returns to regionalism the past decade has witnessed a renewed interest in regional trade agreements with many policymakers and academics seeming to believe that these provide more than the traditional gains from trade this article examines several possible benefits that regional trade agreements may confer on their partners including credibility signaling bargaining power insurance and coordination it assesses the necessary conditions for each possible channel to work gives stylized examples of specific types of policy where the benefit might be applicable examines cases where the explanation might be relevant and discusses their overall plausibility it concludes by examining the north american free trade agreement and the europe agreements

returns to regionalism an analysis of nontraditional gains from regional trade agreements the past decade has witnessed a renewed interest in regional trade agreements with many policymakers and academics seeming to believe that these provide more than the traditional gains from trade this article examines several possible benefits that regional trade agreements may confer on their partners including credibility signaling bargaining power insurance and coordination it assesses the necessary conditions for each possible channel to work gives stylized examples of specific types of policy where the benefit might be applicable examines cases where the explanation might be relevant and discusses their overall plausibility it concludes by examining the north american free trade agreement and the europe agreements

the impacts of petroleum price fluctuations on income distribution across ethnic groups in malaysia crude oil price hikes have compelled governments of developing countries to let domestic prices of energy increase fiscal priorities made it impossible to fully compensate the hikes by raising energy subsidies this paper examines the potential impacts of a limited deregulation of the petroleum price on the income distribution in malaysia paying specific attention to differences in impacts on major ethnic groups we introduce an extended social accounting matrix sam model which not only incorporates substitution possibilities among production inputs and consumption goods but also allows for the exogenous determination of the price of intermediate inputs the results of simulations indicate that distributional impacts of rising petroleum prices tend to be regressive affecting poor people more severely than richer people all ethnic groups experience income loss with the real incomes of malay households which are relatively poor on average more than the chinese and indian households which are the generally richer

the impact of environmental policies on household incomes for different socio economic classes the case of air pollutants in indonesia abstract with outdoor air pollutants in indonesia as a case study this paper expands a social accounting matrix to include the link from the economy to the environment as well as the link from the environment to the economy this paper explores the relationship between production activities pollution and human health problems it utilizes the constrained fixed price multipliers method to analyze the impact of policies designed to reduce the amount of pollutants in the air on household incomes for different socio economic classes in indonesia the results show that if policies designed to reduce the amount of pollutants in the air do not decrease the output of production sectors then the policies also improve income distribution

an econometric view on the estimation of gravity models and the calculation of trade potentials this paper presents an ar 1 model in the spirit of hausman and taylor zero differences between actual and in sample predicted trade flows large systematic differences between observed and in sample predicted trade flows only indicate model misspecification and econometric problems out of sample predictions make sense if countries of interest are in an early stage of the transformation process the gravity model remains an interesting tool for the calculation of counterfactuals e g the impact of catching up in gdp per capita in the ceec or of the reduction of trade costs via infrastructure investments or tariffs on bilateral trade etc for this line of research the difference between short term and long term influences could provide interesting insights

opening up international trade with eastern europe trade with eastern europe carl b hamilton and l alan winters previous economic policy in the soviet union and eastern europe sought to restrict international trade with market economies hence liberalization and reform should now lead to a huge increase in such trade this will have a major impact both on the reforming economies and on their new trade partners first we develop an empirical model of trade flows between existing market economies and use this to forecast long run trade flows as the former soviet union and eastern europe are reabsorbed into the world economy second we provide a more detailed analysis of one key sector agricultural trade we compare and contrast three regime changes reform in the east admission of the east to the ec cap and worldwide success on agricultural liberalization in the gatt third we adduce evidence of high quality human capital in eastern europe and argue that this will tend to confer a comparative advantage in quite sophisticated products we conclude by stressing that since trade cannot be permanently and profoundly unbalanced western market economies can enjoy potential gains from trade only if they allow market access to emergent producers from the former soviet union and eastern europe

market efficiency and profitable wagering in the national hockey league can bettors score on longshots sports betting and racetrack markets continue to provide researchers with opportunities to test the efficient market hypothesis this paper investigates the efficiency of a relatively new sports betting market the national hockey league for 1990 1996 the market is found to be somewhat inefficient and simple wagering strategies are identified that result in profitable returns consistent with previous research for football and baseball bettors in hockey are inclined to overbet favorites relative to their observed chance of winning interestingly the market does not appear to be converging to efficiency

environmental and social accounting for brazil an environmentally extendedsocial accounting matrix sam has beenconstructed for brazil for the first time wereview in detail previous studies in thisfield describe the construction structure anddata sources of the brazilian sam anddemonstrate the effect of system closure examining a range of type i and type iimultipliers we show that incomes generated byfinal consumption are highly skewed towardsrich households but energy requirements andcarbon emissions are higher for the consumptionof the poor a significant negative correlationexists between employment and income on onehand and energy requirements and carbonemissions on the other while a significantpositive correlation exists between imports and energy and carbon these correlationsdemonstrate that there is scope for policiesthat pursue imports substitution and reduceenergy consumption and carbon emissions whilstincreasing employment and income

the determinants of cross border equity flows abstract we explore a new panel data set on bilateral gross cross border equity flows between 14 countries 1989 1996 we show that a gravity model explains international transactions in financial assets at least as well as goods trade transactions gross transaction flows depend on market size in source and destination country as well as trading costs in which both information and the transaction technology play a role distance proxies some information costs and other variables explicitly represent information transmission an information asymmetry between domestic and foreign investors and the efficiency of transactions the geography of information is the main determinant of the pattern of international transactions while there is weak support in our data for the diversification motive once we control for the informational friction we broaden the scope of our results by presenting some evidence linking the results on equity transactions to equity holdings

the virtues of gradualism and legitimacy in the transition to a market economy this paper presents a simplified model of sectoral restructuring in eastern europe a move towards allocative efficiency is desired by the reform minded government but the shift to higher productivity which such efficiency requires would lead to massive layoffs and labour reallocation in the transition period we look at the impact of political constraints unanimity and or majority worker approval on reform proposals when the government faces a heterogeneous workforce holding private information on relative outside opportunities when the budgetary consequences of exit compensations are so important as to make partial reforms preferable to full reforms gradualism emerges as the optimum in a dynamic context without government commitment it is also shown that under democratic majority rule a government in control of the agenda of reforms can win majority approval for plans which end up hurting majority interests intertemporally by threatening to switch majorities in future reform proposals this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item

re examining the betting market on major league baseball games is there a reverse favourite longshot bias a recent study of the fixed odds betting market on baseball games while finding that the betting market is generally efficient also found evidence of an underbetting on underdog teams this article examines the evidence for this new anomaly it corrects woodland and woodland s estimates of the commission subjective win probabilities and test statistics the efficiency null hypothesis cannot be rejected for all of their tests when revised test statistics are calculated for their sample period however like them it was found that slight underdogs are underbet it is also shown that their bias is not simply a bias involving favourites and underdogs whether underdogs are playing at home or away also seems to matter in their sample period as well a positive relationship between returns and subjective probabilities was found for underdogs and favourites a relationship suggestive of a favourite longshot bias rather than its reverse it is concluded that there is insufficient evidence to claim that this

official finance requirements in the 1990s abstract estimates based on a savings gap model with endogenous private bank lending suggest that projections of development aid requirements for sub saharan africa low income asia and latin america by fishlow 1987 the development committes 1988 and the un 1988 are too optimistic a substantial increase in official financial flows to developing countries is necessary it appears that an increase in private bank exposure by 25 a 35 debt reduction and a 35 interest reduction as proposed in the recent brady plan are insufficient to reach minimum growth rates in the three developing regions

district level economic linkages in kenya evidence based on a small regional social accounting matrix abstract this paper explores the nature and extent of the economic linkages in a small regional economy defined by a market center and its hinterland in kenya the analysis is based on a set of income and employment multipliers derived from a social accounting matrix estimated for the region issues considered include the impact of production activities on regional value added and employment the influence of sectoral production on the level of household income and the impact of household expenditure on regional value added and the relative significance of production and consumption linkages in terms of stimulating aggregate income the above questions are examined under the assumption of complete excess capacity in regional production and under the assumption of supply constraints in agriculture the usefulness of the analysis for district level economic planning is demonstrated

the economy wide impact of controlling energy consumption in indonesia an analysis using a social accounting matrix framework escalating oil prices and the need to control carbon emissions sound the alarm for indonesia to reduce or be more efficient in its energy use instead of eliminating the fuel oil subsidy to promote better and more efficient use of energy the indonesian government seems to be more in favour of restricting energy use by for example requiring all hotels restaurants night clubs and other business activities to close down by 1 am societies need to understand the full consequences of adopting restricting energy use and more efficient energy use strategies toward their incomes this paper aims to analyse the impact on the economy of energy policies aiming to reduce and to improve the efficiency of energy use particularly on the income of various household groups this paper will first construct a social accounting matrix for indonesia with detailed energy sectors and second utilise various multiplier analyses to observe and understand the impact of these energy policies

trade capital and the transition in central europe the potential for export oriented growth and the impact of official capital injections is assessed for five central european countries in the years 1990 2000 by means of a neoclassical simulation model export growth is essential for the transition to a market oriented economy and the recovery of central europe implying the need for trade liberalization by both the east and the west if this condition is being met satisfactory gdp growth rates appear possible even without external financial support

trade creation and trade diversion in the eec the lafta and the cmea 1960 1994 in a simplified version of the gravity model appropriate dummy variables have been introduced to analyse the effects of both trade creation and trade diversion by three economic organizations the european economic community eec the latin american free trade association lafta and the council of mutual economic assistance cmea for the period 1960 94 five year intervals are the main subject of measurement the results show that both trade creation dummies and trade diversion dummies have statistically significant coefficients which show the appropriateness of this new approach the trade creation effect and trade diversion effect of each institution are proved to be generally weakening during the 1990s it is also observed that each organization has a distinctive international trade character for japanese trade a similar approach is used to analyse nonaligned trade by japan with particular interest in the effects of these three institutions on trade with japan the result is that there is no s

revealing weak form inefficiency in a market for state contingent claims the importance of market ecology modelling procedures and investment strategies this paper examines the degree to which current prices discount historical prices in a market for state contingent claims conditional logit analysis is employed to predict winning probabilities based on market prices in a betting market these are used together with various wagering strategies to yield substantial abnormal returns consequently in contrast to the existing literature the results suggest that the market is not weak form efficient the disparity with previous efficiency studies highlights the importance of considering market ecology and of adopting an appropriate modelling procedure and investment strategy to fully exploit information contained in market prices

imported materials prices wage policy and macroeconomic stabilization this paper analyses two simple wage rules that keep employment constant when there are shocks to the prices of imported materials one rule ties nominal wages to the gnp deflator rather than the consumer price index the second rule followed by japan after the second oil price shock ties the real wage to real gnp the paper shows the effects on output real income and other macro economic variables of choosing either rule in place of the real wage stability provided by conventional wage indexation

an institutional approach to cross national distance cross national distance is a key concept in the field of management previous research has conceptualized and measured cross national differences mostly in terms of dyadic cultural distance and has used the euclidean approach to measuring it in contrast our goal is to disaggregate the construct of distance by proposing a set of multidimensional measures including economic financial political administrative cultural demographic knowledge and global connectedness as well as geographic distance we ground our analysis and choice of empirical dimensions on institutional theories of national business governance and innovation systems in order to overcome the methodological limitations of the euclidean approach we calculate dyadic distances using the mahalanobis method which is scale invariant and takes into consideration the variance covariance matrix we empirically analyze four different foreign expansion choices of us companies to illustrate the importance of disaggregating the distance construct and the usefulness of our distance calculations which we make freely available to managers and scholars

waves of international banking integration a tale of regional differences abstract we propose an original measure of international banking integration based on gravity equations and a spline function on a panel of 14 countries and their 186 partners between 1999 and 2012 contrary to the conventional wisdom we uncover that 1 the international banking integration outside the euro area has been tenaciously increasing since 1999 and has even strengthened after the crisis 2 in contrast the international banking integration of the euro area has been cyclical since 1999 with a peak in 2006 and a complete reversal since then 3 this decline is not a correction of previous overshooting but a marked disintegration 4 outside the euro area the level of income does not affect the shape of banking integration

are the costs of cleaning up eastern europe exaggerated economic reform and the environment widespread concern has been expressed that the costs of reducing environmental pollution in eastern europe will divert substantial investment resources from the pool available for industrial modernization in fact apart from a number of severely damaged areas the general level of exposure to major pollutants in eastern europe is not high by comparison with the oecd countries even without specific environmental policies the process of general economic reform combined with energy conservation induced by higher energy prices will reduce emissions by nearly 50 percent a modest fraction of general investment in industrial modernization will deal with the remaining problems of current emissions provided that sensible systems of environmental charges are enforced the countries will then be faced with the problem of cleaning up the debris of past industrial activity which can be tackled over an extended period of years as in other industrial economies copyright 1991 by oxford university press

trade and exchange rate policies in formerly centrally planned economies this paper examines the international economic policies of the eastern european and soviet successes states in the early 1990s which provide one of those wide open windows of opportunity when powerful vested interests are not lobbying for retention of an existing tariff structure moreover the simultaneous abandonment of central planning by over two dozen countries provided a natural experiment in which a range of differing policies might have been pursued policymakers in transition economies have generally ended up pursuing liberal non discriminatory trade and foreign exchange policies there are exceptions and the majority may be wrong but the presumption is that perhaps after a learning or trial and error process decision makers have found the rules of thumb suggested by economists to be their best guide to international economic policy this paper notes that integration of transition economies into the global trading system has been surprisingly successful almost all the countries in transition from central planning have accepted the wto rule based system in principle even if there are variations in trade policies and performance and have generally pursued multilateral non discriminatory trade policies in particular the potential danger of regionalism proving more attractive than multilateralism has not eventuated the revealed behaviour of policymakers suggests that trade liberalisation is a good rule of thumb and regional groupings among transition economies have been insignificant despite a proliferation of new currencies varying exchange rate regimes and differing degrees of currency convertibility the general pattern has been to accept convertibility for current account transdactions and in many cases to extend this to a de jure commitment and to allow substantial capital account convertibility a general policy conclusion in favour of more open and non discriminatory trade and exchange policies have passed the test of acceptability by policymakers in over two dozen countries in this category

market efficiency and the favorite longshot bias the baseball betting market this paper examines the efficiency of the legal gambling market for major league baseball weak form tests of market efficiency within and across odds lines are performed surprisingly the consistently observed favorite longshot bias in racetrack betting is shown to exist in reverse for baseball bettors however these and other deviations from efficiency are shown to be insufficient to allow for profitable betting strategies when commissions are considered

the national football league season wins total betting market the impact of heuristics on behavior sports and racetrack betting markets have been investigated by researchers for more than 50 years many authors have argued that the observed biases and inefficiencies in these markets are a consequence of bettors incorrectly assessing the objective probabilities that favorites or underdogs will win this article is the first examination of the national football league season wins total over under betting market where the designations of favorite and longshot do not apply the market is found to be highly inefficient providing several opportunities for profitable wagering we believe these inefficiencies are a consequence of the representativeness heuristic most significantly there is evidence that bettors when considering teams with strong records in the previous season overreact to historical performance and fail to recognize the statistical phenomenon of regression to the mean

international migration capital mobility and transitional dynamics much of recent thinking on the problems of the central and east european countries ceecs centres on how long it will take them to catch up to oecd economies and how various policies will hasten or hinder the transition this paper using a highly stylized framework focuses on a quite different set of issues how the nature of the transition can effect the nature of the long run equilibrium the mechanism we focus on is factor mobility and factor complementarity excerpt

trade reorientation and recovery in transition economies how do we define transition and when can we say that transition to a market economy is complete here we suggest that one way of addressing this issue is to analyse current economic data and ask whether in ignorance of the past we can identify countries in central and eastern europe as being somehow different from comparable western market economies in this paper we focus on international trade and argue that several indicators such as the geographical structure of trade and the undervaluation of the exchange rate cannot distinguish the more advanced countries in central and eastern europe we also seek to explain how the reorientation of trade towards the west has been achieved and in particular assess whether improvements on design and quality are a prerequisite for export expansion copyright 1997 by oxford university press