welfare implications of the transition to high household debt abstract aggressive deregulation of the mortgage market in the early 1980s triggered innovations that greatly reduced indebted households required home equity and a borrowing surge followed this paper uses a calibrated general equilibrium model of lending from the wealthy to the middle class to evaluate the welfare effects of this reform quantitatively we find that the indirect effects of endogenous interest rate and other relative price changes dominate the direct effect of relaxing the constraint the borrowing household s welfare falls even though the reform directly relaxes a constraint on its trade the saving household s welfare rises substantially

monetary aggregates and liquidity in a neo wicksellian framework woodford 2003 describes a popular class of neo wicksellian models in which monetary policy is characterized by an interest rate rule and the money market and financial institutions are typically not even modeled critics contend that these models are incomplete and unsuitable for monetary policy evaluation our banks and bonds model starts with a standard neo wicksellian model and then adds banks and a role for bonds in the liquidity management of households and banks the banks and bonds model gives a more complete description of the economy but the neo wicksellian model has the virtue of simplicity our purpose here is to see if the neo wicksellian model gives a reasonably accurate account of macroeconomic behavior in the more complete banks and bonds model we do this by comparing the models second moments variance decompositions and impulse response functions we also study the role of monetary aggregates in predicting inflation in the two models

tariff equivalent and forgone trade effects of prohibitive technical barriers to trade we derive a method to econometrically estimate the tariff equivalent and forgone trade effects of a prohibitive technical barrier to trade tbt based on wales and woodland s kuhn tucker approach to corner solutions in consumer choice the method overcomes the lack of observed data on bilateral trade flows and accounts for differentiated goods by place of origin we apply the derived random utility model to international trade in apples to identify the tariff equivalent of prohibitive phytosanitary barriers imposed by australia on potential imports of new zealand apples we estimate the forgone apple trade between the two countries the implied trade injury imposed by australia on new zealand and the welfare loss to australia the removal of the australian policy would induce net welfare gains around us 50 million annually for australia copyright 2009 oxford university press

determinants of world demand for u s corn seeds the role of trade costs the united states is a large net exporter of corn seeds seed trade including corn has been expanding but its determinants are not well understood this paper econometrically investigates the determinants of world demand for u s corn seeds with a detailed analysis of trade costs impeding exports flows to various markets trade costs include costs associated with distance tariffs and sanitary phytosanitary sps regulations imposed by foreign countries on u s corn seed exports sps policy information comes from the excerpt data base of usda aphis the analysis relies on a gravity like model based on an explicit specification of derived demand for seed by foreign corn producers a sps count variable is incorporated as a shifter in the unit cost of seeds faced by foreign users we use data from 48 countries and for the years 1989 to 2004 we find that all trade costs matter and have had a negative impact on u s corn seed exports tariffs matter most followed by sps measures and distance an extensive econometric investigation reveals that qualitative results are robust to specification changes but that sample selection bias is present in log linear specifications based on seed export levels and approximating zero trade data with a small positive number

macroeconomic implications of deep habits in banking recent empirical evidence shows that price cost margins in the market for bank credit are countercyclical in the u s economy and that this cyclical behavior can be explained in part from the fact that switching banks is costly for customers i e from a borrower hold up effect our goal in this paper is to study the financial accelerator role of these countercyclical margins as a propagation mechanism of macroeconomic shocks to do so we apply the deep habits framework in ravn schmitt grohe and uribe 2006 to financial markets to model this hold up effect within a monopolistically competitive banking industry we are able to reproduce the pattern of price cost margins observed in the data and to show that the real effects of aggregate total factor productivity shocks are larger the stronger the friction implied by borrower hold up also output investment and employment all become more volatile than in a standard model with constant margins in credit markets an empirical contribution of our work is to provide structural estimates of the deep habits parameters for financial markets

household debt and fiscal multipliers we study the size of government spending multipliers in a general equilibrium model with search and matching frictions in which we allow for different levels of household indebtedness the main results are a the presence of impatient households and private debt helps to generate government spending multipliers greater than 1 b as financial conditions worsen the size of the government spending multiplier falls c conversely employment vacancies and unemployment multipliers are larger in a credit crunch d the model explains the observed pattern of responses of labour market variables housing prices and private debt to a fiscal shock reasonably well

personal bankruptcy and credit market competition we document a link between u s credit supply and rising personal bankruptcy rates we exploit the exogenous variation in market contestability brought on by banking deregulation the relaxation of entry restrictions in the 1980s and 1990s at the state level we find deregulation explains at least 10 of the rise in bankruptcy rates we also find that deregulation leads to increased lending lower loss rates on loans and higher lending productivity our findings indicate that increased competition prompted banks to adopt sophisticated credit rating technology allowing for new credit extension to existing and previously excluded households the last quarter century saw a dramatic increase in the share of u s con sumers filing for personal bankruptcy thereby seeking a discharge of their unsecured debt in 2005 this increase led to the most comprehensive change to u s bankruptcy law since 1978 while several causes for the rise in bankruptcies have been advanced and it is the subject of ongoing research two potentially significant changes occurred during this period banking deregulation the relaxation of bank entry restrictions in the 1980s and 1990s and technological change in consumer lending banking deregulation by removing barriers to entry increases credit market competition and there fore affects the supply of credit new screening technologies change the way loans are made allowing for interest rates to better reflect underlying risk and thus facilitating lending to riskier borrowers in this paper we examine whether banking deregulation and technological change played a role in the increase in consumer bankruptcy the empirical literature has mostly focused on cross sectional differences in personal bankruptcy in particular it has revolved around legal institutions as a way to answer whether consumers file due to adverse events as part of a rational financial calculation or as a consequence of unfair or deceptive lending practices usually researchers have exploited the different asset exemptions across u s states i e the amount of personal assets protected from creditors

the impact of regulations on agricultural trade evidence from the sps and tbt agreements according to world trade organization rules countries may adopt regulations under the agreements on sanitary and phyto sanitary sps and technical barriers to trade tbt we analyze the structure of these measures in agricultural trade the inventory approach suggests that european countries have among the lowest coverage ratios of all oecd countries using a gravity equation we also estimate their stringency our results suggest that they significantly reduce developing countries exports to oecd countries but do not affect trade between oecd members furthermore european imports are more negatively influenced by sps and tbts than imports of other oecd countries

staggered price setting translog preferences and endogenous persistence abstract this paper generates persistent real effects of a monetary disturbance in the context of staggered price setters the model combines two related and reinforcing features a translog demand structure and a particular input output production structure these features offer a rationale why a firm when computing its own optimal contract price is influenced by the prices set in other overlapping contracts practically the two features interact in a positive manner and provide a way to generate significant endogenous persistence

low inflation pass through and the pricing power of firms abstract recently there has been a significant decline in the degree to which firms pass through changes in costs to prices a decline that is frequently characterized as a reduction in the pricing power of firms the decline appears to be associated with the decline in inflation in many countries the decline has important implications for monetary policy because it affects both forecasts of inflation and the effects of changes in monetary policy on inflation some have argued that the decline in pricing power helped to keep inflation low in the face of apparently strong demand pressures in the united states in the late 1990s this paper puts forth the view that the decline in pass through or pricing power is due to the low inflation environment that has recently been achieved in many countries first a microeconomic model of price setting is used to show that lower pass through is caused by lower perceived persistence of cost changes evidence is then presented showing that inflation is positively correlated with persistence of inflation suggesting that the low inflation itself has caused the low pass through an economy wide model consistent with the micromodel is then presented to illustrate how such changes in pricing power affect output and inflation dynamics in favorable ways but can disappear quickly if monetary policy and expectations change

new directions for stochastic open economy models the paper develops a simple stochastic new open economy macroeconomic model based on sticky nominal wages explicit solution of the wage setting problem under uncertainty allows one to analyze the effects of the monetary regime on welfare expected output and the expected terms of trade despite the potential interplay between imperfections due to sticky wages and monopoly the optimal monetary policy rule has a closed form solution to motivate our model we show that observed correlations between terms of trade and exchange rates are more consistent with our traditional assumptions about nominal rigidities than with a popular alternative based on local currency pricing 2000 elsevier science b v all rights reserved

real exchange rate monetary policy and the u s economy evidence from a favar model this paper examines the effects of exchange rate depreciation to the u s economy in a factor augmented vector autoregression model using monthly data of 148 variables for the post bretton woods period of 1973 2017 exchange rate shock is identified to reflect exogenous disturbances to the foreign exchange market and movements in exchange rate that are not accounted for by changes in the u s monetary policy we find that depreciation is expansionary and inflationary to the broad u s economy the current account improves over time conforming to the j curve theory and monetary policy is leaning against the wind jel e3 e5 f31 f32 f41

exchange rate pass through openness and the sacrifice ratio abstract considerable recent work has reached mixed conclusions about whether and how globalization affects the inflation output trade off and suggests that the ultimate effect of openness on the output inflation relationship is influenced by a variety of factors in this paper we consider the impact of exchange rate pass through and examine how pass through conditions the effect of openness on the sacrifice ratio we develop a simple theoretical model showing how the extent of both pass through and openness can interact to influence the output inflation relationship next we empirically explore the nature of these two variables and their interaction results indicate that greater pass through increases the sacrifice ratio that there is statistically significant interaction between pass through and openness and once the extent of pass through is taken into account alongside other factors that affect the sacrifice ratio such as central bank independence openness fails to exert an empirically robust effect on the sacrifice ratio

asymmetric information and the structure of the banking industry abstract we analyze the effects of informational asymmetries on the market structure of the banking industry in a multi period model of spatial competition in the process of lending incumbent banks gather proprietary information about their clients acquiring an advantage over potential entrants we show that these informational asymmetries are important determinants of the industry structure and of banks strategic behavior contrary to traditional models of horizontal differentiation the steady state equilibrium is characterized by a finite number of banks even in the absence of exogenous fixed costs in addition less concentrated industry structures may be associated with higher interest rates

ppp strikes back aggregation and the real exchange rate we show the importance of a dynamic aggregation bias in accounting for the ppp puzzle we prove that the aggregate real exchange rate is persistent because its components have heterogeneous dynamics established time series and panel methods fail to control for this using eurostat data we find that when heterogeneity is taken into account the estimated persistence of real exchange rates falls dramatically its half life for instance may fall to as low as eleven months significantly below the consensus view of three to five years

financial frictions and policy cooperation a case with monopolistic banking and staggered loan contracts abstract do financial frictions call for cross border policy cooperation this paper investigates the implications of financial frictions in the form of staggered loan contracts supplied by monopolistic banks for monetary policy using the linear quadratic lq framework we show that policy cooperation yields long run gains in addition to gains from stabilizing inefficient fluctuations over the business cycle as usually found in models with price rigidities the ramsey optimal steady states differ between cooperation and noncooperation such gains from cooperation arise irrespective of capital account liberalization

international trade without ces estimating translog gravity this paper derives a micro founded gravity equation in general equilibrium based on a translog demand system that allows for endogenous markups and substitution patterns across goods in contrast to standard ces based gravity equations trade is more sensitive to trade costs if the exporting country only provides a small share of the destination country s imports as a result trade costs have a heterogeneous impact across country pairs with some trade flows predicted to be zero i test the translog gravity equation and find strong empirical support in its favor

bayesian inference for the gravity model this paper seeks to empirically extend the gravity model which has been widely used to analyze volumes of trade between pairs of countries we generalize the basic threshold tobit model by allowing for the inclusion of country specific effects into the analysis and also show how one can explore the relationship between trade volumes and a given covariate via a non parametric approach we use our derived methodology to investigate the impact of a particular aspect of institutions the enforcement of contracts on bilateral trade we find that contract enforcement matters in predicting trade volumes for all types of goods that it matters most for the trade of differentiated goods and that the relationship between contract enforcement and trade in our threshold tobit exhibits some nonlinearities copyright 2007 john wiley sons ltd

credit market competition and capital regulation market discipline for financial institutions can be imposed not only from the liability side as has often been stressed in the literature on the use of subordinated debt but also from the asset side this will be particularly true if good lending opportunities are in short supply so that banks have to compete for projects in such a setting borrowers may demand that banks commit to monitoring by requiring that they use some of their own capital in lending thus creating an asset market based incentive for banks to hold capital borrowers can also provide banks with incentives to monitor by allowing them to reap some of the benefits from the loans which accrue only if the loans are in fact paid off since borrowers do not fully internalize the cost of raising capital to the banks the level of capital demanded by market participants may be above the one chosen by a regulator even when capital is a relatively costly source of funds this implies that capital requirements may not be binding as recent evidence seems to indicate

house prices borrowing constraints and monetary policy in the business cycle i develop a general equilibrium model with sticky prices credit constraints nominal loans and asset prices changes in asset prices modify agents borrowing capacity through collateral value changes in nominal prices affect real repayments through debt deflation monetary policy shocks move asset and nominal prices in the same direction and are amplified and propagated over time the financial accelerator is not constant across shocks nominal debt stabilises supply shocks making the economy less volatile when the central bank controls the interest rate i discuss the role of equity debt indexation and household and firm leverage in the propagation mechanism finally i find that monetary policy should not target asset prices as a means of reducing output and inflation volatility

leaning against boom bust cycles in credit and housing prices this paper studies the potential gains of monetary and macro prudential policies that lean against house price and credit cycles we rely on a model that features borrowers and savers and allows for over borrowing induced by news shock driven cycles we find that policy that responds to changes in financial variables is socially optimal considering the use of a single policy instrument both types of agents are better off when the interest rate optimally responds to credit growth when we allow for the implementation of both interest rate and ltv policies heterogeneity in the welfare implications is key in determining the optimal use of policy instruments the optimal policy for the borrowers is characterized by a ltv ratio that responds countercyclically to credit growth which most effectively stabilizes credit relative to gdp in contrast the optimal policy for the savers features a constant ltv ratio coupled with an interest rate response to credit growth news shock driven cycles account for most of the gains from a policy response to changes in financial variables

the combination of gravity and welfare approaches for evaluating nontariff measures this article explores the link between gravity and welfare frameworks for measuring the impact of nontariff measures first an analytical approach suggests how to combine a gravity equation with a partial equilibrium model to determine the welfare impact of nontariff measures second an empirical application focuses on the effects of a standard that caps antibiotic residues in crustaceans in the united states the european union canada and japan while the econometric estimation of the gravity equation reports a negative impact on imports welfare evaluations show that in most cases a stricter standard leads to an increase in both domestic and international welfare

how do us credit supply shocks propagate internationally a gvar approach abstract we study how us credit supply shocks are transmitted to other economies we use the recently developed gvar approach to model financial variables jointly with macroeconomic variables in 33 countries for the period 1983 2009 we experiment with inter country links based on bilateral trade portfolio investment foreign direct investment and banking exposures capturing both bilateral trade and financial exposures in a gvar fits the data better than using trade weights only we use sign restrictions on the short run impulse responses in the us model to identify the credit supply shocks we find that negative credit supply shocks have strong negative effects on us and foreign gdp credit and equity markets in several countries respond clearly to the shocks exchange rate responses are consistent with a flight to quality to the us dollar the credit supply shocks explain about a fifth of one year ahead output forecast error variance in the us and about a tenth in the euro area and the uk but considerably less elsewhere

exchange rate pass through to bilateral import prices abstract this paper estimates exchange rate pass through for a unique set of bilateral us import prices over the period 1992 2006 it finds evidence of a significant decline in pass through to us import prices from some but not all of the trading partners in the sample these differences rule out a universal decline in pass through rates to bilateral us import prices they further indicate a growing divergence in the import price response to a uniform dollar decline

bank regulation and macroeconomic fluctuations over the last two decades macroeconomic cycles were frequently associated with boom bust cycles in bank lending and asset prices often followed by financial instability in this paper we argue that i the new pattern of macroeconomic cycles is partly the result of banking sector liberalization since the early mid 1970s which has increased the procyclicality of the financial system ii the regulation of bank capital in the form of capital adequacy requirements is itself inherently procyclical and may therefore amplify business cycle fluctuations iii the new basel 11 accord may considerably accentuate the procyclicality of the regulatory system

solutions to the crisis the green new deal degrowth and the solidarity economy alternatives to the capitalist growth economy from an ecofeminist economics perspective this article deals with three approaches conceived as alternative approaches to the capitalist growth economy the green new deal degrowth and the solidarity economy ecofeminist economics has much to offer to each of these approaches but these contributions remain as of yet unrealized the green new deal largely represents the green economy which holds economic success as contingent upon the ecological restructuring of industrial production the degrowth approach more fundamentally raises questions concerning the relationship between material prosperity and individual and social well being the principles of the solidarity economy involve the immediate implementation of the principles of self determination and cooperation none of these approaches takes into account the claims of ecofeminist economics and none of them clearly view gender equity as essential to economic change the three approaches are however deeply gendered in the sense that they are implicitly based on assumptions concerning women s labor in the sphere of social reproduction this article demonstrates how each approach can be improved upon by the integration of ecofeminist economic principles in order to achieve economic change that also meets claims for gender equity

optimal monetary policy and imperfect financial markets a case for negative nominal interest rates this article studies optimal monetary policy in a model with credit frictions and money demand we show that augmenting a standard new keynesian model with money demand and financial frictions generates a mechanism that in equilibrium gives rise to optimal negative nominal interest rates in addition we find that the tighter credit markets are the lower the optimal nominal policy interest rate and the more likely it is to be negative quantitatively when credit constraints are binding a standard calibration of the model generates an optimal nominal policy interest rate that is roughly 4 annually jel e31 e41 e43 e44 e52 e58

income and wealth heterogeneity in the macroeconomy how do movements in the distribution of income and wealth affect the macroeconomy we analyze this question using a calibrated version of the stochastic growth model with partially uninsurable idiosyncratic risk and movements in aggregate productivity our main finding is that in the stationary stochastic equilibrium the behavior of the macroeconomic aggregates can be almost perfectly described using only the mean of the wealth distribution this result is robust to substantial changes in both parameter values and model specification our benchmark model whose only difference from the representative agent framework is the existence of uninsurable idiosyncratic risk displays far less cross sectional dispersion and skewness in wealth than u s data however an extension that relies on a small amount of heterogeneity in thrift does succeed in replicating the key features of the wealth data furthermore this extension features aggregate time series that depart significantly from permanent income behavior

banking competition housing prices and macroeconomic stability we develop a macroeconomic model with an imperfectly competitive bank loans market and collateral constraints that tie investors credit capacity to the value of their real estate holdings lending margins are optimally set by banks and have a significant effect on aggregate variables over the long run stronger banking competition increases output by triggering a reallocation of available collateral towards investors in the short run output credit and housing prices are more responsive on impact to shocks in an environment of highly competitive banks also stronger banking competition implies higher lower persistency of credit and output after a monetary credit crunch shock

estimation and welfare calculations in a generalized corner solution model with an application to recreation demand the kuhn tucker model of wales and woodland 1983 provides a utility theoretic framework for estimating preferences over commodities for which individuals choose not to consume one or more of the goods due to the complexity of the model however there have been few applications in the literature and little attention has been paid to the problems of welfare analysis within the kuhn tucker framework this paper provides an application of the model to the problem of recreation demand in addition we develop and apply a methodology for estimating compensating variation relying on monte carlo integration to derive expected welfare changes

pass through of exchange rates and competition between floaters and fixers this paper studies how a rise in the share of u s imports from china or any country with a fixed exchange rate could disproportionately lower pass through of exchange rates to u s import prices we develop a theoretical model showing how changes in the competitive environment induce exporters from other countries to lower markups in response to a dollar depreciation thereby moderating pass through the model indicates that a particular local bias condition is necessary for this effect and that free entry amplifies it the model also produces an approximately log linear structural equation for pass through regressions including the china share panel regressions over 1993 2006 indicate that the rising share of trade from china or from all countries with fixed exchange rates can explain a decline in pass through by about onefifth of its size

pass through of competitors exchange rates to us import and producer prices this paper shows that in theory and bls microdata the prices of imported goods respond to the exchange rates er of the producer s foreign competitors in contrast standard models have no role for competitors ers excluding the effects of competitors exchange rates typically biases upwards estimates of bilateral exchange rate pass through because competitors ers and bilateral ers are positively correlated a multi country version of atkeson and burstein s 2008 industry aggregation model is able to explain a sizable proportion of pass through of competitors exchange rates to import prices and also predicts pass through of foreign competitors prices and pass through of competitors ers to us producer prices both of which are supported in the data the results suggest that pass through will be larger for er movements shared by a greater fraction of foreign competitor countries

property rights regimes and natural resources a conceptual analysis the term common property resource is an example of a term repeatedly used to refer to property owned by a government or by no one it is also used for property owned by a community of resource users such usage leads to confusion in scientific study and policy analysis in this paper we develop a conceptual schema for arraying property rights regimes that distinguishes among diverse bundles of rights ranging from authorized user to claimant to proprietor and to owner we apply this conceptual schema to analyze findings from a variety of empirical settings including the maine lobster industry

spatial competition in the banking system localization cross subsidies and the regulation of deposit rates abstract the paper analyses a spatial competition model of the banking sector banks offer two kind of services deposits and credit and can either borrow or lend on the money market we investigate the consequences of the regulation of rates paid on deposits the main conclusions are as follows regulation first increases network size beyond social optimum in the long run it results in lower equilibrium credit rates because of increased competition secondly regulation generates tied sales contracts by which banks propose bundles of credit and deposit services tied sales in turn motivate the introduction of cross subsidies between the two activities the rent levied upon regulated deposits financing lower rates in the credit market finally it is shown that in a regulated environment the effectiveness of monetary policy is reduced in the sense that fluctuations of money market rates are less than fully transmitted in credit rates

gender property rights and natural resources abstract attention to gender differences in property rights can improve the outcomes of natural resource management policies and projects in terms of efficiency environmental sustainability equity and empowerment of resource users although it is impossible to generalize across cultures and resources it is important to identify the nature of rights to land trees and water held by women and men and how they are acquired and transmitted from one user to another the paper particularly examines how the shift from customary tenure systems to private property in land trees and water has affected women the effect of gender differences in property on collective action and the implications for project design

goods prices and exchange rates what have we learned import prices typically change by a smaller proportion than the exchange rate between the exporting and importing country recent research indicates that common currency relative prices for similar goods exported to different markets are highly correlated with exchange rates between those markets this evidence suggests that incomplete pass through is a consequence of third degree price discrimination while distance matters for market segmentation borders have independent effects the source of the border effect has not been clearly identified furthermore there is little evidence yet to suggest substantial market power is implied by the observed price discrimination

potential of regional and seasonal requirements in us regulation of fresh lemon imports peterson regional destination and seasonal access restrictions are regulatory options available to mitigate pest risk on imported fresh fruits and vegetables rather than impose an import ban this paper analyses the economic effects of potential entry of argentine lemons into the united states under alternative geographic and seasonal restrictions one challenge to assessing the economic effect of entry is determining the post entry quantity of argentine exports using a homothetic trans log expenditure function we calibrate a set of reservation prices for us demand for argentine lemons based on observed prices and quantities of other lemon varieties these are compared with a set of projected entry prices to determine whether entry will occur and post entry export levels across the policy scenarios argentine lemon exports to the united states range from 8 0 to 14 9 million kg higher prices for argentine lemons reduce its exports to the european union and other markets while lemon exports from chile and mexico are adversely affected broader applications of regional and or seasonal restrictions may be effective policies for achieving pest risk mitigation goals in a manner consistent with wto obligations to minimise distortions to trade

does exchange rate stability increase trade and welfare we develop a simple general equilibrium framework to study the effect of the exchange rate system on trade and welfare an important feature of the model is deviations from purchasing power parity caused by rigid price setting in buyers currency we find the following first exchange rate stability is not necessarily associated with more trade in a simple benchmark model with separable preferences and only monetary shocks trade is unaffected by the exchange rate system consistent with most evidence second both trade and welfare can be higher under either exchange rate system depending on preferences and on the monetary policy rules followed under each system finally in general there is no one to one relationship between the levels of trade and welfare across exchange rate systems

tariff equivalent of technical barriers to trade with imperfect substitution and trade costs the price wedge method yields a tariff equivalent estimate of technical barriers to trade tbt an extension of this method accounts for imperfect substitution between domestic and imported goods and incorporates recent findings on trade costs we explore the sensitivity of this revamped tbt estimate to its key determinants substitution elasticity preference for home good and trade cost we use the augmented approach to investigate the recent japan u s apple trade dispute and find that removing the japanese tbt would yield limited export gains to the united states we then draw policy implications of our findings

big banks and macroeconomic outcomes theory and cross country evidence of granularity does the mere presence of big banks affect macroeconomic outcomes we develop a theory of granularity for the banking sector by modeling heterogeneous banks charging variable markups using data for a large set of countries we show that the banking sector is indeed granular as the right tail of the bank size distribution follows a power law we demonstrate empirically that the presence of big banks measured by a high degree of market concentration is associated with a positive and significant relationship between bank level credit growth and aggregate growth of credit or gdp

the trade and welfare impact of australian quarantine policies the case of pigmeat we analyze the trade and welfare impact of quarantine measures imposed by australia on imports of pigmeat in particular we account for changes to australia s pigmeat quarantine policy over time including those changes related to the recent resolution of a wto dispute between australia and the european union using a random utility model and applying it to corner solutions in import decisions tariff equivalents by major trading partner are estimated for the different pigmeat quarantine regimes implemented by australia during the period 1988 2009 the welfare impact on consumers producers and foreign exporters is computed using a partial equilibrium model calibrated on the econometric estimates the quarantine regimes have a strong effect on trade and welfare with a tariff equivalent above 113 of average real world prices over the period analyzed

water from basic need to commodity a discussion on gender and water rights in the context of irrigation abstract this paper examines the implications of changing water policies for women s water rights and access to water in irrigation systems with growing water scarcity and programs to increase the efficiency of water allocation and delivery the allocation of water rights becomes critical although women often have informal means and mechanisms to obtain and secure access to water in most systems studied there is no recognition of women s specific water needs especially for production as opposed to domestic consumption current policies to privatize and devolve management of irrigation need to increase responsiveness to specific women s water needs and interests if they are to address efficiency as well as equity concerns

fixed exchange rates and trade abstract a classic argument for a fixed exchange rate is its promotion of trade empirical support for this however is mixed while one branch of research consistently shows a small negative effect of exchange rate volatility on trade another more recent branch presents evidence of a large positive impact of currency unions on trade this paper helps resolve this disconnect our results which use a new data based classification of fixed exchange rate regimes show a large significant effect of a fixed exchange rate on bilateral trade between a base country and a country that pegs to it these results suggest an economically relevant role for exchange rate regimes in trade determination since a significant amount of world trade is conducted between countries with fixed exchange rates

banking competition collateral constraints and optimal monetary policy we analyze optimal monetary policy in a model with two distinct financial frictions monopolistically competitive banks that charge endogenous lending spreads and collateral constraints we show that welfare maximization is equivalent to stabilization of four goals inflation output gap the consumption gap between borrowers and savers and a housing gap that measures the distortion in the distribution of the collateralizable asset between both groups collateral constraints create a trade off between stabilization goals following both productivity and financial shocks and relative to strict inflation targeting the optimal policy implies sharper movements in the policy rate aimed primarily at reducing fluctuations in asset prices and hence in borrowers net worth the policy trade offs become amplified as banking competition increases due to the fall in lending spreads and the resulting increase in borrowers leverage

exchange rates and prices the adjustment of relative prices to exchange rate movements is explained in an industrial organization approach given labor costs in the respective currencies exchange rate movements change costs for firms selling in the home market and thus disturb the industry equilibrium the extent of absolute and relative price adjustment is shown to depend on market integration product substitutability the relative number of domestic and foreign firms and the market structure the impact of exchange rates on prices is illustrated in a variety of approaches including the cournot a dixit and j stiglitz 1977 and s salop 1979 models some empirical evidence is offered in support of the theory copyright 1987 by american economic association

the determinants of bank interest rate margins an international study abstract this paper studies the determinants of bank net interest margins nims in six selected european countries and the us during the period 1988 1995 for a sample of 614 banks we apply the ho and saunders model ho t saunders a 1981 the determinants of bank interest margins theory and empirical evidence journal of financial and quantitative analyses 16 581 600 to a multicountry setting and decompose bank margins into a regulatory component a market structure component and a risk premium component the regulatory components in the form of interest rate restrictions on deposits reserve requirements and capital to asset ratios have a significant impact on banks nims the empirical results suggest an important policy trade off between assuring bank solvency high capital to asset ratios and lowering the cost of financial services to consumers low nims the more segmented or restricted the banking system both geographically and by activity the larger appears to be the monopoly power of existing banks and the higher their spreads macro interest rate volatility was found to have a significant impact on bank nims this suggests that macro policies consistent with reduced interest rate volatility could have a positive effect in reducing bank margins