unequal vulnerability to climate change and the transmission of adverse effects through international trade in this paper we consider the unequal distribution of climate change damages in the world and we examine how the underlying costs can spread from a vulnerable to a non vulnerable country through international trade to focus on such indirect effects we treat this topic in a north south trade overlapping generations model in which the south is vulnerable to the damages entailed by global pollution while the north is not we show that the impact of climate change in the south can be a source of welfare loss for northern consumers in both the short and the long run in the long run an increase in the south s vulnerability can reduce the welfare in the north economy even in the case in which it improves its terms of trade in the short run the south s vulnerability can also represent a source of intergenerational inequity in the north therefore we emphasize the strong economic incentives for non vulnerable and a fortiori less vulnerable economies to reduce the climate change damages on more vulnerable countries

examining the impact of manufacturing and marketing capacity decisions on firm profitability this research through the use of a functionally integrative performance model prod cust examines the impact of 18 priority sequencing rules on the allocation of constrained and excess production capacity the research offers several propositions regarding manufacturing and marketing decisions e g customer mix product mix cost price capacity customization market dynamics and their relation to capacity allocation and profitability and attempts to reveal strategies under varying conditions which maximize profit impact

reap what you sow agricultural technology urbanization and structural change abstract this paper studies how productivity enhancing agricultural technology affects urbanization by provoking structural change we investigate these issues using a natural experiment in the united states the results show that technologies which improve crop productivity lead to a less urbanized economy as economic activity relocates from manufacturing and services towards agriculture the effects are highly persistent and are driven by the technology increasing agricultural labor demand our findings highlight the potentially unintended disruptive force of innovative technologies

weather variations and international trade in this paper i investigate the effect of weather variations in the exporter and importer countries separately as well as a the difference between weather variations in both countries on bilateral trade flows the analysis is done at the country sectoral and product levels worldwide and over the 1992 2014 period i find a negative effect of temperature variations in the exporter country and in the difference between exporter and importer countries on bilateral trade at the country level at the product level both negative and positive effects arise but the negative effect of temperature dominates the temperature effects are on the agricultural and manufacturing sectors especially in the textile and metals sectors i show that possible channels are the impact of temperature on output and labour productivity the negative impacts are larger in exporter countries that are closer to the equator that have lower quality of institutions and that export to more remote countries if countries are able to adapt to climate change the long term effects of temperature variations should be lower than the contemporaneous effect nevertheless my results on the long term effects analysis do not support this hypothesis suggesting no or very low adaptation moreover the negative effect of temperature is persistent and cumulative through several years after the temperature shock concerning precipitation variation effects they are found mainly at the product level with the positive effect dominating for the affected products

trade and the greenhouse gas emissions from international freight transport we collect extensive data on worldwide trade by transportation mode and use this to provide detailed comparisons of the greenhouse gas emissions associated with output versus international transportation of traded goods international transport is responsible for 33 percent of world wide trade related emissions and over 75 percent of emissions for major manufacturing categories including transport dramatically changes the ranking of countries by emissions per dollar of trade we systematically investigate whether trade inclusive of transport can lower emissions in one quarter of cases the difference in output emissions is more than enough to compensate for the emissions cost of transport finally we examine how likely patterns of global trade growth will affect modal use and emissions full liberalization of tariffs and gdp growth concentrated in china and india lead to transport emissions growing much faster than the value of trade due to trade shifting toward distant trading partners

what accounts for the growth of carbon dioxide emissions in advanced and emerging economies the role of consumption technology and global supply chain participation abstract this paper examines the driving forces behind the growth in carbon dioxide emissions in forty advanced and emerging economies between 1995 and 2008 we use the global supply chain concept introduced in timmer et al 2014 to measure co2 emissions in internationally fragmented production networks and embed the concept in structural decomposition analysis our findings suggest that rising levels of domestic consumption are related to increased carbon dioxide emissions in both advanced and emerging economies a substantial share of co2 emissions growth in emerging economies is accounted for by increased participation in global supply chains however even for countries that rapidly integrated in global production networks such as china rising domestic consumption accounts for the majority of territorial emissions

the social costs of second best policies evidence from agricultural ghg mitigation abstract this paper investigates the social costs of second best agricultural greenhouse gas ghg mitigation policies adjustments along the land use and input intensity margins are represented within a regionalized optimization model of california crop production calibrated to economic and agronomic information second best policies relying on spatially aggregated ghg emission factors lead to small abatement efficiency losses while policies targeting a single ghg lead to moderate losses in contrast policies targeting a single input entail large abatement efficiency losses which nonetheless can be reduced by combining instruments

market segmentation self selection and product line design the purpose of this paper is to develop a theory of market segmentation based on consumer self selection the extant theory is based on the third degree price discrimination model of pigou central assumptions of which are that the firm can directly address individual segments and isolate them by using consumer self selection i am relaxing these assumptions in the context of a monopolist designing a product line i show that this relaxation has significant implications for how the products and prices are chosen and what they look like in particular segments may be aggregated even though there are no economies of scale furthermore consumer self selection enables us to model cannibalization and competition among firms

transfer pricing and economic functions analysis the japanese paradigm this paper examines the difficulties facing tax authorities in valuing cross border flows from a transactions based analysis in conditions where intangibles and services are important and where the multinational firm concerned is operating a system in which group wide economic functions dominate decision making its key contention is that the economic functions of any entity should be examined in order to determine whether transactions analysis can be used to produce an acceptable value this is done in the particular context of japanese multinational enterprises and uses two hypothetical situations to demonstrate the inadequacy of transactions based analysis as a panacea for transfer pricing problems especially for transfers of value involving intangibles and services which it redefines into two categories perceptible and imperceptible

design and evaluation of a dynamic capacity apportionment procedure abstract deploying a decision theory based approach we develop a heuristic for short term constrained capacity allocation to multiple product classes in make to order manufacturing attempting to maximize profit by discriminating between product classes efficacy of the heuristic is evaluated by comparing its performance to a base case and an upper bound under a wide variety of operational conditions such as variations in profit attractiveness capacity tightness customer order size structure customer order rate structure and demand coefficient of variation considering three different scenarios of time variant order rate of products the results indicate that the heuristic is effective in obtaining increased profit when capacity is very tight and products are well differentiated on average it yields an increase of 9 38 in total profit with a concomitant decrease of 0 85 in capacity utilization the results of this study serve to highlight the value of proactively seeking to differentiate products particularly when demand exceeds capacity

evolving comparative advantage and the impact of climate change in agricultural markets evidence from 1 7 million fields around the world a large agronomic literature models the implications of climate change for a variety of crops and locations around the world the goal of the present paper is to quantify the macro level consequences of these micro level shocks using an extremely rich micro level data set that contains information about the productivity both before and after climate change of each of 10 crops for each of 1 7 million fields covering the surface of the earth we find that the impact of climate change on these agricultural markets would amount to a 0 26 percent reduction in global gdp when trade and production patterns are allowed to adjust since the value of output in our 10 crops is equal to 1 8 percent of world gdp this corresponds to about one sixth of total crop value

unilateral co2 reductions and carbon leakage the consequences of international trade in oil and basic materials a recursively dynamic general equilibrium model featuring six world regions with trade in energy and non energy goods is used to simulate the period from 1990 through 2100 in 10 year intervals the simulations explore the effect of unilateral action by the oecd to curb global co2 emissions unilateral cuts create incentives for free riding by non participating regions so that global emissions are reduced by less than the amount that the oecd cuts back its regional emissions carbon leakage occurs through two channels first basic materials production increases in unconstrained regions resulting in increased carbon intensity of gdp second reductions in oecd oil imports cause the world oil price to fall leading to an increased energy intensity in the non participant regions in this paper we use a general equilibrium model to assess the extent to which these two mechanisms reduce the effectiveness of oecd reductions in curbing global co2 concentrations

climate change and agriculture the role of international trade predictions of future climate and atmospheric conditions are reviewed and the implications for agriculture in different areas of the world are identified the swopsim static world policy simulation model used to evaluate the worldwide economic effects of climate change is described an economic sensitivity analysis of concurrent yield losses in major grain producing regions considering the possibility of concurrent changes in production potential elsewhere in the world is reported agricultural impacts of climate change based on three general circulation models are evaluated

climate change policy market structure and carbon leakage abstract the 1997 kyoto protocol on climate change obliges the industrialized countries to initiate the international effort of abating anthropogenic greenhouse gas ghg emissions if such an initiative is to be taken the associated competitive effects may lead to significant relocation of developed countries energy intensive production this paper examines this issue i adopt an oligopolistic structure combined with increasing returns to scale production technologies to represent the strategic interaction among the firms producing energy intensive products this representation is then embedded within a multi regional computable general equilibrium model which in turn is used for quantifying these relocational effects the results suggest that significant relocation of energy intensive industries away from the oecd may occur depending on the type of market structure with leakage rates as high as 130 in which case ghg control policies in the industrialized countries actually lead to higher global emissions

trade and carbon taxes we study various scenarios for taxing emissions of carbon dioxide c02 the question is how carbon tax policies will perform given interna tional trade if countries adopt different tax rates we investigate this question quantitatively using cim earth a newly developed open source computable general equilibrium cge model since climate change is a function of global c02 emissions an efficient strategy for control ling emissions would be to impose the same price wherever they occur such an approach presents a free riding problem however because nations have an incentive not to comply while gaining the ben efits of reduced emissions elsewhere moreover because of distributive concerns and claims about

research needs and challenges in the few system coupling economic models with agronomic hydrologic and bioenergy models for sustainable food energy and water systems on october 12 13 a workshop funded by the national science foundation was held at iowa state university in ames iowa with a goal of identifying research needs related to coupled economic and biophysical models within the few system approximately 80 people attended the workshop with about half representing the social sciences primarily economics and the rest from the physical and natural sciences the focus and attendees were chosen so that findings would be particularly relevant to sbe research needs while taking into account the critical connectivity needed between social sciences and other disciplines we have identified several major gaps in existing scientific knowledge that present substantial impediments to understanding the few system we especially recommend research in these areas as a priority for future funding 1 economic models of decision making in coupled systems deliberate human activity has been the dominant factor driving environmental and land use changes for hundreds of years while economists have made great strides in modeling and understanding these choices the coupled systems modeling literature with some important exceptions has not reflected these contributions several paths forward seem fruitful first baseline economic models that assume rationality can be used much more widely than they are currently moreover the current generation of iams that include rational agents have emphasized partial equilibrium studies appropriate for smaller systems to allow this approach to be used to study larger systems the potential for and consequences of general equilibrium effects should be studied as well second it is important to address shortcomings in these models of economic decision making valuable improvements could be gained from developing coupled models that draw insights from behavioral economics many decision makers deviate systematically from actions that would be predicted by strict rationality but very few iams incorporate this behavior potentially leading to inaccurate predictions about the effects of policies and regulations improved models of human adaptation and induced technological change can also be incorporated into coupled models particularly for medium to long run models decisions about adaptation and technological change will have substantial effects on the conclusions and policy implications but more compelling methods for incorporating these changes into modeling are sorely needed in addition some economic decisions are intrinsically dynamic yet few coupled models explicitly incorporate dynamic models economic models that address uncertainty in decision making are also underutilized in coupled models of the few system 2 coupling models across disciplines despite much recent progress established models for one component of the few system often cannot currently produce outcomes that can be used as inputs for models of other components this misalignment makes integrated modeling difficult and is especially apparent in linking models of natural phenomena with models of economic decision making economic agents typically act to maximize a form of utility or welfare that is not directly linked to physical processes and they typically require probabilistic forecasts as an input to their decision making that many models in the natural sciences cannot directly produce we believe that an especially promising approach is the development of bridge models that convert outputs from one model into inputs for another such models can be viewed as application specific reduced form distillations of a richer and more realistic underlying model ideally these bridge models would be developed in collaborative research projects involving economists statisticians and disciplinary specialists and would contribute to improved understanding in the scientific discipline as well 3 model validation and comparison there is little clarity on how models should be evaluated and compared to each other both within individual disciplines and as components of larger iams this challenge makes larger integrated modeling exercises extremely difficult some potential ways to advance are by developing statistical criteria that measure model performance along the dimensions suitable for inclusion in an iam as well as infrastructure and procedures to facilitate model comparisons focusing on the models out of sample distributional forecasting performance as well as that of the iam overall is especially promising and of particular importance moreover applications of iams tend to estimate the effect of hypothetical future policy actions but there have been very few studies that have used these models to estimate the effect of past policy actions these exercises should be encouraged they offer a well understood test bed for the iams and also contribute to fundamental scientific knowledge through better understanding of the episode in question the retrospective nature of this form of analysis also presents the opportunity to combine reduced form estimation strategies with the iams as an additional method of validation

global economic growth and agricultural land conversion under uncertain productivity improvements in agriculture we study how stochasticity in the evolution of agricultural productivity interacts with economic and population growth at the global level we use a two sector schumpeterian model of growth in which a manufacturing sector produces the traditional consumption good and an agricultural sector produces food to sustain contemporaneous population agriculture demands land as an input itself treated as a scarce form of capital in our model both population and sectoral technological progress are endogenously determined and key technological parameters of the model are structurally estimated using 1960 2010 data on world gdp population cropland and technological progress introducing random shocks to the evolution of total factor productivity in agriculture we show that uncertainty optimally requires more land to be converted into agricultural use as a hedge against production shortages and that it significantly affects both optimal consumption and population trajectories

on the spatial economic impact of global warming we propose a dynamic spatial theory to analyze the geographic impact of climate change agricultural and manufacturing firms locate on a hemisphere trade is costly firms innovate and technology diffuses over space emissions from energy used in production contribute to the atmospheric stock of carbon which increases temperature warming differs across latitudes and its effect on productivity varies across sectors we calibrate the model to analyze how climate change affects the spatial distribution of economic activity trade migration growth and welfare we assess quantitatively the impact of migration and trade restrictions energy taxes and innovation subsidies

skill transferability migration and development evidence from population resettlement in indonesia we use a natural experiment in indonesia to provide causal evidence on the role of location specific human capital and skill transferability in shaping the spatial distribution of productivity from 1979 1988 the transmigration program relocated two million migrants from rural java and bali to new rural settlements in the outer islands villages assigned migrants from regions with more similar agroclimatic endowments exhibit higher rice productivity and nighttime light intensity one to two decades later we find some evidence of migrants adaptation to agroclimatic change overall our results suggest that regional productivity differences may overstate the potential gains from migration