longevity risk subjective survival expectations and individual saving behavior abstract we provide evidence of individuals awareness of longevity risk the uncertainty about future survival probabilities based on subjective survival expectations elicited in the survey of health ageing and retirement in europe share and matching data on longevity risk from the human mortality database we find a positive relationship between the forecast dispersion in subjective survival estimates and longevity risk which indicates that individuals are to some extent aware of longevity risk our analysis of savings behavior shows that the dispersion in survival estimates is primarily explained by individuals disagreeing on the survival probability and not by their true awareness of the underlying uncertainty individuals do not save more on average when faced with longevity risk although theory suggests they should

macroeconomic uncertainty through the lens of professional forecasters abstractwe analyze the evolution of macroeconomic uncertainty in the united states based on the forecast errors of consensus survey forecasts of various economic indicators comprehensive information contained in the survey forecasts enables us to capture a real time measure of uncertainty surrounding subjective forecasts in a simple framework we jointly model and estimate macroeconomic common and indicator specific uncertainties of four indicators using a factor stochastic volatility model our macroeconomic uncertainty estimates have three major spikes has three major spikes aligned with the 1973 1975 1980 and 2007 2009 recessions while other recessions were characterized by increases in indicator specific uncertainties we also show that the selection of data vintages affects the estimates and relative size of jumps in estimated uncertainty series finally our macroeconomic uncertainty has a persistent negative impact on real economic activity rather than producing wait and see dynamics

import price elasticities reconsidering the evidence recent economic geography and trade empirical studies based on monopolistic competition suggest high levels of trade price elasticities between 3 and 1 1 however price elasticity estimations in trade equations using unit values as price proxies usually lead to lower values of around unity we show that those inconclusive results may be due to some misspecification in these equations as well as measurement errors in prices when suit able instrumental variables are used within a panel of industrialized countries we obtain high price elasticities the majority ranging from i to 13 the highest estimates correspond to industries producing homogeneous goods jel classification c2 c3 and f 1

manufactured exports from developing countries and their terms of trade a reexamination of the sarkar singer results abstract sarkar and singer 1991 argue that the terms of trade for exports of manufactures from developing countries dcs like that for their primary commodity exports have manifested a long term trend favoring the importing developed countries we contend here that the authors have not paid adequate attention to appropriately adjusting the data and that they have misinterpreted the results when these limitations are taken into account a sound basis exists for the conclusion that through rapid expansion of manufactured exports dcs as a group have achieved significant gains in import purchasing power without generating adverse impact on the net barter terms of trade

renewable energy policy alternatives for the future the united states has been subsidizing ethanol since 1978 in the last decade a subsidy has been added for biodiesel the ethanol subsidy has ranged from 40 to 60 cents per gallon over the entire time period tyner and taheripour 2007 the ethanol subsidy is currently 51 cents per gallon and the biodiesel subsidy is 50 cents for biodiesel made from recycled materials such as cooking grease or tallow and 1 per gallon for biodiesel made from oilseed crops such as soybeans over the years the objectives for biofuel subsidies have included in

comparison of fixed versus variable biofuels incentives we evaluated several variants of a variable biofuel subsidy and compared them with the fixed subsidy and renewable fuel standard using two different modeling approaches first we used a partial equilibrium model encompassing crude oil gasoline ethanol corn and ethanol by products second we used a stochastic simulation model of a prototypical ethanol plant from the partial equilibrium analysis it appears the variable subsidy provides a safety net for ethanol producers when oil prices are low yet it does not put undue pressure on corn prices when oil prices are high at high oil prices the level of ethanol production is driven by market forces from the plant level stochastic analysis essentially the same conclusions are reached as with the fixed subsidy the variable subsidy can increase the net present value npv sufficiently to encourage investment but with lower risk for the producer lower probability of a loss from the investment and often lower expected cost to government finally in the us the ethanol industry is up against a blending limit called the blend wall if the blending wall remains in place and no way around it is found it does not matter much what other policy options are used

unemployed but optimistic optimal insurance design with biased beliefs biased perceptions of risks change the perceived value of insurance and the per ceived returns to avoiding these risks i show empirically that unemployed workers overestimate how quickly they will nd work but underestimate the return to their search eorts i analyze the consequences for the optimal design of unemployment insurance with biased beliefs contracts equalizing the marginal smoothing ben e t and the moral hazard cost of insurance are suboptimal social and private insurance diverge a paternalistic social planner corrects the moral hazard cost for the distortion in the insured s eort choice while private insurers focus on the perceived rather than the true smoothing bene ts when unemployed workers are optimistic privatizing unemployment insurance may result in ine ciently low or rapidly decreasing unemployment bene ts

the forecast accuracy of individual analysts evidence of systematic optimism and pessimism o brien 1990 examines the annual earnings forecast accuracy of individual analysts reporting to the institutional brokers estimate system ibes of lynch jones and ryan during july 1975 september 1982 using a regression model which adjusts for average firm and year effects o brien finds no evidence of differential forecast accuracy comparing individual analysts earnings forecasts to median consensus forecasts during 1983 86 we also find no statistically significant evidence of differential analyst forecast accuracy our result however does not mean that one analyst s forecasts are much like another s we find that analysts are persistently optimistic or pessimistic relative to consensus forecasts we examine this persistent behavior and its effect on measures of forecast accuracy over a sample

clean air and renewable fuels the market for fuel ethanol in the us from 1984 to 1993 abstract ethanol made from corn has become an increasingly important fuel additive in the us over the past decade the market for ethanol has grown from 550 million gallons in 1984 to approximately 1 5 billion gallons in 1995 recent clean air legislation has mandated the use of cleaner burning fuels in the us in specific regions and seasons the fundamental role of fuel ethanol is changing from a gasoline substitute and octane enhancer to being one of a number of possible clean air additives in addition to these changing market conditions the institutional structure surrounding the ethanol market has changed while there is a uniform national subsidy for ethanol use each state has its own supplemental subsidy level which varied from zero to over 0 40 per gallon recently many state subsidy levels have been declining but significant incentives still remain including the federal 0 54 per gallon incentive this paper explores the economic characteristics of the us ethanol market the market supply and demand for ethanol are estimated econometrically the results highlight the importance of the state and federal incentives and mandates along with transportation costs in making corn based ethanol an attractive alternative to gasoline further investigation using a probit model to predict whether a state has an ethanol market or not reinforces the results of the supply demand market model the implications of the market characteristics for current and future us ethanol policy and clean fuels use are discussed

the relationships among expected inflation disagreement and uncertainty evidence from matched point and density forecasts abstract this paper examines matched point and density forecasts of inflation from the survey of professional forecasters to analyze the relationships among expected inflation disagreement and uncertainty we undertake the empirical analysis within a seemingly unrelated regression framework and derive measures of uncertainty using a decomposition proposed by wallis 2004 2005 and by drawing on the concept of entropy the results offer little evidence that disagreement is a useful proxy for uncertainty and mixed evidence that increases in expected inflation are accompanied by heightened uncertainty conversely we document a quantitatively and statistically significant positive association between disagreement and expected inflation

policy incentives for switchgrass production using valuation of non market ecosystem services abstract this study presents a linear profit model with combined economic and environmental factors for a switchgrass for biofuels agricultural system in the southeastern u s the objectives are to establish conversion to switchgrass thresholds for various market prices and identify policy incentives that would ensure economic profit while also maximizing environmental benefits carbon sequestration displacement of fossil fuels and minimizing negative impacts global warming potential nitrate loss weighting factors are chosen to represent incentives and penalties by assigning value to the impacts with no other incentives switchgrass market prices of at least 51 and 58 dton would be needed in order to make a profitable switch from corn conservation reserve program crp lands and cotton respectively at a mid range offering of 50 dton feasible carbon credit prices of 3 8 23 per metric tonne co 2 e would incentivize conversion from corn crp or cotton respectively similarly a water quality penalty of 0 20 3 2 per kilogram no 3 n leached would incentivize the same conversions with resultant watershed improvement at a lower price of 30 dton switchgrass incentives based on valuation of ecosystem services begin to exceed feasible ranges of these valuations

disagreement and biases in inflation expectations empirical work documents substantial disagreement in inflation expectations obtained from survey data furthermore the extent of such disagreement varies systematically over time in a way that reflects the level and variance of current inflation this paper oers a simple explanation for these facts based on asymmetries in the forecasters costs of over and under predicting inflation our model implies biased forecasts with positive serial correlation in forecast errors and a cross sectional dispersion that rises with the level and the variance of the inflation rate it also implies that forecast errors at dierent horizons can be predicted through the spread between the short and long term variance of inflation we find empirically that these patterns are present in inflation forecasts from the survey of professional forecasters a constant bias component not explained by asymmetric loss and rational expectations is required to explain the shift in the sign of the bias observed for a substantial portion of forecasters around 1982

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

inflation uncertainties and returns on bonds the new wave of research on the effect of inflation on interest rates revolves around the incorporation of inflation uncertainty into the analysis 1 in a recent paper liviatan and levhari 1977 examine in a single period model the market risk premium on nominal bonds awarded as compensation for inflation related uncertainty where this premium is determined by attitudes of investors towards risk and the risk of inflation the hypothesis that nominal bonds carry an inflation uncertainty premium could be extended to multi period bonds this is also consistent with hick s 1946 liquidity premium which was estimated by kessel 1965 and mccullough 1975 who found systematic premia on the average returns of multi period bonds 2 this study too is concerned with the possible relationships between inflation uncertainties and the returns on multi period bonds we are examining the hypotheses using ex ante data and measures of inflation uncertainty based on these data the two sources of inflation uncertainty that may be associated with the returns on multi period bonds are the uncertainty about the rate of inflation in the next period and the uncertainty about expectations of inflation in future periods for a bond with two periods to maturity the holding period return is

effects of restraining steel exports from the republic of korea and other countries to the united states and the european economic community in this article a model is developed to evaluate the impact on an exporting country of a restraint imposed on its export by an importing economy in the context of a three region model of world trade in a single product the welfare changes in any of the three regions in the model and in the global economy can be evaluated the model is applied to the restraints imposed on steel exports from the republic of korea to the united states and the european economic community eec the united states and the eec are found to have incurred significant losses as a result of the restraints the largest part of these losses are quota rents transferred to korea and the rest of the world under reasonable parameter assumptions korea and the rest of the world obtain net gains from the quotas because the resource misallocation costs are smaller than the quota rents the model is modified to analyze a tariff barrier rather than a quantitative restraint it is found that an equivalent tariff on steel transforms korea and the rest of the world from net gainers to net losers as a result of a restraint

trade as the engine of growth in developing countries revisited economic growth in developed countries since the mid 1970s the only way to keep the engine of ldc growth beating at a satisfactory rate so the argument goes is to turn to an alternative source of fuel this lewis argues lies in trade among the developing countries which he asserts can take up the slack left by mdcs more developed countries as mdcs slow down 1980 p 560 pessimism about demand for ldc exports in developed countries markets is a recurrent theme in the development literature also familiar is the approach taken by lewis to dismiss past successes of ldcs in world trade by declaring the alleged engine of past growth to be no longer operating satisfactorily the intellectual foundations of the import substitution strategy laid in the 1950s by prebisch myrdal and most importantly nurkse rested on similar grounds arguing that the demand for periphery countries exports in the 20th century is far weaker than it was in the 19th century trade was dismissed as an engine of growth a function nurkse alleged it had served in the 19th century the solution prescribed in the 1950s was to look inward in effect to scrap the trade engine altogether lewis remedy coming two decades later when most importsubstitution possibilities in many ldcs have been all but exhausted retains the trade engine but seeks an alternative source of fuel to drive it the classic critique by irving kravis 1970 of nurkse s thesis of trade as a faltering engine of growth showed that export expansion did not serve in the nineteenth century to differentiate successful from unsuccessful countries p 850 this followed from two findings first that successful 19th century countries showed few signs of export dominated growth second that unsuccessful periphery countries enjoyed export expansion in the second half of the 19th century of the same order of magnitude as the temperate regions of recent settlement this led kravis to conclude that a more warranted metaphor

the expected price of keeping up with the joneses abstract inflation expectations elicited in surveys have been found to exhibit large dispersion across individuals although several explanations have been proposed none fully explain this puzzle we explore in this paper a new behavioral factor social comparison using original survey data we find that respondents who feel they are falling behind compared to their peers report significantly and substantially higher inflation expectations we argue that this result is consistent with an experience based belief formation model in which those unable to keep up with the joneses overweight the high prices of aspiration goods they are unable to purchase

consumption adjustment under time varying income uncertainty we study the effect of income uncertainty on consumption in a model that includes precautionary saving in contrast to previous studies we focus on time series variation in income uncertainty our time series measure of income uncertainty is constructed from a panel of forecasts we find evidence of precautionary saving in that increases in income uncertainty are related to increases in aggregate rates of saving we also find evidence that anticipated income growth rates have less explanatory power for consumption growth rates after conditioning on income uncertainty the evidence indicates the presence of forward looking consumers who gradually adjust precautionary savings in response to changing income uncertainty

the perversity of preferences gsp and developing country trade policies 1976 2000 industrial countries maintain special tariff preferences namely the generalized system of preferences gsp for imports from developing countries critics have highlighted the underachieving nature of such preferences but developing countries continue to place the gsp at the heart of their agenda in multilateral negotiations what effect do such preferences have on a recipient s own trade policies the authors develop and test a simple theoretical model of a small country s trade policy choice using a dataset of 154 developing countries from 1976 through 2000 they find that countries removed from the gsp adopt more liberal trade policies than those remaining eligible the results corrected for endogeneity and robust to numerous alternative measures of trade policy suggest that developing countries may be best served by full integration into the reciprocity based world trade regime rather than continued gsp style special preferences

fisher phillips friedman and the measured impact of inflation on interest a reply the purpose of this paper is to demonstrate that empirical findings which persistently appear to contradict the fisher hypothesis that the nominal rate of interest should rise by the full amount of an increase in anticipated inflation are due basically to a failure to control for changes in the real rate of interest that are associated with changes in anticipated inflation we are guided in our search for proper specification of a fisher equation by a simple general equilibrium model which is employed to derive the impact of a change in anticipated inflation upon nominal interest given the requirement that commodity money and labor markets remain in equilibrium in effect we depart from the empirical tradition which has grown up around testing of the fisher hypothesis that takes the real interest rate to be independent of anticipated inflation and argues that for anticipated inflation properly measured the data ought to support the fisher hypothesis 1

disagreement as a measure of uncertainty this paper presents evidence from the livingston survey of inflation forecasts that forecaster disagreement provides a useful measure of forecast uncertainty the evidence is analogous to the evidence for arch effects disagreement at the time of the forecast has as large positive effect on the conditional variance of the subsequent forecast error as a conditioning variable forecaster disagreement dominates arch for both survey errors and the error terms in robert engle s quarterly model of inflation as measured by the resulting conditional variances disagreement indicates larger and more variable levels of uncertainty for the 1946 94 period copyright 1996 by ohio state university press

effects of income growth and tariffs on the world salmon market the effects of income growth and tariffs on salmon prices production and trade flows are analysed using total elasticities derived from an equilibrium displacement model of the world salmon market results suggest the total income elasticity in world trade for salmon is about one which means imports worldwide will grow at about the same pace as world income however owing in part to policies that restrict supply response not all exporters will share evenly in this growth with uk producers benefiting the most and norwegian producers the least within importing countries imports are more responsive to income growth than is domestic production which means protectionist pressures are apt to increase with affluence us tariffs on imports from norway and chile are counterproductive in that they reduce world imports with little effect on the us price norway s feed quota reduces the efficacy of us tariffs makes imports less responsive to income and increases price volatility hence quota elimination m

the fallacy of composition argument is it relevant for ldcs manufactures exports abstract the constraints imposed upon ldcs export growth by international demand have been the subject of a long standing controversy in this paper we present estimates of manufactures export demand functions for 23 ldcs we focus first on the constraints that the international environment imposes upon export growth for an individual ldc to this purpose the small country hypothesis of an infinitely elastic export demand is tested and the claim that supply factors play a determinant role in affecting export performances is then assessed we turn next to the constraints on global ldc growth and ask whether exports from ldcs complete mostly with northern products or are better substitutes with exports from other ldcs this allows us to assess the heuristic value of cline s 1982 remark that a generalized outward shift in the ldcs export supply schedule would be associated with an important decline in prices and would undermine the success of a widespread export led strategy we find that for a representative ldc a large share almost 80 percent of the benefits of devaluation on export revenues are made to vanish when other ldcs competitors pursue similar policies

intra nie competition in exports of manufactures this paper provides empirical evidence on the extent to which the asian newly industrialised economies nies compete in world export markets our results support existing studies which emphasise the importance of allowing for intra ldc competition in modelling an individual developing country s exports whilst the asian nies are regarded as a model for other developing countries to emulate one has to consider whether such an expansion in export supply would be at the expense of oecd economies or whether it will lead to a deterioration in the terms of trade of the developing countries as a group

the effects of trade preferences for developing countries at the 1964 and 1968 united nations conferences on trade and development the developing countries pressed for and the developed countries finally agreed to the granting of preferential tariff treatment on the formers manufactured exports such a discriminatory measure runs counter to the non discrimination or most favored nation mfn principle set out in the first article of the general agreement on tariffs and trade and a gatt waiver was necessary before the developed countries could introduce their individual schemes under the generalized system of preferences gsp since their introduction between 1971 and 1976 these schemes have aroused opposition not only from protectionist forces in the donor countries and from supporters of the non discrimination principle but also from economists arguing that the gsp yields little benefit to the developing countries who would do better to seek mfn tariff cuts on goods in whose production they possess a comparative advantage the developing countries have however been if anything more skeptical of mfn tariff cuts since the introduction of gsp because such cuts would erode the value of their preference margins the relative merits of gsp versus mfn tariff cuts from the developing countries perspective is partly an empirical matter which could be settled by estimates of the trade creating and trade diverting impact of gsp such estimates require values for gsp beneficiaries parameters about which our knowledge is limited in this paper i contend that the most influential estimates of gsp effects sidestep this requirement in a manner which guarantees the predominance of trade creation whereas consideration of plausible parameter values and of the design of actual gsp schemes suggests trade diversion to be more significant the standard partial equilibrium model with infinitely elastic supply figure 1 has proven popular for estimating the effect of non preferential tariff changes largely because of its meager data requirements it is however inappropriate for preferential tariff changes because all imports come from the same source and all or nothing diversion of nonbeneficiaries trade is predicted this difficulty can be circumvented while remaining within the

income and price elasticities for exports of developing countries income and price elasticities for non oil exports of non opec developing countries play an imp ortant role in the development of policy responses to the debt crisis these elasticities are estimated for the major standard internation al trade classification commodity groups based on two stage least sq uares and quarterly data for 1973 to 1984 the income elasticity for non oil exports ranges between 1 4 and 1 9 the analysis also tests t he properties of the error term the dynamic specification and para metric stability the sensitivity of the results is assessed using sh iller s lags and band spectrum estimation copyright 1988 by mit press

uncertainty and labor contract durations this paper provides an empirical investigation into the relationship between ex ante u s labor contract durations and uncertainty over the period 1970 to 1995 we construct measures of inflation uncertainty as well as aggregate nominal and real uncertainty the results not only corroborate previous findings of an inverse relationship between contract durations and inflation uncertainty but also document that this relationship extends to both measures of aggregate uncertainty we also explore the robustness of this relationship to various measures of inflation uncertainty that have appeared in the literature

comparing the point predictions and subjective probability distributions of professional forecasters we use data from the survey of professional forecasters spf to compare point predictions of gross domestic product gdp growth and inflation with the subjective probability distributions held by forecasters we find that most spf point predictions are quite close to the central tendencies of forecasters subjective distributions tend to be asymmetric with spf forecasters tending to report point predictions that give a more favorable view of the economy than do their subjective means medians modes

exchange rates and south korean exports to oecd countries 1991 exchange rates and south korean exports to oecd countries applied economics vol 23 no 7 pp 1227 1236

errors in import demand estimates based upon unit value indexes disaggregated import demand elasticity estimates based on import unit value indexes are used in virtually all trade policy simulation models however unit value indexes have been criticized especially by kravis and lipsey 1974 to examine the effect of using unit value indexes on estimates of disaggregated import demand elasticities this paper compares regression results using unit value indexes with results using u s bureau of labor statistics import price indexes for several detailed trade categories based on quarterly data for 1978 88 results show that using unit value indexes does not greatly affect estimated import demand elasticities

forecast uncertainty ex ante and ex post u s inflation and output growth survey respondents who make point predictions and histogram forecasts of macro variables reveal both how uncertain they believe the future to be ex ante as well as their ex post performance macroeconomic forecasters tend to be overconfident at horizons of a year or more but overestimate i e are underconfident regarding the uncertainty surrounding their predictions at short horizons ex ante uncertainty remains at a high level compared to the ex post measure as the forecast horizon shortens there is little evidence of a link between individuals ex post forecast accuracy and their ex ante subjective assessments

inequality and the us import demand function in this paper we build a model of trade in vertically differentiated products and find that income inequality can affect the demand for imports even in the presence of homothetic preferences the empirical importance of changes in inequality on the demand for imports is then assessed by examining panel data for 36 developing and developed countries for the 1980 1997 period we find significant evidence supporting our prediction that inequality has a large influence on the demand for imports moreover we find that in line with the predictions of our theoretical model this influence is positive for high income countries countries that produce the high quality variety of the vertically differentiated product and negative for low income countries countries that produce the low quality variety of the vertically differentiated product

asymmetric preferences and the stability problem for optimal monetary policy rules this paper evaluates the stability properties of optimal monetary policy rules when professionals under adaptive learning have asymmetric preferences the asymmetric preferences require volatility estimates in real time an expectations based rule can stabilize the economy while a fundamentals based rule leads to instability

an ex ante model for estimating the impact on trade flows of a country s accession to a customs union this paper presents a structural ex ante model to study the trade creation and trade diversion effects associated with a country s accession to a customs union the model extends previous studies by introducing explicitly product differentiation and exports in the determination of trade creation and trade diversion unlike the traditional vinerian analysis where the role of exports is neglected the model handles the effects of the elimination of the common external tariff facing home exports the model is then applied to portugal s accession to the european community and estimates of trade substitution elasticities are presented for 26 sectors finally these elasticities are used along with other parameter estimates to classify sectors according to whether they would give rise to trade creation or trade diversion

does the central american common marke1 benefit its members does the central american common market benefit its members i introduction the members of the central american common market cacm have recently taken measures to revitalize their union they have formally pledged to improve regional economic integration and they have reinforced the common external tariff they took these measures in the belief that a stronger union would improve their economic welfare a belief that has also led both the united states and the european community to support a stronger union the idea that a regional trading group would improve economic welfare of the central american countries originated in the early 1950s when raul prebisch and other economists in the united nations economic commission for latin america ecla argued persuasively that such a union would help these countries develop their economies to many the views of the ecla economists were vindicated when the inceptionof the cacm in 1960 was followed shortly by accelerated economic growth in the region further support for their views came from quantitative studies cline and delgado 1978 willmore 1976 yotopoulos and nugent 1976 nugent 1974 and wilford 1970 which all concluded that the union provides static welfare gains for its members there is however room for skepticism about the benefits of the cacm much of the argument of the ecla economists is based on the notion that import substitution is a good way to promote economic development a notion that has since fallen into disrepute nor does the accelerated growth that followed the union s formation provide strong evidence that the cacm provides benefits the volume of trade between members is too small for the union to have had more than a minor effect on the region s economy so even if this effect were negative the region would presumably still have grown rapidly in the mid 1960s the evidence from the quantitative studies is also faulty these studies did not estimate directly the effects of the cacm but merely imputed these effects by assuming either that market shares or income elasticities would have remained constant without the union furthermore they assumed that supplies of different countries are perfect substitutes for each other whereas recent studies by collier 1979 grossman 1982 and anderson 1985 have shown that the degree of substitutability in demand between these supplies is important in determining how customs unions and other discriminatory tariff changes affect welfare it is particularly important to allow for less than perfect substitutability when analyzing the cacm because member imports from developed countries often have no close substitutes among locally produced goods in this paper the static welfare consequences of the cacm are reexamined with two important advances over the previous studies first direct estimates are made of the effects of the union second the shortcomings of the perfect substitutes assumption are overcome by allowing imports from different countries to be imperfect substitutes for each other and for domestic output the model which is partial equilibrium in nature also enjoys two advantages over the computable general equilibrium models such as those whalley 1985 and hamilton and whalley 1985 used to examine the effects of various economic integration schemes it requires fewer data and its operation is more transparent so it shows more clearly how introducing imperfect substitutes alters the traditional analysis of a customs union the model s main limitation is that it applies only to customs unions among small countries ii the model geometric presentation figures 1 2 and 3 show the home market and figure 4 the export market for country a a representative member of the cacm a s residents distinguish between four goods imports from other members imports from nonmembers domestic output for home consumption and exports

the welfare effects of repealing the u s offshore assembly provision abstract this paper develops new estimates of the welfare and domestic production effects of repealing the us offshore assembly provision oap although the controversy surrounding the oap has recently intensified the only such estimates of repealing the oap weredeveloped by finger 1976 the estimates are developed by applying a partial equilibrium trade model of a two stage production process to nineteen productct categories in which oap trade was important in 1986 the paper find that repael of the oap reduces domestic welfare however the effects are small and almost negligible in percentage terms the important effects of repeal are distributional

import competition from developed and developing countries separate demand equations for imports from less developed countries ldcs and imports from developed countries dcs were estimated for each of eleven representative product groups imports were found to compete quite readily with domestically produced goods with plausible own price and cross price elasticities whereas the quantity of each type of import was found to be quite responsive to changes in the price of us home goods each appears to be less sensitive to the price of the alternative import an explanation that is consistent with this observation and that finds support from detailed industry information is that dcs and ldcs supply goods that are at different stages in the product or technology cycle whereas us producers compete in all submarkets this suggests that trade creation rather than trade diversion provides the predominant inroad for ldcs into the us market 25 references 3 tables

impacts of ethanol policy on corn prices a review and meta analysis of recent evidence abstract the literature on the impacts of biofuels on agricultural commodity prices is characterized by contradictory findings we review studies published between 2007 and 2014 that estimate the effects of u s corn ethanol policy on corn prices and find estimates ranging from nil to over 80 such divergent results make it difficult to assess the merits of alternative biofuel policies to bring more clarity to the issue and facilitate comparisons across studies we assemble a database of over 150 medium to long run estimates of the effect of corn ethanol production on corn prices from 29 published studies we first normalize corn price impacts by the change in corn ethanol volume to control for the large differences in ethanol quantities across scenarios we then conduct a meta analysis to identify the factors that drive the remaining variation in corn price impacts across studies in addition to ethanol volumes we find that modeling framework projection year inclusion of ethanol co products and biofuel production from other feedstocks explain much of the differences in price effects the results indicate that a one billion gallon expansion of the us corn ethanol mandate in the year 2015 would lead to a three to four percent increase in corn prices with smaller price changes projected in future years

international competitiveness the demand for exports and real effective exchange rates in developing countries abstract most measures of the real effective exchange rate reer do not capture the complex ways in which the structure and direction of trade adapt to changes in exchange rates conventional measures of the reer are based on the stringent assumptions that cross price elasticities with respect to exports of third party competitors are all zero and with respect to trading partners they are all equal this paper develops an alternative index of competitiveness that captures the effects of a whole set of bilateral price changes by estimating an import demand system a reer for the philippines is computed and compared to a conventional reer

consensus and uncertainty in economic prediction we define consensus as the degree of agreement among point predictions aimed at the same target by different individuals and uncertainty as the diffuseness of the corresponding probability distributions this distinction is made operational with the aid of the nber asa survey data on matched point and probabilistic forecasts of inflation and the rate of change in gross national product the means of the two sets of forecasts agree closely standard deviations of point forecasts tend to understate uncertainty as measured by standard deviations of the predictive probability distributions however these measures of consensus and uncertainty are on the whole positively correlated there is evidence that expectations of higher inflation generate greater uncertainty about inflation tests also favor the hypothesis that a rise in inflation uncertainty has adverse effects on real growth

on the use of expectations data in estimating structural dynamic choice models despite the importance of expectations in models of decision behavior under uncertainty few empirical economists have made use of subjective expectations data in estimating such models assuming that expectations about future behavior accurately portray optimal future behavior conditional on current information it is shown that such data can provide similar information about the decision process as can data on current or retrospective behavior the value of self reported choice expectations is illustrated by using information on respondents expected future occupation in the estimation of a structural dynamic model of teacher career decisions under uncertainty

anticipated money inflation uncertainity and real economic activity this paper critically examines a number of maintained hypotheses that are necessarily being tested along with the basic notion derived from the rational expectations re formulation of lucas 1972 19 73 that only unanticipated money matters the trend stationary representation of secular real output of lucas and others is replaced by a difference stationary representation found by nelson and plosser 1980 to be consistent with u s historical data the impact of inflation uncertainty on real activity is considered attention is paid to possible mis measurement of agents ex ante anticipated money growth it is found that three alternative measures of anticipated money growth produce a stable impact on growth of output and employment contemporaneous and lagged values of unanticipated money growth have no significant additional explanatory power in the presence of any one of the three measures of anticipated money growth beyond this it is impossible to reject the hypothesis that the initial positive real impact of anticipated money is not temporary inflation uncertainty is found to act as a significant depressant of real economic activity in the presence of all tested combinations of anticipated and unanticipated money growth this abstract was borrowed from another version of this item

the impact of imports on the demand for labor in australia abstract in this paper we examine the impact of imports disaggregated by origin on the australian demand for labor contrary to widely accepted stylized facts we find evidence that imports from east asia and the pacific stimulate labor demand