international competition and real wages myriad politicians express concern over increased competition from abroad but among economists the home economy is widely believed to benefit from improvement in foreign economies jeffrey williamson 1991 work by a few economists john r hicks 1953 ronald jones 1979 paul krugman 1979 suggests that there is some truth to popular concerns over competitiveness the effect of foreign competition in reducing the relative price of the goods that the united states formerly exported can lower aggregate real income in the united states even as world income rises accordingly the success of japan western europe and more recently many other nations in producing goods that were as of the end of world war ii virtual monopolies of the united states is another potential candidate for explaining the fall relative to trend of the average living standard or real wage in the united states

occupation and the political economy of trade job routineness offshorability and protectionist sentiment the recent backlash against globalization in many advanced economies raises questions about the source of this protectionist sentiment traditional accounts generally attribute the welfare consequences of trade to skill level or industry characteristics or instead emphasize the nonmaterial determinants of support for openness consequently we know little about how a major labor market characteristic occupation shapes both the distributional consequences of and preferences toward trade openness we propose and test a new theory of trade policy preferences based on occupation characteristics drawing from the tasks literature in economics we argue that occupation characteristics are a key determinant of how trade affects workers and thus individuals trade preferences our theory suggests that in advanced economies individuals in routine task intensive occupations will be negatively affected by trade and thus more protectionist this relationship will increase in the degree to which occupation job tasks can be provided from a distance i e offshorable we find support for our theory using data from the 2003 and 2013 international social survey programme in high income democracies our results suggest that the occupational characteristics of routineness and offshorability are important determinants of trade preferences offering additional understanding of the sources of protectionist sentiment even after controlling for labor market characteristics suggested by conventional wisdom

a theory of voting equilibria a voting equilibrium arises when the voters in an electorate acting in accordance with both their preferences for the candidates and their perceptions of the relative chances of various pairs of candidates being in contention for victory generate an election result that justifies their perceptions voting equilibria always exist and the set of equilibria can vary substantially with the choice of voting system we compare equilibria under the plurality rule approval voting and the borda system we consider a candidate positioning game and find that the plurality rule imposes little restriction on the position of the winning candidate in three candidate races while approval voting leads to a winner positioned at the median of the voter distribution we contrast campaign activities intended to influence voter preferences with activities meant to influence only perceptions of candidate viability

ex day behavior tax or short term trading effects this study examines the behavior of share prices around the ex dividend dates before and after the introduction of the 1988 income and corporation taxes act that reduced substantially the tax differential between dividends and capital gains in the united kingdom we find that in the pre 1988 period when the differential taxation of dividends and capital gains is high ex day returns are positive and significant in contrast in the post 1988 period ex day returns are in most cases negative and insignificant further analysis reveals that while ex day returns are significantly related to dividend yield and to the length of the settlement period they are not affected by the commonly used measures of transaction costs such as the bid ask spread and trading volume or by the day of week month of the year type of dividend distribution or number of days to the actual receipt of the cash dividend we conclude that taxation affects significantly ex day share prices in the previous studies have documented that the risk adjusted abnormal returns on the ex dividend dates are positive and significantly related to the dividend yield the interpretation of these findings is however controversial the question relates to what category of investors sets ex day prices elton and

sense and surprise in competitive trade theory 2010 weai presidential address i introduction the competitive theory of international trade is well known for its abundance of paradoxes perhaps the most widely known is the leontief paradox associated with the rather startling results presented by leontief 1953 that the trade pattern of the united states suggested that its export sectors were more labor intensive than factor proportions found in its import competing sectors this result stimulated decades of research but is not the focus of the present paper other so called paradoxes include the metzler 1949 result wherein a country levying a tariff on an imported item may end up with a lowering of its domestic price that is a tariff may not be protective 1 lerner 1936 who earlier hinted at the metzler outcome emphasized the possibility that a tariff might instead worsen a country s terms of trade which is at the opposite extreme to the metzler result both of these paradoxes are attributed to possible income effects in demand more recently income effects stemming from asymmetry in demand patterns among countries were shown to open the door to paradoxical results if one country makes a transfer to another in a world in which other countries are also engaged in trade in the same commodities the surprising results the giver in the transfer might end up better off i e it may pay to give rather than to receive and or the recipient of the transfer may end up worse off 2 finally a classic result that does not depend on asymmetries in taste patterns but rather upon the degree of elasticity in demand and the nature of growth is the question of whether a country that unequivocally grows transformation schedule shifts out can be made worse off as a consequence of growth the so called immiserizing growth paradox 3 this is an issue familiar to particular sectors of the economy for example agriculture can a good harvest yield lower returns because of the subsequent price fall instead of revisiting these familiar paradoxes here i wish to concentrate on the production side of competitive models used in international trade and to focus on the question involving ways of judging economic models clearly the question of realism often comes up whether it is in terms of assumptions made or of outcomes expected here i suggest a different criterion does the model conform in many ways to common sense that is would one be tempted to suggest that the model is not necessary because common sense would lead to the same results and if it does do the outcomes in certain scenarios seem to be paradoxical or surprising if so can the model reveal in simple terms why these somewhat surprising results make sense 4 i shall restrict myself to a pair of basic models of production used in competitive trade theory the specific factors model on the one hand and the heckscher ohlin model on the other i shall argue that in many ways both conform to common sense but in addition provide the very tools that expose the underlying rationale for surprise ii a preliminary question consider any economy that is characterized by competitive markets and constant returns to scale technology suppose for such an economy there is an increase in the factor endowment bundle to fix on an example suppose there is an increase in the economy s labor force the very general question i wish to ask is how does such an economy absorb this increased endowment to maintain full employment of all factors note that if this economy is not engaged in international trade there will likely result a change in commodity prices as they adjust in order to equilibrate local supply and demand given the points i wish to make later let me assume that the country is engaged in free trade with the rest of the world if this economy were particularly small world prices could be taken as given even if world prices are disturbed it is legitimate to ask how the economy absorbs the extra supplies before any change in commodity prices takes place

strategic competition in sequential election contests this paper studies a sequential election contest such as theamerican presidential primary in which several electionsoccur one at a time until a single winner emerges theconventional wisdom is such a system benefits a candidatefavored in the initial elections because of momentum thispaper uncovers a potentially opposing force if participationis costly and candidates exit when they have unfavorablefuture prospects a candidate with friendly elections at theend of the contest will typically benefit from the resultinggame theoretic competition tension between this strategic effect and momentum helpsexplain several empirical regularities of presidentialprimaries

on some effects of international fragmentation of production on comparative advantages trade flows and the income of countries in traditional trade models whether based on technological differences or on relative factor endowments merchandise composition and directions of trade are derived from closed economy conditions but nowadays one of the basic assumptions of traditional trade models i e that production processes are integrated within just one country is being increasingly violated as previously integrated productive activities are segmented and spread over an international network of production sites as a result an increasingly large share of trade flows is made up of intermediate and unfinished goods being transferred from one country to another in order to be processed in this paper we submit that such new configuration of production processes has important effects on at least three dimensions of economic research first we show that international disintegration of production processes leads to a lessening of the power of comparative advantages when it comes to explaining both merchandise composition and directions of trade while it is the concept of absolute advantage to become increasingly relevant second we show that empirical measures of revealed comparative advantages are inherently misleading if they do not account for differences in the stage of processing of traded goods third we estimate a simple model of aggregate demand accounting for international trade in intermediates results of estimation lend support to our prior that participation of a country in the process of international fragmentation of production plays a specific and significant role in determining its year over year change in gdp

globalization and competitive strategies in european vulnerable regions affuso a capello r and fratesi u globalization and competitive strategies in european vulnerable regions regional studies this paper highlights the role played by structural economic features and industrial competitive strategies in the performance of a group of european regions defined as vulnerable because of their specialization in industries particularly exposed to international trade different growth patterns emerge among them the most successful regions are those with a strong presence of high value added functions of best performing vulnerable sectors but also with high structural funds expenditure on human resources moreover among the industrial strategies analysed it is found that the only winning strategy explaining higher productivity gains is industrial reconversion at the expense of employment growth affuso a capello r et fratesi u la mondialisation et les strategies competitives des regions europeennes vulnerables regional studies cet article cherche a souligner le rol

labour s reward across regions of the eu a distributional dynamic approach a large number of empirical studies have tested for the presence of convergence for a variety of economic variables this paper examines the evolution of labour s reward across regions of the eu to identify whether factor price convergence has occurred density diagrams are used to illustrate static distributions while transitional matrices are employed to identify movements of the distribution over time the results presented suggest that the evolutionary paths of average regional pay are fairly stable with stratification and persistence identified as important characteristics there was uninterrupted convergence of average regional pay between 1980 1992 however between 1992 1994 this process reversed

the aaea ever growing and changing research challenges the changing economic conditions over the past century along with changes in technology and developments in economic theory and quantitative methods helped shape the profession we currently refer to as agricultural and applied economics the broadening of the profession from the original focus on the farm and agricultural industry to encompass international affairs governmental policies resources and environmental and rural affairs is discussed within this context emergence of the subdisciplines and some of the major individual contributions are noted the final section argues that members of the profession are well positioned to continue contributing research that will help society achieve its goals and notes six challenges that provide such opportunities

primaries and the new hampshire effect candidates for u s presidential elections are determined through sequential elections in single states the primaries we develop a model in which candidates can influence their winning probability in electoral districts by spending money on campaigning the equilibrium replicates several stylized facts very well campaigning is very intensive in the first district the outcome of the first election then creates an asymmetry in the candidates incentives to campaign in the next district which endogenously increases the equilibrium probability that the first winner wins in further districts on the normative side our model oers a possible explanation for the sequential organization it leads in expectation to a lower level of advertising expenditures than simultaneous elections moreover if one of the candidates is the more eective campaigner sequential elections also perform better with regard to the selection of the best candidate

momentum and social learning in presidential primaries this paper investigates social learning in sequential voting systems in the econometric model candidates experience momentum effects when their performance in early states exceeds expectations the empirical application uses daily polling data from the 2004 presidential primary we find that kerry benefited from surprising wins in early states and took votes away from dean owing to these momentum effects early voters had up to five times the influence of late voters in the selection of candidates and this helps to explain the distribution of advertising expenditures finally we use the estimated model to conduct two counterfactual experiments

why vote for losers voting theory generally concludes that in first past the post elections all votes should go to effective candidates duverger s law and parties should adopt a similar platform median voter theorem however such predictions are not always met in practice we show why divergence and vote dispersion is a natural outcome when a parties are opportunistic b there is uncertainty on the position of the median voter and c elections are repeated voting for losers increases the informational content of elections and may induce mainstream parties to relocate towards extremists as a result to maximize their probability of being elected they do not adopt median

the technology transfer paradox abstract this paper examines whether a country that enjoys a superior technology in all commodities in a two country multi commodity ricardian setting could actually gain if its technology in which it possesses its greatest comparative advantage is stolen or transferred to the other country without any compensation such a paradoxical possibility is shown always to exist with a finite number of commodities and equal shared cobb douglas demand conditions for certain ranges of relative country size

taxes and dividends the uk evidence abstract this paper provides empirical evidence on the simultaneous effects of both corporation and personal income taxes on dividend payment adjustments and on the behaviour of share prices on the ex dividend dates the results show that companies set their dividend policies to minimise their tax liability and to maximise the after tax return of their shareholders in particular firms that are unable to deduct the advanced corporation tax from their tax liability are found to pay low dividends in addition consistent with the tax hypothesis we find that the differential taxation of dividends and capital gains results in a decrease in ex day share prices by significantly less than the amount of the dividend there is no evidence of a tax induced dividend clientele

a model of pre electoral coalition formation abstract in many countries three or more candidates compete against one another in single office elections i present a model of three candidates competing for a single office in which two candidates can form a coalition prior to the election a pre electoral coalition since the candidates are both policy and office motivated one candidate can incentivize the other candidate to withdraw his candidacy by choosing a joint policy platform i examine how electoral environments such as election rules ideological distance and pre election polls influence incentives to form pre electoral coalitions i find that pre electoral coalitions are more likely to form i in plurality elections than in two round runoff elections ii as the threshold for first round victory decreases in two round runoff elections iii as the two potential coalition partners ideological distance increases conditional on divided support and iv as the fraction of office value which is transferable increases moreover i analyze and compare voter welfare under plurality and the two round runoff rules

the dangerous obsession with cost competitiveness and the not so dangerous obsession with competitiveness judging solely by the continued prevalence of the term in policy makers discourse paul krugman s now famous warnings as to the dangerous obsession of competitiveness have fallen on deaf ears in this paper i argue that this is at least in part because policy makers as distinct perhaps from business school gurus never understood competitiveness in quite the manner he assumed i suggest that krugman largely misdiagnosed the problem of competitiveness directing us to the link between competitiveness and protectionism that was always less prevalent and more tenuous than he imagined as a consequence he overlooked other more pertinent and problematic aspects of the discourse of competitiveness that persist relatively unchallenged in spite of his warnings more specifically i seek to show that krugman s understanding of competitiveness is insufficiently differentiated and rests on inferences drawn from an overly stylised model of competition for market share in product markets that exhibit a high demand price elasticity and in which success is associated exclusively with strategies of cost containment as i show through a series of extensions to his model this leads him to fail to see that it is the privileging of cost competitiveness specifically rather than the pursuit of competitiveness per se that is the dangerous obsession from which we most need protecting today

offshoring administrative and technical work new fields for understanding the global enterprise in this paper we introduce the journal of international business studies special issue on offshoring administrative and technical services ats in doing so we have attempted to locate the topic within the international business research tradition as well as suggest challenges and opportunities that the phenomenon offers to theoretical and empirical research in the field we examine the interplay of costs knowledge and innovation in the evolution of ats offshoring from modest beginnings to its current stature as an accepted business practice we suggest that understanding the continuing evolution of ats offshoring requires researchers to take into account not only the business imperative of cost saving but also a more complex set of underlying factors and potential outcomes we argue that the rapid growth of ats offshoring has brought about an accumulation of resources including financial flows knowledge infrastructure and human capital to create new platforms for knowledge creation and innovation low costs may characterize the initial conditions for offshoring but they also provide the basis for up market moves as firms increasingly pursue innovation based strategies we introduce the papers in the special issue as integral elements in our discussion contributing new ideas that stimulated our thinking and hopefully will do the same for others seeking to understand this emerging area of globalization and international managerial practice journal of international business studies 2009 40 887 900 doi 10 1057 jibs 2009 22

sequential or simultaneous elections a welfare analysis this paper contributes to a debate over a key question in the design of electoral systems should all voters go to the polling booth on the same day or should elections be staggered with late voters observing the choices of early voters before making their decisions using a model of voting and social learning we identify a key trade obetween simultaneous and sequential elections in particular sequential election systems place too much weight on the preferences and information of early states but also provide late voters with information that is valuable in terms of selecting high quality candidates under simultaneous elections voters equally weigh the available information but place too little weight on the information in aggregate and thus place too much weight on their priors given this trade o either sequential or simultaneous elections might be welfare preferred we provide a quantitative evaluation of this trade obased upon an application to the 2004 presidential primary the results suggest that simultaneous systems outperform sequential systems although the dierence in welfare is relatively small

comparative advantage and the welfare impact of european integration this paper investigates the welfare gains from european trade integration and the role of comparative advantage in determining the magnitude of those gains we use a multi sector ricardian model implemented on 79 countries and compare welfare in the 2000s to a counterfactual scenario in which east european countries are closed to trade for west european countries the mean welfare gain from trade integration with eastern europe is 0 16 ranging from zero for portugal to 0 4 for austria for east european countries gains from trade are 9 23 at the mean ranging from 2 85 for russia to 20 for estonia for eastern europe comparative advantage is a key determinant of the variation in the welfare gains countries whose comparative advantage is most similar to western europe tend to gain less while countries with technology most different from western europe gain the most andrei a levchenko and jing zhang

price level co movements within currency unions an alternative integration metric this paper analyses currency union integration by testing whether price levels in member countries possess a common stochastic trend the trace statistic test for cointegration proposed by johansen 1995 demonstrates the presence of such a trend for most unions a disaggregated analysis identifies a common stochastic trend for several though fewer than half of country pairs within a union some unions such as the eurozone have small shares of cointegrated country pairs yet the share of cointegrated country pairs is large relative to countries outside currency unions comparison to a control group country pairs where one country belongs to a given union and the other country does not indicates that the cointegration found within a currency union is a union specific trait and not a feature of the individual countries within the union these results provide an alternative metric to intraunion trade for gauging the extent of currency union integration

the production life cycle tasks in production have different dynamics in comparison with individual products we build a general equilibrium model where three forces offshoring learning and wage interact to determine how production fragmentation evolves over time we show that the production process follows a life cycle its fragmentation emerges deepens and converges our model is stylized and versatile which can be used to tractably characterize the loci of global output productivity welfare and value added distribution as production fragmentation progresses this article is protected by copyright all rights reserved

service offshoring and firm employment abstract major technological advances have recently spurred a new wave of offshoring in services which used to be non tradable should service workers in developed countries worry about their jobs trade theory has given a nuanced answer to this question suggesting that efficiency gains from offshoring may counteract direct job losses which leaves the predicted net effect ambiguous this paper investigates the employment effects of service offshoring in a newly combined and exceptionally detailed panel dataset covering almost the entire universe of german firms service imports over the years 2001 2013 it exploits firm specific export supply shocks by partner countries and service types as an instrumental variable to find that service offshoring has increased firm employment in line with the canonical trade in tasks model the employment gains are greater in firms with higher initial levels of service offshoring

learning and coordination in the presidential primary system in elections with three or more candidates coordination among like minded voters is an important problem we analyze the trade off between coordination and learning about candidate quality under different temporal election systems in the context of the u s presidential primary system in our model candidates with different policy positions and qualities compete for the nomination and voters are uncertain about the candidates valence this setup generates two effects vote splitting i e several candidates in the same policy position compete for the same voter pool and voter learning as the results in earlier elections help voters to update their beliefs on candidate quality sequential voting minimizes vote splitting in late districts but voters may coordinate on a low quality candidate using the parameter estimates obtained from all the democratic and republican presidential primaries during 2000 2012 we conduct policy experiments such as replacing the current system with a simultaneous system adopting the reform proposal of the national association of secretaries of state or imposing party rules that lead to candidate withdrawal when pre specified conditions are met

manipulation through political endorsements abstract we study elections with three candidates under plurality voting a candidate is a condorcet loser if the majority of the voters place that candidate at the bottom of their preference rankings we first show that a condorcet loser might win the election in a three way race next we introduce to the model an endorser who has private information about the true probability distribution of the preferences of the voters observable endorsements facilitate coordination among voters who may otherwise split their votes and lead to the victory of the condorcet loser when the endorser has an ideological bias towards one of the candidates the coordination impact of endorsements remains unaltered moreover the endorser successfully manipulates the outcome of the election in favor of his bias even if his ideological bias is known by the voters the results are true for any endorsement cost and any magnitude of bias as long as the electorate is large enough

sequential or simultaneous elections a welfare analysis sequential or simultaneous this paper addresses a key question on the design of electoral systems should all voters vote on the same day or should elections be staggered with late voters observing early returns before making their decisions using a model of voting and social learning we illustrate that sequential elections place too much weight on the preferences and information of early states but also provide late voters with valuable information under simultaneous elections voters equally weigh the available information but place too much weight on their priors providing an inappropriate advantage to front runners given these trade offs simultaneous elections are welfare preferred if the front runner initially has a small advantage but sequential elections are welfare preferred if the front runner initially has a large advantage we then quantitatively evaluate this trade off using data based on the 2004 presidential primary the results suggest that simultaneous systems outperform sequential systems although the difference in welfare is relatively small

sequential voting with abstention abstract dekel and piccione 2000 sequential voting procedures in symmetric binary elections j polit economy 108 34 55 have proven that information cascades do not necessarily affect the properties of information aggregation in sequential elections under standard conditions any symmetric equilibrium of a simultaneous voting mechanism is also an equilibrium of the correspondent sequential mechanism we show that when voters can abstain these results are sensitive to the introduction of an arbitrarily small cost of voting the set of equilibria in the two mechanisms are generally disjoint and the informative properties of the equilibrium sets can be ranked if an appropriate q rule is chosen when the cost of voting is small the unique symmetric equilibrium of the simultaneous voting mechanism dominates all equilibria of the sequential mechanism

efficiency equity and timing of voting mechanisms we compare the behavior of voters under simultaneous and sequential voting rules when voting is costly and information is incomplete in many political institutions ranging from small committees to mass elections voting is sequential which allows some voters to know the choices of earlier voters for a stylized model we generate a variety of predictions about the relative efficiency and participation equity of these two systems which we test using controlled laboratory experiments most of the qualitative predictions are supported by the data but there are significant departures from the predicted equilibrium strategies in both the sequential and the simultaneous voting games we find a tradeoff between information aggregation efficiency and equity in sequential voting a sequential voting rule aggregates information better than simultaneous voting and is more efficient in some information environments but sequential voting is inequitable because early voters bear more participation costs

does offshoring of materials and business services affect employment evidence from a small open economy the fear of massive job losses has prompted a fast growing literature on offshoring and its impact on employment in advanced economies this paper examines the situation for belgium it improves the offshoring intensity measure by computing a volume measure of the share of imported intermediates in output and it is among the first to address both materials and business services offshoring to high wage and low wage countries estimations of static and dynamic industry level labour demand equations augmented by offshoring intensities do not reveal a significant impact of either materials or business services offshoring on total employment for belgium between 1995 and 2003

offshore outsourcing decision making a policy maker s perspective this research aims at finding the best governing policy for offshore outsourcing of business activities we use analytical network process a multicriteria decision making methodology to create the evaluation framework from the perspective of decision makers stakeholders and influence groups four policy options are evaluated with respect to approximately 50 economic political technological and other factors the model provides both long term and short term views of the outsourcing issue concerned to all parties the all inclusive approach helps policy makers to decide on the best policy and has the potential to ease tension between proponents and opponents of offshore outsourcing

the evolution of comparative advantage measurement and welfare implications using an industry level dataset of production and trade spanning 75 countries and 5 decades and a fully specied multi sector ricardian model we estimate productivities at sector level and examine how they evolve over time in both developed and developing countries we nd that in both country groups comparative advantage has become weaker productivity grew systematically faster in sectors that were initially at the greater comparative disadvantage the global welfare implications of this phenomenon are signicant relative to the counterfactual scenario in which an individual country s comparative advantage remained the same as in the 1960s and technology in all sectors grew at the same country specic average rate welfare today is 1 9 lower at the median the welfare impact varies greatly across countries ranging from 0 5 to 6 among oecd countries and from 9 to 27 among non oecd countries remarkably for the oecd countries nearly all of the welfare impact is driven by changes in technology in oecd countries and for the non oecd countries nearly all of the welfare impact is driven by changes in technology in non oecd countries

bandwagons and momentum in sequential voting in this paper i show that an equilibrium exists to the sequential voting game in which a bandwagon begins with probability 1 these bandwagons are driven by a combination of beliefs and the desire of voters to vote for the winning candidate significantly in this equilibrium the pivot probability for each voter is non zero even in an infinite population consequently the bandwagons do not always start after one or at most two favourable decisions as do economic cascades and varying levels of informative voting are observed consistent with observations from sequential voting in u s presidential primaries further voters are exposed to counterintuitive incentives referred to as buyers remorse that have been attributed to real primary voters i also derive equilibrium behaviour in this environment when voting is simultaneous and compare the quality of information aggregation within each mechanism i relate the conclusions to u s presidential primaries and find they are consistent with a common conclusion about the front loading of the primary process that in tight elections with no front runner simultaneous voting is preferred whereas in lopsided elections sequential voting is preferred the superior performance of sequential voting in lopsided races is precisely because bandwagons occur copyright 2007 wiley blackwell

voting as communicating this paper develops a model where voters trade off two different motives when deciding how to vote they care about current decision making they are strategic but they also care about communicating their views about their most preferred candidate so as to influence future elections by influencing other voters opinion and or party positioning in effect voters in this model are intermediate between strategic and sincere voters of conventional models in elections with more than 2 candidates this allows us to better investigate the relative efficiency of various electoral systems our main conclusion is that since voting is used as a communication device electoral systems should be designed to facilitate efficient communication e g by opting for 2 round systems rather than 1 round systems

achieving fair trade through a social tariff regime a policy thought experiment this paper pursues a fair trade policy thought experiment that i presents the social index tariff structure sits regime and ii simulates a multilateral sits regime using bilateral trade flow data a sits regime seeks to promote strong labour and environmental standards and other initiatives that engender human development equality and sustainability it does this by institutionalising both the incentives and means for countries to enhance their performance in these areas we demonstrate that a multilateral sits regime would generate substantial and stable flows of development funds while incentivising an international race to the top in labour and environmental standards and more broadly in human development equality and sustainability

where ricardo and mill rebut and confirm arguments of mainstream economists supporting globalization most noneconomists are fearful when an emerging china or india helped by their still low real wage rates outsourcing and miracle export led developments cause layoffs from good american jobs this is a hot issue now and in the coming decade it will not go away prominent and competent mainstream economists enter into the debate to educate and correct warm hearted protestors who are against globalization here is a fair paraphrase of the argumentation that has been used recently by alan greenspan jagdish bhagwati gregory mankiw douglas irwin and economists john or jane doe spread widely throughout academia yes good jobs may be lost here in the short run but still total u s net national product must by the economic laws of comparative advantage be raised in the long run and in china too the gains of the winners from free trade properly measured work out to exceed the losses of the losers this is not by mysterious fuzzy magic but rather comes from a sharing of the trade induced rise in total global vectors of the goods and services that people in a democracy want never forget to tally the real gains of consumers alongside admitted possible losses of some producers in this working out of what schumpeter called creative capitalist destruction correct economic law recognizes that some american groups can be hurt by dynamic free trade but correct economic law vindicates the word creative destruction by its proof sic that the gains of the american winners are big enough to more than compensate the losers

the politics and economics of offshore outsourcing abstract this paper reviews the political uproar over offshore outsourcing connected with the release of the economic report of the president erp in february 2004 examines the differing ways in which economists and non economists talk about offshore outsourcing and assesses the empirical evidence on the importance of offshore outsourcing in accounting for the weak labor market from 2001 to 2004 even with important gaps in the data the empirical literature is able to conclude that offshore outsourcing is unlikely to have accounted for a meaningful part of the job losses in the recent downturn or contributed much to the slow labor market rebound the empirical evidence to date while still tentative actually suggests that increased employment in the overseas affiliates of us multinationals is associated with more employment in the us parent rather than less

what do chinese macro announcements tell us about the world economy we examine the effect of scheduled macroeconomic announcements made by china on world financial and commodity futures markets all announcements related to chinese manufacturing and industrial output move stock markets energy and industrial commodities as well as commodity currencies news about chinese domestic consumption leaves most markets unaffected suggesting that market participants view the announcements primarily as a signal of the state of the global economy rather than merely of china s domestic demand the market response to unexpectedly strong output announcements is not consistent with investors being concerned about tightening of chinese macroeconomic policy instead the world markets view strong chinese output as a rising tide that lifts all boats jel classification e44 g14 g15

investing in socially responsible companies is a must for public pension funds because there is no better alternative with assets of over us 1 0 trillion and growing public pension funds in the united states have become a major force in the private sector through their holding of equity positions in large publicly traded corporations more recently these funds have been expanding their investment strategy by considering a corporation s long term risks on issues such as environmental protection sustainability and good corporate citizenship and how these factors impact a company s long term performance conventional wisdom argues that the fiduciary responsibility of the pension funds trustees must be solely focused on their beneficiaries and therefore their investment criteria must be based strictly on narrowly defined financial measures it is also asserted that well established financial measurements of corporate performance already include long term risk assessment through discounted present value of future flow of earnings consequently all other criteria are contrary to the best interest of the pension funds beneficiaries in this paper we assert that contrary to conventional wisdom pension funds and for that matter other mutual funds must be concerned with the long term survival and growth of corporations these measures are generally referred to socially responsible investing sri and when applied to corporations it is termed socially responsible corporate conduct srcc we demonstrate that current measurement of future risk assessment invariably understates and quite often completely overlooks these long term risks because of the inherent bias towards short run on the part of financial intermediaries whose compensation depends greatly on short term results furthermore there is ample evidence to suggest that these intermediaries have been engaging in self serving practices and thus failing in their duties to serve their clients i e pension funds best interests because of their large holdings in the total market as well as individual companies these funds cannot easily divest from poorly performing companies without destabilizing the companies stock and overall markets hence they must opt for a strategy of emphasizing investment criteria that encourage companies to take into account long term aspects of their operations in terms of their impact on environment sustainability and community welfare to name a few we argue that an exclusionary and even a primary focus on short term financial criteria is no longer a viable option it also calls for the pension funds to encourage greater transparency and accountability of the entire corporate sector through improved corporate governance thus socially responsible investing practices are not merely discretionary and desirable activities they are a necessary imperative which both the corporations and public pension funds and other large institutional holders will ignore at serious peril to themselves finally the paper considers some of the recent developments where corporations have been responding to these challenges and how their actions might be strengthened through greater disclosure and transparency of corporate activities it also makes recommendations for the pension funds to support further research in creating new measurement standards that further refine the concept of socially responsible investing as a necessary ingredient of long term corporate survival and growth in the context of a changing economic environmental and socio political dynamic

investor tax rationality and the relationship between dividend yields and equity returns an explanatory note abstract recently in this journal it is contended that the empirically observed relationship between stock returns and dividend yields cannot be reconciled with tax rationality in response this present note re examines the theoretical basis for this conclusion we conclude that the empirical evidence of market behavior may at present be interpreted as consistent with investor tax based rationality that capitalizes the firm s earnings on an after personal tax basis

altruism and voting a large turnout result that does not rely on civic duty or cooperative behavior abstract i propose a game theoretic model of costly voting that predicts significant turnout rates even when the electorate is arbitrarily large the model has two key features that jointly drive the result i some agents are altruistic or ethical ii among the agents who prefer any given candidate the fraction of altruistic agents is uncertain when deciding whether to vote or not an altruistic agent compares her private voting cost with the expected contribution of her vote to the welfare of the society under suitable homogeneity assumptions the asymptotic predictions of my model coincide with those of feddersen and sandroni 12 up to potential differences between the respective parameters that measure the importance of the election i demonstrate with an example that these homogeneity assumptions are not necessary for qualitative predictions of my model i also show that when the fractions of altruistic agents are known turnout rates will typically be close to zero in a large election despite the presence of altruism

on the theory of strategic voting many analyses of plurality rule elections predict the complete coor dination of strategic voting and hence support for only two candidates here i suggest that stable multi candidate support will arise in equilibrium a group of voters must partially coordinate behind one of two challenging candidates in order to dislodge a disliked incumbent in a departure from existing models the popular support for each challenger is uncertain this support must be inferred from the private observation of informative signals such as the social communication of pref erences throughout the electorate or the imperfect observation of opinion polls the uniquely stable voting equilibrium entails only limited strategic voting and hence incomplete coordination this is due to the surprising presence of negative feed back an increase in the degree of strategic voting by others reduces the incentives for an individual to vote strategically the incentive to vote strategically is lower in relatively marginal elections after controlling for the distance from contention of a trailing preferred challenger a calibration of the model applied to the uk general election of 1997 is consistent with the impact of strategic voting and the reported accuracy of voters understanding of the electoral situation it suggests that nearly 50 seats may have been lost by the conservative party due to strategic voting 1 plurality rule elections and strategic voting 1 1 strategic voting and duverger s law plurality rule elections where the winner is the candidate who receives the largest number of votes are vulnerable to strategic voting a voter might well switch away from her preferred candidate and toward a perceived leader in the hope of exerting a greater influence over the outcome of the election this phenomenon has long been the focus of both economic and political scientific study in an influential essay riker 1982b cited droop s 1871 eloquent exposition of the strategic voting problem 1 i oer my grateful thanks to the many friends colleagues seminar participants referees and editors who have oered insightful comments during the long gestation of this paper its antecedents and companion work special thanks go to steve fisher whose empirical analysis of strategic voting raised many of the questions that i seek to answer in this paper and to chris wallace this particular paper brings together much of the analysis previously circulated in the papers a new theory of strategic voting strategic voting under the qualified majority rule and idiosyncrasy information and the impact of strategic voting

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

stability and coordination in duverger s law a formal model of preelection polls and strategic voting this paper investigates the dynamics of the wasted vote phenomenon and duverger s law i construct a theoretical model in order to consider how preelection polls serve to inform the electorate about the relative chances of the candidates and how that information acts over time to decrease the support of the trailing candidate the results shed light on how public opinion polls can aggregate information in the electorate and coordinate voters on the viable candidates in the election specifically i show that in a bayesian game model of strategic voting there exist non duvergerian equilibria in which all three candidates receive votes in the limit these equilibria require extreme coordination however and any variation in beliefs leads voters away from them to one of the duvergerian equilibria thus non duvergerian equilibria are unstable while two party equilibria are not in addition i describe how preelection polls provide information to voters about the viability of candidates and can thus be used by voters to coordinate on a duvergerian outcome

sequential voting in large elections with multiple candidates abstract i analyze strategic voting incentives in large elections with three candidates when voting takes place sequentially voters have perfect information about their private preferences but do not know the distribution from which other voters preferences are drawn if a candidate finishes last in an early voting round voters deduce that this candidate is likely to be less popular amongst the remaining voters and the remaining voters almost always have an incentive to stop voting for this candidate by contrast sincere voting equilibria can exist under either simultaneous voting or an early voting round of sequential voting without knife edge assumptions

ecological economics at a crossroads during the past decade theoretical and empirical advances in neoclassical economics have resulted in the virtual rejection of the two pillars of traditional welfare economics rational economic man and perfect competition surprisingly many ecological economists are moving closer to the discredited neo walrasian welfare model just at the time it is being replaced within the mainstream we call for a return to the roots of ecological economics and an engagement with current developments in mainstream theory this abstract was borrowed from another version of this item

china s economic growth 1978 2025 what we know today about china s economic growth tomorrow summary this paper examines china s future growth prospects and the potential drivers of future growth using two approaches it first asks in how far china s recent economic development matches standard growth patterns identified in development economics and trade theory second gdp is decomposed into income components which in turn are explained for the reform period by the quantity and quality of labor future gdp can then be re composed from future labor data available today overall china s economic growth is likely to continue at current rates through 2015 before it gradually slows such a growth has numerous implications

repatriation taxes and outbound m as repatriation taxes reduce the competitiveness of multinational firms from tax credit countries when bidding for targets in low tax countries this comparative disadvantage with respect to bidders from exemption countries violates ownership neutrality which results in production inefficiencies due to second best ownership structures this paper empirically estimates the magnitude of these effects the abolishment of repatriation taxes in japan and in the u k in 2009 has increased the number of acquisitions abroad by japanese and british firms by 16 1 and 1 6 respectively a similar policy switch in the u s is simulated to increase the number of u s cross border acquisition by 11 0 the yearly gain in efficiency is estimated to be 108 9 million dollar due to the japanese reform and 3 9 million dollar due to the u k reform simulating such a reform for the u s results in a yearly efficiency gain of 537 0 million dollar

estimation of beauty contest auctions beauty contests are auction mechanisms used to buy or sell differentiated products where the auctioneer does not specify a decision rule to pick the winning bidder beauty contests are widely used in procuring welfare to work projects freelance services selling online ads real estate transactions and hiring dating marriage decisions unlike price only auctions beauty contests have no closed form bidding strategies and suffer from nonmultiplicatively separable unobserved auction heterogeneity which makes their estimation challenging to address these challenges we formulate beauty contests as incomplete information games and present a two step estimator a key contribution of our method is its ability to account for common knowledge auction specific unobservables using finite unobserved types we show that unobserved auction types and distributions of bids are nonparametrically identified and recoverable in the first step using a nonparametric expectation maximization em like algorithm and that

service offshoring and productivity evidence from the us the practice of sourcing service inputs from overseas suppliers has been growing in response to new technologies that have made it possible to trade in some business and computing services that were previously considered non tradable this paper estimates the effects of offshoring on productivity in us manufacturing industries between 1992 and 2000 it finds that service offshoring has a significant positive effect on productivity in the united states accounting for around 10 per cent of labour productivity growth during this period offshoring material inputs also have a positive effect on productivity but the magnitude is smaller accounting for approximately 5 per cent of productivity growth