this paper discusses the reforms affecting tanzania s small farm sector during 1984 1993 it focuses on changes in marketing and input supply including the revival of regional cooperative societies the ending of the state monopoly in food crop procurement and changes in the export crop sector efforts to rehabilitate the country s road network and the effects of institutional change on a technology dissemination program sasakawa global 2000 are also discussed the author concludes that improvements in the performance of the smallholder sector cannot be expected to follow automatically from a withdrawal of government

structural adjustment and soil degradation in tanzania a cge model approach with endogenous soil productivity abstract in this paper a model of the nitrogen cycle in the soil is incorporated in a computable general equilibrium cge model of the tanzanian economy thus establishing a two way link between the environment and the economy for a given level of natural soil productivity profit maximising farmers choose input levels and hence production volumes which in turn influence soil productivity in the following years through the recycling of nitrogen from the residues of roots and stover and the degree of erosion the model is used to simulate the effects of typical structural adjustment policies like a reduction in agro chemicals subsidies reduced implicit export tax rate etc after 10 years the result of a joint implementation is a 9 higher gross domestic product gdp level compared to the baseline scenario the effect of soil degradation is found to represent a reduction in the gdp level of more than 5 for the same time period

the competitive structure of u s agricultural exports the competitive structure of u s agricultural exports is examined using a model of exporter behavior based on pricing decisions across destination markets market power is revealed in the adjustment patterns of export prices in response to exchange rate movements the results reject the hypothesis that the export pricing decisions by u s firms are consistent with price discrimination across destination markets for cotton corn and soybeans the strongest evidence against the competitive market structure is obtained for international trade in wheat where results indicate that the two largest importers soviet union and prc may exert market power to obtain lower prices

semiparametric hedonic price models assessing the effects of agricultural nonpoint source pollution in the area of environmental analysis using hedonic price models we investigate the performance of various nonparametric and semiparametric specifications the proposed model specifications are made up of two parts a linear component for house characteristics and a non semi parametric component representing the nonlinear influence of environmental indicators on house prices we adopt a general to specific search procedure based on recent specification tests comparing the proposed specifications with a fully nonparametric benchmark model to select the best model specification an application of these semiparametric models to rural districts indicates that pollution resulting from intensive livestock farming has a significant nonlinear impact on house prices copyright 2008 john wiley sons ltd

price discrimination and markups in export markets abstract imperfect competition in international markets is one of the key explanations for why prices of similar goods might differ among destination countries this paper develops an empirical model to examine the presence of price discrimination stemming from imperfect competition in the international market for a country s exports the model is used to examine the export behavior of taiwanese exporters of footwear the generalized supply relation allows identification of deviations from competitive pricing in each export market in addition the model provides insights into the extent of exchange rate pass through finally the model is modified in order to estimate the effect of the voluntary export restraint imposed in the u s on footwear imports from taiwan

housing the knowledge economy in china an examination of housing provision in support of science parks little attention is paid in the extant academic literature to the question of housing knowledge workers despite the potential mismatches between housing supply and demand this paper provides an initial examination of housing the knowledge economy in china focusing on three science parks sps zhongguancun z park beijing zhangjiang z ship shanghai and optics valley of china ovc wuhan it discusses to what extent and how these three sps have factored in the housing dimension in connection with the knowledge economy paying particular attention to housing affordability location inside the sps or outside in the wider city region and the mode of provision market or state insights were drawn from documentary analysis and in depth interviews in the three chosen case studies initial evaluation of policies geared towards housing supply in china suggests that the housing question needs to come to the fore in discussions of structural transformation towards the knowledge economy

producing biofuels in low income countries an integrated environmental and economic assessment for tanzania this paper jointly evaluates the greenhouse gas emissions and economic impacts from producing biofuels in tanzania sequentially linked models capture natural resource constraints emissions from land use change economywide growth linkages and household poverty results indicate that there are economic incentives to convert unused lands to sugarcane ethanol production but only grasslands not forests have a reasonable carbon payback period there are also strong socioeconomic reasons to involve smallholders in feedstock production in order to reduce rural poverty especially since our results indicate that biofuels have little effect on food production yet smallholders require more land than large scale plantations and so face more binding natural resource and emissions constraints overall environmental constraints alter the socioeconomically optimal biofuel strategy for tanzania by limiting potential poverty reduction unlike previous studies our integrated assessment suggests that a mixed farming system with greater emphasis on large scale plantations is more appropriate for producing sugarcane ethanol in tanzania

economies of density and productivity in service industries an analysis of personal service industries based on establishment level data abstract this study aims to empirically investigate the determinants of service industry productivity such as economies of scale and economies of density by using establishment level data related to personal service industries in japan the study estimates the production functions for both value added and physical output measures in almost all the service industries examined significant economies of scale and economies of density are observed wherein productivity increases by 7 to 15 when the municipality population density doubles these findings are confirmed by an estimation in which the measures of physical output are considered instead of value added

exchange rates and traded goods prices abstract this paper presents a partial equilibrium model of the determination of domestic and export prices by a monopolistic competitive firm the model stresses the role of exchange rate uncertainty and expectations the most important result of the analysis is that the stochastic properties of deviations from the law of one price are crucially affected by the currency of denomination of export prices using data on domestic and dollar export prices of japanese goods i find that deviations from the law of one price are due to exchange rate surprises but also to price staggering and ex ante price discrimination

trade effects of scale economies evidence from four eu countries abstract this paper investigates the empirical relationship between the magnitude of scale economies and trade scale economies are directly estimated from a non linear translog production function system these estimates are then introduced in an original supply demand export model the application of this model to four eu countries indicates that exports unambiguously rise with the degree of scale economies these results support schmitt and yu s econ lett 74 2001 127 theoretical expectations

exchange rate pass through when market share matters the authors investigate the pass through from exchange rates to import prices when firms future demands depend on their current market shares they show that profit maximizing foreign firms may either raise or lower their dollar export prices when the dollar appreciates temporarily i e the pass through may be perverse and that current import prices may be more sensitive to expected future exchange rates than to current exchange rates they present evidence that suggests the behavior of expected future exchange rates may provide a clue to the puzzling recent behavior of u s import prices copyright 1989 by american economic association

explaining the evolution of poverty the case of mozambique we provide a comprehensive approach for analyzing the evolution of poverty using mozambique as a case study bringing together data from disparate sources we develop a novel back casting framework that links a dynamic computable general equilibrium model to a micro simulation poverty module this framework provides a new approach to explaining and decomposing the evolution of poverty as well as to examining rigorously the coherence between poverty economic growth and inequality outcomes finally various simple but useful and rarely applied approaches to considering regional changes in poverty rates are presented copyright 2012 oxford university press

price margins and capital adjustment canadian mill products and pulp and paper industries abstract the purpose of this paper is to estimate a model incorporating non competitive behaviour in product and factor markets in addition capital accumulation is subject to adjustment costs so that firms are not constrained to be in long run equilibrium the model is applied to two major canadian manufacturing industries pulp and paper and mill products the results show for both industries in each of three product markets and the wood input market that there is competitive behaviour in addition the industries are not in long run equilibrium as marginal adjustment costs cause marginal profit to exceed the rental rate on capital with the industries exhibiting short run competitive behaviour in product and factor markets new estimates are derived for scale economies and rates of technological change unlike the results from other studies both industries exhibit small scale economies and positive rates of technological change

dots to boxes do the size and shape of spatial units jeopardize economic geography estimations this paper evaluates in the context of economic geography estimates the magnitude of the distortions arising from the choice of zoning system which is also known as the modifiable areal unit problem maup we consider three standard economic geography exercises the analysis of spatial concentration agglomeration economies and trade determinants using various french zoning systems differentiated according to the size and shape of spatial units which are the two main determinants of the maup while size matters a little shape does so much less both dimensions seem to be of secondary importance compared to specification issues

estimating housing demand with an application to explaining racial segregation in cities we present a three stage nonparametric estimation procedure to recover willingness to pay for housing attributes in the first stage we estimate a nonparametric hedonic home price function in the second stage we recover each consumer s taste parameters for product characteristics using first order conditions for utility maximization finally in the third stage we estimate the distribution of household tastes as a function of household demographics as an application of our methods we compare alternative explanations for why blacks choose to live in center cities while whites suburbanize

rural bound determinants of metro to non metro migration in the united states a general global precept is that agglomeration forces lead to migration from rural to urban areas yet for much of the time since the early 1970s more people have moved from metro to nonmetro u s counties the underlying causes of this pattern have changed over time with economic shocks and changing household preferences for instance the post 2000 period has seen a significant decline in domestic migration rates a significant increase in commodity prices that favor rural areas and potential changes in the valuation of natural amenities that would affect migration this article investigates the determinants of u s gross migration from metro to nonmetro counties and nonmetro to metro counties for the 1995 2000 and 2005 2009 periods in order to compare the differences in rural to urban and urban to rural migration as well as compare the 1990s to the 2005 2009 periods more specifically the present study extends the literature by more broadly examining the underlying factors associated with deconcentration and economic restructuring arguments of metro to nonmetro migration the article uses 1 extensive county to county migration flows and 2 the utility maximization theory that extends the framework of a discrete choice model the results show that population density distance to urban areas industry mix employment growth natural amenities and percentage of older people are key factors underlying these migration patterns we also find a slight fading of effects of natural amenities and population density and a slight increase in the effects of wage and employment growth from 2005 2009

increasing agricultural productivity while reducing greenhouse gas emissions in sub saharan africa myth or reality the motivation for this study stems from two major concerns that are interlinked the first is the decades long food insecurity crisis faced by sub saharan african ssa countries which is still prevalent the second is the negative impact greenhouse gas ghg emissions from agriculture may have on future food production and which is likely to worsen the food insecurity problem the conundrum ssa farmers face is how to increase food output through productivity growth while minimizing ghg emissions to measure changes in productivity growth and ghg emissions this study evaluates the agricultural performance of 18 ssa countries by utilizing the malmquist luenberger index to incorporate good and bad outputs for the years 1980 2012 the empirical evidence demonstrates that productivity is overestimated when bad outputs are not considered in the production model the analysis provides a better understanding of the effectiveness of previous mitigation methods and which informs an appropriate course of action needed to achieve the twin objectives of increasing agriculture productivity while reducing ghg emissions

spatial variation in office rents within the atlanta region hedonic office rent models are estimated using data for atlanta that span the years 1990 96 controlling for typical building characteristics and lease terms we find that variables measuring locational differences in wage rates transport rates and proximity to concentrations of support services and office workers play an important role in explaining spatial variation in office rents no evidence is found in support of the hypothesis that technological advances in telecommunications have diminished the role played by face to face agglomeration economies in determining the intra metropolitan location of office firms

intra industry specialization in a multi country and multi industry framework the paper tests alternative hypotheses as to the factors determining the extent of intra industry trade defined as the share of this trade in total trade in a multi country and multi industry framework the empirical results show that the extent of intra industry trade in a particular industry between any two countries depends on the characteristics of the industry and the countries concerned the explanatory power of the regressions for the entire group of countries exporting manufactured goods as well as for trade among the developed countries is relatively high and practically all the hypotheses concerning the impact of industry trade are supported by the empirical results lower coefficients of determination have been obtained for trade between developed and developing countries and for trade among developing countries but the estimates generally support the hypotheses put forward in the paper in these cases also

price cost margins exports and productivity growth with an application to canadian industries a model is estimated for oligopolistic industries producing multiple outputs in short run equilibrium outputs are sold domestically and exported while capital is treated as a quasi fixed factor the model is applied to the canadian non electrical machinery electrical products and chemical products industries the results show that there is significant oligopoly power in each of the industries and that the degree of this power differs between the domestic and export markets total factor productivity is decomposed price cost margins exert little influence but the rate of technological change returns to scale and the rate of capital adjustment determine productivity growth

estimating equilibrium models of sorting across locations while there is growing interest in measuring the size and scope of local spillovers it is well understood that such spillovers cannot be distinguished from unobservable local attributes using solely the observed location decisions of individuals or firms we propose an empirical strategy for recovering estimates of spillovers in the presence of unobserved local attributes for a broadly applicable class of equilibrium sorting models our approach relies on an iv strategy derived from the internal logic of the sorting model itself we show practically how the strategy is implemented provide intuition for our instruments discuss the role of effective choice set variation in identifying the model and carry out a series of monte carlo simulations to demonstrate performance in small samples

the demand for food and calories we investigate nutrition and expenditure in rural maharashtra in india we estimate that the elasticity of calorie consumption with respect to total expenditure is 0 3 0 5 a range that is in accord with conventional wisdom the elasticity declines only slowly with levels of living and is far from the value of zero suggested by a recent revisionist literature in these indian data the calories necessary for a day s activity cost less than 5 percent of the daily wage which makes it implausible that income is constrained by nutrition rather than the other way around

a game theoretic analysis of skyscrapers abstract skyscrapers are urbanism in the extreme but they have received surprisingly little direct attention in urban economics the standard urban model emphasizes differentials in access across locations which determine land price differentials and building heights this explanation leaves out an important force that appears to have historically influenced skyscraper construction an inherent value placed on being the tallest in this paper we present a game theoretic model of skyscraper development that captures this additional force the model predicts dissipative competition over the prize of being tallest a prediction consistent with the historical record the paper discusses the implications of this result for the nature and efficiency of urban development and for the operation of urban real estate markets

urban diversity and economic growth at the risk of some simplification it is possible to identify four periods of intense study of cities by economists each of these has led to an increased understanding of the economics of urban areas and the unique role played by cities in the modem economy the first of these periods occurred in the decade after world war i only about ten years after the truck revolutionized the transport of goods within urban areas this period included the first systematic empirical analysis of the forces affecting the location of firms and households within cities robert murray haig 1926 and a number of other microeconomists at columbia analyzed the spatial pattems of manufacturing activity in lower manhattan and in the rest of new york city haig jmd his colleagues devoted considerable attention to where things belong in an urban area p 402 providing the first systematic economic analysis of urban spatial structure for example they analyzed the garment industry concluding that it was destined by nature to disperse north of 14th street and predicting that it would follow the estabhshed spatial pattem of the cooperage barrelmaking industry standardization in size and quality of barrels had meant that identical barrels could be made throughout the new york metropolitan area even in new jersey and the introduction of the truck meant that they could be transported cheaply throughout the region and exported the second of these periods though not in chronological order began in the mid 1960s it formalized many of the insights about location incentives within urban areas which had been uncovered a half century before mixed them with the logic of heinrich von thunen s 1826 ancient theories about agricultural crops and land values and applied them to the hotisehold sector the works of william alonso 1964

the demand for creative arts in regional victoria australia a healthy creative arts industry can contribute significantly to the economic and social fabric of a community unfortunately regional areas often suffer from a lack of supply and demand for the creative arts this article explores the demand for the creative arts in three regional locations in victoria australia using three broad dimensions of demand attitudes towards the arts frequency of participation in the arts and level of expenditure on the arts the analysis of demand patterns uses the general modelling approach of levy garboua and montmarquette 1996 as a basis and makes use of the ordered probit class of models for its statistical analysis the study confirms that individual levels of demand are contingent on a range of demographic characteristics and also identifies factors such as festival attendance and increased past creative arts expenditure as being important determinants of demand for the arts

agglomeration economies and productivity a structural estimation approach using commercial rents we gain more insight into the heterogeneity in firms productivity regarding agglomeration economies given a production function that allows for input factor substitution we identify ratios of firm specific production parameters employing a hedonic price approach we use unique microdata of commercial rents and firm characteristics and employ semiparametric estimation techniques the results show that agglomeration economies capitalize in commercial rents nevertheless expenditure on agglomeration is in general limited for example it is on average only 5 3 of expenditure on office floor space it is much higher in some sectors for retail firms it is about 20 of the expenditure on floor space 2013 the london school of economics and political science

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

productive and financial performance in u s manufacturing industries an integrated structural approach in the last few years macroeconomists and industrial organization researchers have reexamined relationships among scale economies markups economic profitability and productivity growth paul romer 14 has emphasized the importance of increasing returns for productivity growth at the aggregate industry or economy level empirical evidence supporting this at the industry level has been presented by robert hall 4 5 who reported both significant increasing returns and markups of price over marginal cost in various u s manufacturing sectors related evidence on the cyclical nature of markups in these industries suggesting some procyclicality of markup behavior has been presented by domowitz hubbard and petersen 3 analysis of the cyclical characteristics of robert solow s 16 productivity residual provided the basis for these empirical studies the resulting framework is limited however by its dependence on a number of restrictive assumptions which severely hamper analysis of interactions among these characteristics the purpose of this paper is to extend this type of analysis to consider profit maximizing markups economic profitability scale economies capacity utilization and productivity growth within an integrated theoretical structural model and to assess their interactions empirically for two digit u s manufacturing data more specifically using the new industrial economics approach outlined by timothy bresnahan 2 in which marginal cost and therefore markups are unobserved but estimated econometrically i specify an integrated cost and demand structure for each industry the structure is quite general in that i markups and returns to scale are permitted to vary over time they are not constant parameters ii shortand long run impacts are distinguished by explicit recognition of adjustment costs iii quasi fixity of both capital and labor is incorporated to accommodate labor hoarding as well as slow adjustment of capital iv input substitution is not constrained a priori a generalized leontief restricted cost function based on gross output is employed v nonstatic expectations are allowed for through an instrumental variable estimation procedure and vi the effects of cost and demand shocks are directly represented by specifying and estimating industry specific cost output demand and input demand functions

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