changes in human capital and earnings inequality recent evidence from brazil 1 abstract this paper estimates changes in the rates of return to human capital across the earnings distribution using data from over a 10 year period for brazil it uses these estimates to simulate the separate impacts of changes in returns to skills and changes in the supply of skills on earnings inequality evidence points strongly to growing inequality in rates of return to education in brazil this finding suggests that recent macroeconomic and trade reforms have been of most benefit to the skilled rather than the unskilled supporting evidence points to an improved competitiveness in the labour market with workers increasingly rewarded for productivity however although increases in returns to education are more pronounced at the top of the earnings distribution this did not in practice led to increased inequality this is because levels of education and other labour market rewarded endowments have increased and offset the rate of return effect appropriate education policy is therefore an essentia

ten little treasures of game theory and ten intuitive contradictions this paper reports laboratory data for games that are played only once these games span the standard categories static and dynamic games with complete and incomplete information for each game the treasure is a treatment in which behavior conforms nicely to predictions of the nash equilibrium or relevant refinement in each case however a change in the payoff structure produces a large inconsistency between theoretical predictions and observed behavior these contradictions are generally consistent with simple intuition based on the interaction of payoff asymmetries and noisy introspection about others decisions

unemployment in south africa the nature of the beast abstract unemployment in south africa is so widespread that it demands an explanation this paper examines a central question about south african unemployment why do the unemployed not enter the informal sector as is common in other developing countries the data do not support the idea that unemployment is largely voluntary the policy implications that government should diminish labor market segmentation and the obstacles to entering the productive informal sector may be relevant also to other developing countries with high unemployment

game shows and economic behavior risk taking on card sharks this paper studies individual risk taking behavior with a unique data set risky decisions of contestants during the threeyear history of the television game show card sharks in the bonus round of the game individuals choose how much to wager on positive expected value gambles with known and varying probabilities and large possible payouts since no special skills or knowledge are involved empirical analysis is not complicated by a contestant s superior information about her own abilities stakes can reach 16 000 and average 3 200 few experimental budgets permit even one observation of this magnitude first i simply estimate how risk averse contestants behave under the assumption of expected utility maximization i estimate a lower bound for the coefficient of absolute risk aversion of 0 00031 which when multiplied by per capita u s personal income gives an estimate of relative risk aversion of 4 8 this estimate is higher than most econometric estimates of risk aversion contestants however do not act in a manner consistent with expected utility maximization so this number should not be given a structural interpretation rather it is simply a useful way to summarize average willingness to bear risk of individuals on the show second i explore how individual behavior is inconsistent with expected utility theory the amount a contestant wishes to wager depends critically on the amount of wealth she has accumulated in the bonus round and therefore on the size of the stakes this is at odds with expected utility theory since the size of the stakes although far from insignificant is small relative to a person s wealth contestants should then have close to constant absolute risk aversion with respect to accumulated winnings in the game a more striking result deals with contestants who had previ

trade liberalization and wage inequality abstract this paper studies empirically the link between trade liberalization and wage inequality in chile within the context of the heckscher ohlin samuelson hos model we use cointegration techniques to estimate the long run relationship between the skill premium in chile and product prices openness and factor endowments we find that the fall in the relative price of labor intensive goods helps explaining the increase in wage inequality in chile during the last two decades the increase in proportion of the labor force with college degree on the other hand tends to reduce wage inequality in chile openness measured as the volume of trade over gdp widens the wage gap between skilled and unskilled labor we offer some hypothesis on the elements that are behind this positive relationship between wage openness and inequality but no empirical work is done this area may be an interesting subject of research

experimental comparison of impact of auction format on carbon allowance market abstract carbon allowances auctions are a good way to achieve the carbon allowance allocations under international agreements to address global climate change based on an economic experiment this paper compares three possible carbon allowance auction formats uniform price auction discriminatory price auction and english clock auction with heterogeneous bidders coal power plants and gas power plants from four perspectives carbon price auction efficiency demand withholding and fluctuations in power supplies possibilities of collusion among bidders and impacts of allowance banking and penalty price on bidders behaviors under different auction formats are also examined the results show that 1 when there are relatively more bidders and there are no obvious communications between them despite there being some tacit collusion efficiency of english clock auction is greater than the other two formats 2 when there are relatively fewer bidders and there are obvious communications between them explicit collusions are observed under english clock auction in this case discriminatory price auction helps prevent collusion to some extents 3 in the banking scenario more speculations are observed while penalty price exacerbates price volatility

calm after the storms income distribution and welfare in chile 1987 94 after rising during most but not all of the 1960 85 period inequality in chile seems to have stabilized since around 1987 following the stormy period of economic and political reforms of the 1970s and 1980s no statistically significant lorenz dominance results could be detected since 1987 scalar measures of inequality confirm this picture of stability but suggest a slight change in the shape of the density function with some compression at the bottom being compensated for by a stretching at the top as inequality remained broadly stable sustained economic growth led to substantial welfare improvements and poverty reduction according to a range of measures and with respect to three different poverty lines poverty mixed stochastic dominance tests confirm this result all of these findings are robust to different choices of equivalence scales

one two three infinity newspaper and lab beauty contest experiments beauty contest is a game in which participants have to choose typically a number in 0 100 the winner being the person whose number is closest to a proportion of the average of all chosen numbers we describe and analyze beauty contest experiments run in newspapers in uk spain and germany and find stable patterns of behavior across them despite the uncontrollability of these experiments these results are then compared with lab experiments involving undergraduates and game theorists as subjects in what must be one of the largest empirical corroborations of interactive behavior ever tried we claim that all observed behavior across a wide variety of treatments and subject pools can be interpretedas iterative reasoning level 1 reasoning level 2 reasoning and level 3 reasoning are commonly observed in all the samples while the equilibrium choice level maximum reasoning is only prominently chosen by newspaper readers and theorists the results show the empirical power of experiments run with large subject pools and open the door for more experimental work performed on the rich platform offered by newspapers and magazines

region division of china s carbon market based on the provincial municipal carbon intensity abstract the difference of carbon trading prices among emission trading scheme pilots may hinder the unified carbon market that china s government plans to establish in 2017 to achieve this goal this study develops a regional carbon market mode based on the similarity of thirty provinces municipalities carbon intensity by the aid of logarithmic mean divisia index autoregressive and dynamic time warping models according to the dynamic clustering result we divide these provinces municipalities into three sub markets that are the western eastern and central markets furthermore we propose the carbon emission modes corresponding to each sub market namely the energy dependence mode western market sustainable economy mode eastern market and industrial upgrading mode central market briefly we suggest that the unified market should be firstly divided into some sub markets finally we propose some critical routes as well as corresponding managerial implications for establishing such unified market

who wants to globalize consumer tastes and labor markets in a theory of trade policy beliefs although the allure of consumption is the engine of globalization political economists have tended to ignore varying consumer tastes as a potential source of beliefs about trade policy this article develops a theory of trade policy preferences that adds the notion of varying consumer tastes to the standard labor market application of the heckscher ohlin trade model the theory which can explain trade preferences both across individuals and countries is supported by an empirical analysis of survey data from 41 nations heavy consumers of exportables are found to be more protectionist than heavy consumers of imports and import competing goods moreover citizens in countries with expensive tradable goods see trade liberalization as a remedy to the rents they pay for protectionism other findings also support the more conventional labor market side of the heckscher ohlin model

how does globalisation affect regional inequality within a developing country evidence from china developing countries are increasingly concerned about effects of globalisation on regional inequality this paper develops an empirical method for decomposing the contributions of two major driving forces of globalisation foreign trade and foreign direct investment fdi on regional inequality and applies it to china even after controlling for many other factors globalisation is still found to be an important factor contributing to the widening regional inequality the paper ends by investigating the role of factor market segmentations in aggravating the distributional effect of changing regional comparative advantages in the process of globalisation

trade liberalization and the skill premium in developing economies empirical evidence shows that while the skill premium narrowed in some developing countries following trade liberalization it widened in others or even exhibited non monotonic behavior this paper studies a simple dynamic general equilibrium trade model in which differences in initial conditions across developing countries play a key role in explaining the variety of skill premium behaviors differences in initial conditions in terms of skilled labor and physical capital emerge in the model due to differences in trade policies the model can generate non monotonic behavior for the skill premium following trade liberalization

openness and wage inequality in kenya 1964 2000 summary this paper analyzes the evolution of wage inequality in kenya during 1964 2000 our measure of wage inequality is the ratio of wages in manufacturing to wages in agriculture which can be seen as an indicator of sectoral wage inequality or as a proxy for skilled to unskilled wages we find that changes in relative wages have primarily been driven by the degree of openness while other factors such as the capital labor ratio educational attainment relative labor productivity and the ratio between agricultural and manufacturing prices had no significant effect we conclude that international market integration has reduced wage inequality in kenya

upgrading primary production a global commodity chain approach abstract global commodity chain gcc analysis has been concerned mainly with examining power relations in global manufacturing industries although it has been preoccupied increasingly by the question of how developing country dc producers can upgrade this paper extends gcc analysis to traditional primary commodities where international traders exercise the driving role and suggests a new agenda for their upgrading in dcs based upon public action

india s industrial development an interpretative survey in recent years there has been a significant shift in indian industrial strategy from a heavily regulated and inward oriented structure toward significant liberalization in both domestic and trade policy at the same time indian industry has sustained its historically impressive growth performance the two waves of liberalization in the 1980s and after 1991 have been associated with significant structural change there is some question however as to whether this change in strategic orientation is consistent with rising per capita incomes this paper reviews these changing strategic perspectives and the economic performance of the industrial sector in the post independence period it concludes that most studies which have been undertaken of indian industrialization have been macroeconomic in nature and that there has been a poor tradition of microeconomic research into the determinants of industrial competitiveness

the impacts of trade on the brazilian labor market a cge model approach abstract the paper assesses the impacts of trade liberalization on macroeconomic variables and labor market indicators in brazil the discussion comes out of an earlier debate on the role of trade liberalization in shaping labor market outcomes in the well known heckscher ohlin and stolper samuelson hos theorems to address these issues we use a computable general equilibrium cge modeling approach to model the patterns of export growth by sector and their effects on macroeconomic and labor market indicators overall our results show that trade liberalization contributes to improve economic welfare by means of greater output lower domestic prices and higher labor demand the benefits of this economic improvement tend however to be appropriated by the most skilled workers in the most trade oriented sectors contradicting the predictions of the hos theorems

globalization and rural poverty as is common in most contentious public debates different people mean different things by globalization some interpret it to mean the global reach of new technology and capital movements some refer to outsourcing by domestic companies in rich countries others protest against the tentacles of corporate capitalism or us hegemony economic military or cultural in this chapter i shall limit myself to interpreting globalization simply as openness to foreign trade and long term capital flows i shall ignore here the important issues arising from the devastation caused to fragile economies by billions of dollars of volatile short term capital stampeding around the globe in herd like movements or the substantial poverty reducing potential of international unskilled labour flows from poor to rich countries even if allowed in temporary and regulated doses

openness and wage inequality in developing countries the latin american challenge to east asian conventional wisdom the experience of east asia in the 1960s and 1970s supports the theory that greater openness to trade tends to narrow the wage gap between skilled and unskilled workers in developing countries in latin america since the mid 1980s however increased openness has widened wage differentials this conflict of evidence is probably not the result of differences between east asia and latin america instead the conflict is probably the result of differences between the 1960s and the 1980s specifically the entry of china into the world market and perhaps the advent of new technology biased against unskilled workers

trade liberalization and rising wage inequality in latin america reconciliation with hos theory abstract the paper puts forward the hypothesis that the transitory effects of trade liberalization on wage inequality can differ from the long run outcome in cases where the hos theory predicts a decline in wage inequality in the long run a temporary rise can nevertheless occur due to i the asymmetries in the speed of contraction in the import sector and expansion in other sectors and ii the capital skill complementarity in production the asymmetric contraction and expansion causes a transitory capital accumulation that boosts the relative and the real wage of skilled labor due to capital skill complementarity although the long run hos fundamentals are therefore dominated in the short run by the transient effects arising due to capital skill complementarity the observed rise in wage inequality is nonetheless consistent with the hos theory appropriately extended to a dynamic setting

an equilibrium model of consumer energy choice using a personal carbon trading scheme based on allowance price abstract changes in consumer behavior due to a personal carbon trading pct scheme are theoretically attractive yet untested in practice in this paper simulations on the basis of an equilibrium model are used to examine the effects of carbon allowance prices on energy use choice under a particular pct scheme it is shown that the equilibrium price of allowances would emerge under the pct scheme considered here further analyses indicate that the quantity of energy consumption under pct is a nonlinear function of the allowance price with a sharp kink at the point of equilibrium when the allowance price is below the equilibrium price consumers would prefer higher carbon energy in contrast when the allowance price is above the equilibrium price consumers would choose lower carbon energy however when the allowance price equals the equilibrium value consumers would purchase lower carbon energy and higher carbon energy simultaneously furthermore it is shown that the initial allowance allocation could also affect energy use choice on the basis of these results one of the main implications is that the allowance price should exceed the breakeven price to stimulate consumers to switch to green energy and progressively live a low carbon lifestyle

trade and industrial policy on an uneven playing field the case of the deciduous fruit canning industry in south africa the deciduous fruit canning industry dfci is a resource and labor intensive industry with a high trade ratio it offers the prospect of being a significant source of employment and export earnings for a number of southern hemisphere countries which enjoy a considerable comparative advantage market distortions severely constrain this outcome however most importantly a combination of protection and subsidies in the industrially advanced countries in addition as in other sectors globalization is increasingly associated with processes in which value added activities are located in the major markets of the industrialized countries this paper examines the dfci in south africa and explores the consequences of market distortions and the shifting location of profitable activities for both industrial and trade policy in that country

globalisation and unequalisation what can be learned from value chain analysis although many have gained from the process of globalisation there remains a stubbornly large number of people living in absolute poverty and a rise in inequality within and between countries the issue is thus not whether to participate in the global economy but how to do so in a manner which provides for sustainable and equitable income growth this study shows how value chain analysis can be used to chart the growing disjuncture between global economic activity and global income distribution and to provide causal explanations for this outcome in so doing value chain analysis provides valuable insights into policy formulation and implementation

capital intensity in south african manufacturing and unemployment 1972 1990 this paper explores the changing structure of investment and employment in south africa s manufacturing sector during 1972 1990 it considers the hypotheses that poor employment performance and high levels of capital intensity have arisen as a consequence of the overexpansion of capital intensive sectors and distorted factor prices in the main these hypotheses are rejected instead it is argued that poor employment performance arises largely from political factors which have dulled the private sector s investment in labor intensive sectors have stifled the development of the informal sector have held back productivity growth in manufacturing and have reduce the inflow of foreign direct investment although the paper is not primarily focused on the emerging policy agenda in the postapartheid era the data contained in this analysis would not appear to support the beliefs either that wages should be reduced or that the state should refrain from actively affecting allocative decisions

global inequality and international trade the paper analyses the effect of widespread trade liberalisation on global income inequality the analysis of the trend in global inequality during 1981 97 presented in the first part of the paper shows that the apparent growth of income inequality among countries conceals a process of convergence some developing countries achieved significantly faster economic growth than the advanced industrialised countries and though small in number they actually account for a majority of the population of the developing world thus international inequality i e the inequality of distribution of per capita incomes among the world s population in fact declined even though the inter country income inequality increased the analysis in the second part of the paper shows i that while improved trade performance did have a stimulating effect on growth performance of countries trade liberalisation had extremely varied effects on trade performance across countries and ii that the distribution of benefits and costs of trade liberalisation across countries has been such as to reduce international inequality without affecting inter country inequality copyright 2004 oxford university press

efficiency of lowest unmatched price auctions in lowest unmatched price auctions lupa all participants pay a bidding fee and the lowest bid placed by only one participant wins many lupas do not specify what happens with the item on offer if there is no unmatched bid the item may remain with the auctioneer which may appear unfair given that the auctioneer collects the bidding fees we show that in a symmetric nash equilibrium of a lupa with known prize both players and the auctioneer will have an expected profit of zero moreover lupas may be seen as a value revealing mechanism

changing labor market conditions and economic development in hong kong the republic of korea singapore and taiwan china in the newly industrializing economies nies of hong kong the republic of korea singapore and taiwan china the entire working population has benefited from labor market institutions the east asian nies attained and maintained generally full employment improved their job mixes raised real earnings and lowered their rates of poverty this article reaches two principal conclusions first labor market conditions continued to improve in all four economies in the 1980s at rates remarkably similar to their rates of aggregate economic growth second labor market repression was not a major factor in the growth experiences of these economies in the 1980s it thus appears that labor market repression is neither necessary nor desirable for outward oriented economic development

industrialisation and the factor content of latin american exports of manufactures this article shows that latin american exports of manufactures that grow consistently over time arise from both traditional as well as policy induced sources of comparative advantage case studies for argentina colombia and venezuela show that manufactures originally developed for the domestic market were exported with consistent growth rates and came to represent an important proportion of total manufacturing exports the study also shows that inter country differences in the factor content of these exports reflect both differences in original resource endowments as well as the effects of industrialisation policy

trade liberalisation and poverty what are the links this paper asks whether a developing country s own trade liberalisation could translate into increased poverty and what information would be required to identify whether it will do so it plots the channels through which such effects might operate identifying the static effects via four broad groups of institutions households distribution channels factor markets and government and the dynamic issues of volatility long term economic growth and short term adjustment stresses an increase in the price of something a household sells labour good service increases its welfare thus the paper first explores the likely effects of trade liberalisation on the prices of goods and services taking into account the distribution sector also critical is whether trade reform creates or destroys markets trade reform is also likely to affects factor prices of which the wages of the unskilled is the most important for poverty purposes if reform boosts the demand for labour intensive products it boosts the demand for labour and wages and or employment will increase however not all developing countries are relatively abundant in unskilled labour and trade can boost demand for semi skilled rather than unskilled labour hence poverty alleviation is not guaranteed trade reform can affect tariff revenue but much less frequently and adversely than is popularly imagined even if it does it is a political decision not a law of nature that the poor should suffer the resulting new taxes or cuts in government expenditure opening up the economy can reduce risk and variability because world markets are usually more stable than domestic ones but sometimes it will increase them because stabilisation schemes are undermined or because residents switch to riskier activities the non poor can generally tide themselves over adjustment shocks from a liberalisation so public policy should focus on whether the initially poor and near temporary setbacks the key to sustained poverty alleviation is economic growth there is little reason to fear that growth will not boost the incomes of the poor similarly while the argument that openness stimulates long run growth has still not been completely proven there is every presumption that it will

measuring the maturity of carbon market in china an entropy based topsis approach abstract in this study we construct an evaluation index system in terms of three dimensions including internal external and interface factors we propose an entropy based topsis model to measure the maturity of carbon market the proposed model uses the entropy method to objectively weight the indicators and the topsis method to measure the maturity of carbon market taking china s seven pilot carbon markets from 2013 to 2017 as an example the empirical results are that the overall maturity of china s pilot carbon markets is relatively low for the sake of small market size low market effectiveness low market activeness and high price volatility moreover due to the difference in the quotas transaction volume market liquidity and market supporting facilities there are obvious differences in maturities among china s seven pilot carbon markets in 2017 the maturity of hubei market is the highest reaching 0 6146 the maturity of guangdong shenzhen beijing shanghai and tianjin reaches 0 6108 0 5022 0 4351 0 4267 and 0 3888 respectively the maturity of chongqing market is the only 0 3633 at the lowest level what s more from the perspective of maturity evolution trend hubei guangdong and shenzhen fluctuate upward from the market opening to 2017 and steadily rank in the top three shanghai and tianjin show a u shaped growth trend declining from 2013 to 2015 and continuing to rise from 2015 to 2017 beijing shows a fluctuating downward trend from 2013 to 2017 while ranking fourth chongqing ranks relatively low but it shows an escalating trend finally several targeted policy implications are put forward to enhance the maturities of carbon markets

trade policy reform and the competitive response in kwazulu natal province south africa like many other formerly protected economies the liberalization of the external trade regime has placed new competitive pressures on south african enterprises detailed research in over 130 enterprises in the kwazulu natal kzn province of south africa shows the extent to which firms have been able to respond to these new competitive pressures and particularly on their ability to hear and to meet more demanding customers requirements inevitably the response has been varied but there are reasons to be concerned that the pace of adjustment has been suboptimal this reflects imperfections in information markets the challenges poses by the need for new social relations in production and the limited implementation of new supply sided policies designed to compensate firms for the reduction in protective barriers

income inequality and fdi evidence with turkish data abstractthis article explores how foreign direct investment fdi and other determinants impact income inequality in turkey in the short and long run we apply the nonlinear auto regressive distributed lag ardl modelling approach which is suitable for small samples the data for the study cover the years from 1970 to 2008 the empirical results indicate the existence of a co integration relationship among the variables with asymmetric adjustment of the income distribution in the short and long run the negative impact of fdi on the gini coefficient decreasing income inequality is statistically significant in the short and long run though with a quantitatively small impact in both cases in the short run gdp growth increases inequality initially an effect that is reversed in the next period increases in domestic gross capital formation decreases inequality and increases in the literacy rate have very minor adverse effects on income equality however in the long run these variables have no sta

gambling by auctions abstract we provide theoretical and empirical analysis of a selling mechanism used by an internet web site that combines important features of auctions and gambling this is the first analysis of such a selling mechanism which provides insights into how the two kinds of behavior might be related in real life the winner of the object is the bidder with the highest bid not submitted by any other bidder in the equilibrium of our game theoretical model each bid made with positive probability yields the same probability of winning bidders are more likely to submit higher bids and the bid distribution does not depend on the value of the object or the highest bid allowed if one controls for the number of bidders most of these key theoretical predictions are confirmed by the data

trade and wage inequality local versus global comparative advantages this paper shows that disentangling the local and global dimensions of trade can be crucial to get a better understanding of the trade impact on wage inequality in particular it allows us to reconcile the empirical evidence with the heckscher ohlin samuelson predictions our focus here is on italy as for local trade within its own cone of diversification italy is specialised in the production of unskill intensive goods while for global trade with respect to the other cone of diversification it is mainly specialised in the production of skill intensive goods on the evidence of these specialisation patterns we point out that the local trade has a strong impact on wage inequality in particular in line with the heckscher ohlin samuelson predictions the local export performance reduces wage inequality as it favours blue collar workers as for global trade it affects and increases wage inequality through the export channel again consistent with the heckscher ohlin samuelson predictions

low wage manufacturing and global commodity chains a model in the unequal exchange tradition the institutional setting of subcontracted manufacturing has a profound impact on how the benefits of trade are distributed this paper develops a model that combines insights from unequal exchange theorists and global commodity chain analysis to clarify the distributive dynamics of production networks in which subcontracting and branding are defining features in this framework the ability of productivity growth to increase income from exports is constrained and depends on how the benefits of productivity improvements are captured as lower consumer prices or higher rents for brand name multinationals increasing consumption in affluent consumer markets raises export earnings however developing countries acting alone are constrained in their ability to affect the demand side of global commodity chains instead supply side policies to support industrial upgrading represent a more viable option for raising incomes copyright 2006 oxford university press

the latte revolution regulation markets and consumption in the global coffee chain abstract coffee is a truly global commodity and a major foreign exchange earner in many developing countries the global coffee chain has changed dramatically as a result of deregulation new consumption patterns and evolving corporate strategies from a balanced contest between producing and consuming countries within the politics of international coffee agreements power relations shifted to the advantage of transnational corporations a relatively stable institutional environment where proportions of generated income were fairly distributed between producing and consuming countries turned into one that is more informal unstable and unequal through the lenses of global commodity chain analysis this paper examines how these transformations affect developing countries and what policy instruments are available to address the emerging imbalances

formalizing the informal sector in a changing south africa small scale manufacturing on the witwatersrand abstract this paper examines a recent south african policy initiative aimed at assisting small mainly informal black traders and manufacturers by providing facilities assistance and a comparatively deregulated work environment in desegregated industrial parks outside the black urban townships the impact on these businesses has been generally positive thus far with some dramatic improvements recorded it is necessary however to understand these efforts to semi formalize the informal sector within the broader south african context during the 1980s the state and major capitalist interests sought to modernize apartheid not least by promoting the evolution of a sizable black middle class this process is currently becoming even more crucial as the struggle to secure the continued dominance of capitalist relations of production in postapartheid south africa intensifies

governance of global value chains in response to food safety and certification standards the case of shrimp from vietnam summary we use global value chain gvc theory to understand governance of vietnam s shrimp farming industry we describe this gvc as buyer driven with important food safety standards imposed by governments of importing countries and new certification systems promoted by nongovernmental organizations ngos governance relations are clear between governments in importing countries and vietnam and between importers and ngos governance relations become more fragmented further down the chain where large numbers of small scale producers and traders operate this fragmentation may adversely affect access to the most lucrative markets and have the unanticipated effect of marginalizing small scale farmers and traders

trade openness and wage inequality evidence for malaysia this article examines the impact of trade openness on wage inequality in malaysia during the period 1984 1997 malaysia has operated a very open trade regime since the 1960s and has pursued aggressive import substitution and export supporting policies this development strategy is very different to that adopted in many other emerging economies where trade liberalisation has been associated with greater wage inequality the aim of the present study is to examine whether malaysia s more open approach to international trade has had a similar effect on wage inequality the results suggest in fact that this is not the case

trade technology and employment in south africa abstract south africa has become increasingly integrated with the global economy since the early 1990s and particularly after the ending of apartheid however this has not been associated with increased employment and high levels of unemployment are a major economic and social problem the paper considers the impact of trade and technological change on both the level and skill composition of manufacturing employment first a chenery type decomposition analysis of employment change is carried out and then labour demand functions are estimated econometrically both trade and technology are found to have had a negative impact on employment but these are only partial explanations of the low rate of employment growth

an optimization model for renewable energy generation and its application in china a perspective of maximum utilization in response to climate change china s power industry is undertaking the task of reducing carbon emissions renewable energy generation has become an important option for the government and state grid companies it is important to know the maximum possible capacities of renewable energy generation from its different sources in order to plan the construction of the power grid in the future in this paper several important factors affecting the development of renewable energy generation are identified through a review of the existing literature such as cost technical maturity and so on and analyzed combined with the learning curve model the technology diffusion model and expectations about future economic development in china a new model the renewable energy optimization model reom is developed to analyze the development of three renewable energy sources wind power solar power and biomass power from 2009 to 2020 results show that 1 the maximum installed capacities of wind power solar power and biomass power will reach 233321 26680 and 35506 mw in 2020 2 from 2009 to 2020 biomass power will develop rapidly at the early stage while wind power is developed massively at the final stage and solar power has relatively stable growth 3 due to the added capacity in the early periods the unit investment cost of solar power shows a large decline which is good for its following scale development 4 the investment ratio constraint has a large effect on the development of wind power while the constraint of on grid proportion of renewable energy generation has a significant effect on the development of wind power and solar power the results have important policy implications for long term energy planning in developing countries such as china and india

the impact of china on latin america and the caribbean summary the rapid growth of china and its increased integration with the global economy is having both direct and indirect effects on the latin american and caribbean region the paper focuses on the impacts of china on latin american trade and foreign direct investment flows it identifies the main channels through which china s growth is affecting the region and undertakes a preliminary analysis of the impacts on development it is shown that there are winners and losers in the region both at the country and sector level

assessing the design of three carbon trading pilot programs in china abstract to help overcome the challenge of growing co2 emissions china is experimenting with market based instruments including pilot co2 emissions trading systems etss in seven regions that serve as precursors of a national co2 ets implementing an ets in a rapidly growing economy in which government authorities exercise significant control over markets poses many challenges this study assesses how well three of the most developed pilot etss in guangdong shanghai and shenzhen have adapted carbon emissions trading to china s economic and political context we base our study on new information gathered through interviews with local pilot ets regulators and experts analysis of recent trading data and extensive legal and literature reviews we point out instances in which pilot regulators have deftly tailored carbon emissions trading to china s unique context and instances in which designs are insufficient to ensure smooth operation we also indicate areas in which broader institutional reforms of china s political economy may be required for carbon emissions trading to operate successfully we make nine recommendations to improve the design and operation of the pilot programs and to inform the construction of a national co2 ets

the impacts of liquidity dynamics on emissions allowances price different evidence from china s emissions trading pilots abstract the liquidities of china s emissions trading markets have significant impacts on emissions allowances price movement and pricing efficiency liquidity measures on illiquidity ratio and trade values indicate hubei emissions allowances hbea product has the highest liquidity shenzhen allowances sza and guangdong emissions allowances gdea products have the higher liquidity than beijing emissions allowances bea and shanghai emissions allowances shea products while tianjin emissions allowances tjea product has the lowest market liquidity in considered china s emissions trading pilots the dynamics of the illiquidity ratios for all selected emissions allowances products are negatively related with emissions allowances returns and trade volumes for bea tjea sza and hbea products are also negatively related with emissions allowances returns the dynamics of daily illiquidity ratios and trade based liquidity in beijing tianjin guangdong shenzhen hubei emissions pilots have significant volatility clustering impacts on the variances of regional emissions allowances returns previous market shocks of overnight and intraday price variations have the more persistent influences on the gdea returns than hbea returns reflecting greater inter day price ranges clustering effect

manufactured exports of developing countries and their terms of trade since 1965 abstract during the last 40 years since the prebisch singer terms of trade deterioration hypothesis was first proposed the commodity composition of exports of developing countries has undergone a major change in the direction of dominance of manufactures in their nonfuel exports with strong growth in the volume of their manufactured exports but this did not allow developing countries to escape unequal exchange relations with the industrial countries their barter terms of trade in manufactures showed signs of weakness rather than improvement and clearly failed to reflect the respective productivity trends leading to deterioration in factoral terms of trade

collective efficiency growth path for small scale industry this study is concerned with the growth of small local industry in developing countries and explores one particular route for understanding and fostering such growth it focuses on the clustering of firms and the competitive advantage which they derive from local external economies and joint action captured in the concept of collective efficiency following a conceptual discussion the article explores the economic and institutional conditions which enhance or hinder collective efficiency this includes a case study which suggests that responding to opportunity and crisis requires shifting from mere reliance on external economies to joint action and from ascribed to earned trust

income distribution factor endowments and trade openness abstract this paper studies the empirical links among factor endowments trade and personal income distribution by using panel data we show that land and capital intensive countries have a less equal income distribution while skill intensive countries have a more equal income distribution we also show that the effects of trade openness on inequality depend on factor endowments in a way consistent with several recent case studies but not with the simple hecksher ohlin framework our results are robust to the division of the sample according to level of income the inclusion of different regressors the use of different measures of trade openness and of relative factor abundance and tests for possible problems of endogeneity

south south trade and skill premia contrary to the predictions of the 2 2 2 heckscher ohlin model empirical evidence shows that the skill premium increased in some developing countries and decreased in others after trade liberalisation this paper attempts to reconcile the empirical evidence with the theoretical predictions by introducing a model where south south trade can produce the observed patterns of skill premia in the south in this context south south trade expands the import range of the country that reduces the tariff this increases the demand for and the cost of skilled workers in the other country this also leads the country that reduces the tariff to expand its export range and reduce its import range therefore the country that reduces the tariff experiences an increase in its export range which leads to an increase in the skill premium as the impact on the import range is ambiguous it is possible that the other country experiences a decline in the skill premium thus trade liberalisation between southern countries can cause an increase in the skill premium in one and a decrease in the skill premium in another

lowest unmatched price auctions lowest unmatched price auctions lupas specify that the lowest bid placed by only one participant wins they are used in internet trading and tv and radio shows we model lupas as games with minimal restrictions in particular allowing players to place more than one bid since multiple bids have been observed in most actual lupas though lupas are games for which a closed form solution does not seem to exist in general our model generates several testable implications about the type of strategies played in equilibrium and the highest bid in a given lupa our analysis suggests that players follow strategic considerations and arrive at decisions which at least in the aggregate are generally consistent with theoretical predictions yet there are some remarkable deviations

trade liberalisation in brazil creating or exporting jobs using the growth accounting and factor content approaches this article looks at the impact of trade liberalisation on the structure and level of employment in brazil over the 1990 97 period the results support the argument that trade liberalisation in developing countries have a negative short term impact on employment relatively small in brazil s case which tends to be outweighed in the long run by a more labour intensive output mix

the price is right but are the bids an investigation of rational decision theory the television game show the price is right is used as a laboratory to conduct a preference free test of rational decision theory in an environment with substantial economic incentives it is found that contestants strategies are transparently suboptimal in response to this evidence simple rules of thumb are developed that are shown to explain observed bidding patterns better than rational decision theory further learning during the show reduces the frequency of strategic errors this is interpreted as evidence of bounded rationality finally there is no evidence that a concern for fairness significantly alters bidding behavior copyright 1996 by american economic association

the impact on electric power industry under the implementation of national carbon trading market in china a dynamic cge analysis abstract as the largest carbon emissions source sector electric power industry is undoubtedly a principal part of the carbon trading market in china aimed at researching the impact on power industry beyond establishing the national carbon trading market a dynamic computable general equilibrium cge model embedded with carbon trading block is introduced in this paper subsequently we design 8 scenarios of which illustrate corresponding industry carbon emissions baselines and free quotas ratios the main simulation results are as follows the implementation of carbon emissions trading would bring a certain negative impact on the overall economy real gdp will be reduced by about 0 08 0 52 in 2030 though low free quotas ratio will cause a relatively high loss of gdp this negative impact would be eliminated in the long run in addition carbon emissions trading would also promote the clean production of electricity indeed the electric power industry would reach carbon emissions peak around 2020 relative to scenarios without carbon trading carbon emissions would reduce more than 1000 million tons in 2030 when industry carbon emissions baseline declines at an annual rate of 2 consequently the carbon market can achieve a more significant reduction in carbon emissions with the influencing of quotas fully auctioned scenario

on the impact of financial development on income distribution time series evidence financial market development is said to have equalizing or unequalizing effects on income distribution previous research used cross sectional and panel data and provided mixed results suspecting that they suffer from aggregation bias we adhere to time series data and error correction modeling technique and address the issue one more time in each of the 17 countries for which we have time series data in 10 counties short run effects of financial market development on income distribution were found to be equalizing in five countries the effects were unequalizing however the equalizing effects lasted into the long run only in three countries of denmark kenya and turkey

is there a social kuznets curve the influence of labour standards on inequality abstract this study empirically investigates the impact of core labour standards on income inequality for a range of 90 countries from 1990 2000 a synthetic index of labour standards is computed by means of a multiple correspondence analysis and no significant correlation is found with the gini index one of the reasons pointed out is that the effective implementation of core labour standards depends on the quality of the country s political and legal systems using instrumental variables in a tsls model we found an inverse u shaped curve between the new endogenous index of core labour standards and income inequality

changes in wage structure in urban india 1983 2004 a quantile regression decomposition summary this paper utilizes individual level earnings data from urban india to examine the evolution of wages during 1983 2004 across the entire wage distribution quantile regression analysis reveals that the effects of many covariates are not constant across distribution returns to secondary and tertiary education not only increased in the 1990s but also became more heterogeneous suggesting wage inequality may increase further in near future as more workers get higher education moreover the quantile regression decomposition suggests that the increase in returns has been the driving force behind the increase in wages in both the 1980s and 1990s

export processing zones in the dominican republic transforming manufactures into commodities this paper examines the performance of export processing zones in the dominican republic it shows that in specializing in unskilled labor intensive export processing in the context of competitive devaluations between central american countries the dominican republic has experienced immiserizing employment growth in these circumstances the export of labor intensive manufactures is akin to that of primary commodities exporting countries which rely on unskilled labor and which fail to make the transition to higher value added production exports are thus likely to experience declining terms of trade the conclusions of this case study are considered to have wider relevance to world bank and international monetary fund inspired structural adjustment programs in the region

trade institution quality and income inequality summary we examine the effect of trade on income inequality in small developing countries we use two well accepted trade cost variables for identification one is based on baltic dry index and another is commodities price index our main finding is that trade leads to a significant reduction increase in income inequality in autocracies democracies to explain such different effects we provide supporting evidence that autocracies export more primary commodities and may follow the stolper samuelson theorem in ho framework while democracies active in manufacturing outsourcing may follow feenstra and hanson 1996 task model

the globalization of product markets and immiserizing growth lessons from the south african furniture industry the central issue addressed in this paper is whether some developing countries will find it difficult to compete effectively in global product markets and will therefore be locked into processes of immiserizing growth it focuses on the role of south african producers in the global furniture value chain analyzing the factors affecting firm upgrading particularly the role of global buyers the paper observes a global industry characterized by increased competition and falling unit prices with local firms dependent on a falling exchange rate it concludes with implications for policy and future research including generalizing the findings to other sectors and countries

how china s current carbon trading policy affects carbon price an investigation of the shanghai emission trading scheme pilot abstract to better establish a unified carbon market in china this study evaluates the effect of current carbon trading policy and further investigates the relationship between such policy that is published during the second phase of shanghai environment and energy exchange seee and shanghai emission allowance shea price we aim to analyze whether these policies can improve the operation efficiency of current carbon market by the mean reversion test cox ingersoll ross cir model and event study method we first analyze the potential price discovery function of shea products thereby describing the transmission channel of current policy to shea price then we examine the effect of carbon policies published in different periods on their corresponding shea price by the auto correlation test and cir simulation we find that 3 4 of all auto correlation values are less than 0 after apr 2017 and the minimum cumulative error is 31 3792 under the supply and demand channel these findings imply that shea price has the discovery function at the middle and end of trading period and the current policy affects shea price through its effect on the fundamentals of supply and demand further more than 60 of all r values r value that reflects the response of price to policy are less than 1 which implies that the published policy will improves future shea price accordingly we argue that seee belongs to a policy oriented market and the change of carbon price is closely related to emission allocation policies in this case china s government should further push forward the smooth operation of current carbon market by the aid of incentive policy in the coming period

a picture of wage inequality and the allocation of labor through a period of trade liberalization the case of brazil this paper constructs a picture of the labor market impact of trade liberalization in brazil we examine the level and dispersion of wages the skilled wage premium and employment composition before and after trade liberalization after trade reform there was a rise in the returns to college education which since the share of college workers also rose is attributable to rising demand this change did not increase overall wage dispersion because of the small share of college educated workers and because of decreasing returns to intermediate levels of education

channels and policy debate in the globalization inequality poverty nexus the process of globalization has led to a much greater integration of the world economy the flows of trade capital labour technology and information across national borders have accelerated since the 1980s and created an environment conducive to faster economic growth and transmission of knowledge it is evident that the forces of globalization provide a strong potential for a major reduction in poverty in the developing world however for a number of reasons brought out in this chapter the positive impact of globalization on poverty alleviation worldwide has not been as substantial as one might have expected in this chapter we explore structural factors and policies within the world economy and national economies that impede the full transmission of the benefits of the various channels of globalization to poverty reduction

assessing the operational performance and maturity of the carbon trading pilot program the case study of beijing s carbon market on november 28 2013 beijing s carbon emissions trading opened on beijing s environmental exchange as one of the pilot cities beijing has been pursuing low carbon development strategies under state intervention and market regulation this paper chooses the carbon market a medium through which beijing manages emission reduction as the object of study firstly we compare the basic construction circumstances of beijing with other pilot cities then we qualitatively analyze the development of beijing s carbon market from the perspective of transaction status execution of the contract and improvement of the policies and regulations finally we use the topsis model to develop a comprehensive evaluation system of beijing s carbon market it is used to quantitatively evaluate the operational performance and maturity of the mechanism the results show that beijing s carbon market has good comprehensive capabilities ranking second place among seven pilot markets but the maturity of beijing s carbon market is relatively poor for insufficient market liquidity its operations are well managed but economic efficiency still need to be improved the depth of transaction and the effect of reduction in emissions make it meaningful therefore in order to improve the construction of beijing s carbon market measures should be taken as follows 1 strengthening the quota management and increasing carbon trading activity to avoid poor market liquidity 2 accelerating emission reduction actions and encouraging technology innovation such as carrying out several policies and measures supporting new energy and energy saving emission reduction and increasing investment and subsidy in research and development for the technology innovation of firms etc 3 improving regulatory mechanism and enhancing the disclosure of carbon trading such as drawing lessons from the eu emission trading scheme ets about measuring reporting and verification system mrv

spurred to upgrade a review of triggers and consequences of industrial upgrading in the global value chain literature summary the global value chains gvc literature intervenes in today s challenging development context by focusing on the means by which developing country industries can upgrade their market positions and outcomes for workers yet while this literature has produced hundreds of rich empirical case studies there has to date been no attempt to systematically analyze this case literature for lessons regarding the antecedents and consequences of the key outcome of upgrading this paper undertakes a systematic analysis of a representative sample of 45 case studies of primary product and light manufacturing industries in developing countries these studies were coded for factors involved in initiating and sustaining upgrading processes the results of upgrading and the role of local institutions in these processes we find that contrary to the major assumptions of the literature advanced country buyers are not the main force in the initiation of industrial upgrading rather in most cases developing country firms initiate upgrades when pushed by shocks of market vulnerability usually produced by state policies that force them to seek to change their status quo operations once initiated upgrading processes can produce a wide spectrum of results from little to no advancement in market position treadmilling to vaulting to the forefront of a global industry leaps forward on the basis of the sources of learning present in the local institutional environment such as state agencies and business associations we also identify conditions under which state participation in upgrading processes can lead to increased local institutional capacity together these findings suggest a framework for upgrading that we refer to as an induced search model this model has important implications for future research on the dynamics of industrial upgrading in developing countries techniques of state intervention and processes of mutually supportive learning between actors in the public and private sector

calm after the storms after rising during most but not all ofthe 1960 85 period inequality in chile seems to have stabilized since around 1987 following the stormy period of economic and political reforms of the 197

globalization and the death of the local firm the automobile components sector in south africa barnes j and kaplinsky r 2000 globalization and the death of the local firm the automobile components sector in south africa reg studies 34 797 812 as in the case of many developing countries south african industry is facing a new competitive environment as trade barriers fall this involves both the need to enter external markets and to cope with new entrants in the domestic market in the case of the south african automobile assembly industry responding to this new global environment has increasingly meant that domestic subsidiaries are being integrated into the global strategic operations of their parent companies this is increasingly leading them to the foreign sourcing of components in part because of perverse and unintended consequences of the motor industry development plan where local production of components is involved there is decreasing space for locally owned component suppliers and almost no space for component suppliers using local technology south african component supplie

globalization and the decline of the welfare state in less developed countries why have trends in government welfare spending in developing countries diverged from those in developed countries i address this question by investigating the effects of capital and trade flows on government welfare spending in fifty three developing countries using an original measure of labor power in developing countries i test the links between international markets labor s political strength and the welfare state i argue that labor s collective action problems caused by large populations of low skilled and surplus workers offset labor s potential political gains from globalization i show that when the proportion of low skilled workers in a nation is high globalization will lead to a decline in welfare spending most significantly the results suggest that in nations where labor market institutions are not yet well developed government social welfare spending is constrained by international market forces

the double edged sword of legitimacy in base of the pyramid markets as compared to developed countries a much higher proportion of entrepreneurs within base of the pyramid bop markets operate unregistered businesses prior research has suggested that the primary cause of such informal activity in these settings is the general failure of weak institutions to provide sufficient resources to warrant formalization we attempt to extend such thinking by deconstructing the discrete and inter related effects of formal business registration on the level of resources obtained by entrepreneurs from financial labor and legal institutions within bop markets using a multi method approach involving 299 entrepreneurs within guatemala city our results suggest that being seen as a legitimate registered business can actually lead to both increased resource provision and resource appropriation more specifically adhering to the norms and rules prescribed by regulatory institutions within weak legal environments can convey positive signals of stability and profitability that both attract the desired attention from formal institutional actors as well as unwanted attention from criminals

economic policy changes and wage differentials in latin america abstract this article presents estimates of the impact of changes in liberalization policies on wage differentials by schooling level using a new high quality data set for 18 latin american countries for 1977 98 the method controls for all fixed and time varying country characteristics some of which may affect the policies themselves the results indicate that liberalizing policy changes overall have had a short run disequalizing effect of expanding wage differentials although this effect tends to fade away over time this disequalizing effect is due to the strong impact of domestic financial market reform capital account liberalization and tax reform however privatization contributed to narrowing wage differentials and increasing trade openness had no significant effect on wage differentials technological progress rather than trade flows appears to be a channel through which policy changes are affecting inequality

globalization and upgrading what can and cannot be learnt from international trade statistics in the wood furniture sector the measurement of innovation is a complex and ambiguous challenge two broad families of measures have been used those focusing on inputs and those focusing on outputs each has its strengths and weaknesses but neither is able to capture the growing importance of product innovation adequately in this paper we attempt to throw more light on the measurement of product innovation through the complementary use of data on unit price and market share the analysis is distinctive through its exclusive use of trade data these measures are applied to the global furniture industry through an analysis of imports into the eu between 1989 and 2001

globalisation history and development a tale of two centuries this paper situates globalisation in historical perspective to analyse its implications for development it sketches a picture of globalisation during the late nineteenth and twentieth centuries a comparison of these two epochs reveals striking parallels unexpected similarities and important differences it shows that globalisation did not lead to rapid growth and economic convergence in the world either then or now indeed growth slowed down and income levels diverged while the gap between the industrialised and developing countries widened in both epochs the story of globalisation it turns out does not conform to the fairy tale about convergence and development

quantifying value chain analysis in the context of livestock systems in developing countries the analysis of value chains has augmented our knowledge on the complexities inter linkages distributional benefits and institutional arrangements of production and marketing channels in developing countries however the analysis remains relatively qualitative and case specific with limited ability to rank or assess the impact of alternative interventions or to analyze sufficiently the complex market dynamics and feedbacks present in livestock systems this paper offers theoretical and applied insights on ways to improve the analytical rigor of the value chain methodology that combines both qualitative and quantitative approaches

the transition to flexible specialisation in the us film industry external economice the division of labour and the crossing of industrial divides there is increasing evidence that mass production methods are losing their dominance in the advanced industrial economies and that various forms of flexible production organization are on the rise the transition from mass production organization to flexible specialization is analyzed in detail through a case study of the film industry where it is shown that a system of production once based on product standardization high levels of vertical integration and stable oligopolistic market structures has after a period of vertical disintegration given way to a production system based on a deep division of labor between firms and high levels of flexibility in both product design and output levels the transition may be the result of increasing external economies of scale stemming from the development of the industry s social division of labor copyright 1989 by oxford university press

the personal and the factor distributions of income in a cross section of countries abstract the shares of capital and labour in national income vary substantially both over time and across countries this paper shows that the factor distribution of income is an essential determinant of the personal distribution of income we use cross country and panel data for a group of developed and developing countries to show that a larger labour share is associated with a lower gini coefficient of personal incomes this effect is not only statistically significant but also economically important an increase in the labour share in mexico to that observed in the us would reduce the gini coefficient of the former by between two and five points

revisiting the revisited terms of trade will china make a difference in challenging the conventional wisdom at the time singer and prebisch posited a number of explanations for declining terms of trade of developing economies including both country and product specific factors over the past decade we have begun to witness a simultaneous process of price differentiation within commodities with the prices of some commodities increasing and within manufacturing with the price of many manufactures falling these price changes may reverse the decline in the terms of trade of commodity producers the entry of china into the global market has played an important role in this augmenting the demand for many hard commodities its role as an exporter of manufactures coupled with concentration in global buying may undermine the prices of many manufactures

a natural experiment in jeopardy this paper uses the television game show jeopardy as a natural experiment to analyze behavior under uncertainty and the ability of players to choose strategic best responses the results suggest that while most players bet in a rational manner the failure rate for choosing best responses increases as the betting problem grows more complex and that players choices are affected by the frame of the problem however suboptimal betting tends to decrease as inferior players are driven from the game the data also allow for estimation of the extent of risk aversion the results imply near risk neutrality jel c72 c93

a disaggregated analysis of eu imports the implications for the study of patterns of trade and technology this paper examines trends in the unit prices of manufactured imports into the european union eu in the period 1988 2002 this is undertaken at a high level of disaggregation and it is this decomposition which we believe has important implications both for a range of bodies of economic analysis and for policy the analyses undertaken in this paper confirm that disaggregation matters in helping to identify unit price trends we have also shown that unit price trends vary with the type of economy exporting into europe and the type of product being exported and that these results are robust at high levels of disaggregation

learning from global buyers an increasing number of developing countries engage in contract manufacturing for a decreasing number of global buyers this constellation characterises many labour intensive export sectors the positioning of developing country enterprises in such buyer driven chains is central to research concerned with identifying the winners and losers from globalisation this study contributes to this debate by seeking answers to two questions first what can researchers learn from global buyers about the relative strengths and weaknesses of developing country producers second what can these producers learn from global buyers and what circumstances facilitate or constrain such learning