determinants of trade costs and trade growth accounting between india and the european union during 1995 2010 this study aimed to utilise the micro founded measure of trade cost derived by novy to estimate the relative bilateral trade costs of india with its european union partners the advantage of using such a model is that the trade costs can be derived entirely using observable trade data the results show that indian tariff equivalent with its major eu trading partners has declined by 20 percentage points between 1995 and 2010 with malta and latvia experiencing the greatest decline the study then decomposes the bilateral trade growth to ascertain whether it is an outcome of increased domestic production or reduction in bilateral and multilateral trade barriers novy s model indicates that the decline in relative bilateral trade costs explains the greatest percentage of this trade growth which is partially offset by decline in multilateral resistance terms that has diverted trade away to other trading partners primarily in south and south east asia and north america

no price like home global house prices 1870 2012 how have house prices evolved in the long run this paper presents annual house price indices for 14 advanced economies since 1870 based on extensive data collection we are able to show for the first time that house prices in most industrial economies stayed constant in real terms from the 19th to the mid 20th century but rose sharply in recent decades land prices not construction costs hold the key to understanding the trajectory of house prices in the long run residential land prices have surged in the second half of the 20th century but did not increase meaningfully before we argue that before world war ii dramatic reductions in transport costs expanded the supply of land and suppressed land prices since the mid 20th century comparably large land augmenting reductions in transport costs no longer occurred increased regulations on land use further inhibited the utilization of additional land while rising expenditure shares for housing services increased demand

real exchange rates and time varying trade costs this paper re examines the empirical modeling of purchasing power parity ppp deviations in the presence of commodity market frictions first we show that a specific type of smooth transition models can closely approximate the functional form of the theoretical adjustment mechanism derived by dumas 1992 dynamic equilibrium and the real exchange rate in a spatially separated world review of financial studies 5 2153 180 for the case of constant as well as changing trade costs second we develop for the first time an empirical model of the real exchange rate which allows for changes in the degree of market integration by employing a long span of data on the dollar sterling real exchange rate and a micro founded proxy for trade frictions we provide novel evidence of a significant relationship between the persistence of the real exchange rate and the level of trade costs this finding suggests that both the difficulty of detecting ppp and the extend of rogoff s puzzle vary over time with the degree of trade restrictiveness finally we highlight policy repercussions of our results

introducing incentives in the market for live and cadaveric organ donations we evaluate the introduction of monetary incentives in the market for live and cadaveric organ donations we show that monetary incentives would increase the supply of organs for transplant sufficiently to eliminate the very large queues in organ markets and the suffering and deaths of many of those waiting without increasing the total cost of transplant surgery by more than about 12 percent we build on the value of life literature and other parts of economic analysis to estimate the equilibrium cost of live transplants for kidneys and livers we also show that market price for kidneys will be determined by the cost of live donations even though most organs will come from cadavers

what separates us sources of resistance to globalization with increasing sophistication economists have been estimating gravity equations for five decades robust evidence shows that borders and distance impede trade by much more than tariffs or transports costs can explain we therefore advocate investigation of other sources of resistance despite the greater difficult involved in measuring and modelling them from our selective review of recent findings a unifying explanation emerges a legacy of historical isolation and conflict forged a world economy in which neither tastes nor information are homogeneously distributed cultural difference and inadequate information manifest themselves most strongly at national borders and over distance

norms and contracting we argue that contracts establish the norms of a relationship and that individuals incur disutility when deviating from these norms in a laboratory experiment we allow agents to make simple contracts before they play one of four games and the most effective contract always includes an unenforceable handshake agreement to take the first best action in three games a contract with only this handshake agreement is at least weakly optimal the handshake is particularly effective in games with strategic complements our results highlight an explanation for contractual incompleteness establishing a norm can effectively substitute for weak enforceable restrictions this paper was accepted by brad barber teck ho and terrance odean special issue editors

sacred values the effect of information on attitudes toward payments for human organs abstract are attitudes about morally controversial and often prohibited market transactions affected by information about their costs and benefits we address this question for the case of payments for human organs we find in a survey experiment with us residents n 3 417 that providing information on the potential efficiency benefits of a regulated price mechanism for organs significantly increased support for payments from a baseline of 52 percent to 71 percent the survey was devised to minimize social desirability biases in responses and additional analyses validate the interpretation that subjects were reflecting on the case specific details provided rather than just reacting to any information

globesity the effects of globalization on obesity and caloric intake abstract we examine the effect of globalization in its economic and social dimensions on obesity and caloric intake namely the so called globesity hypothesis our results suggest a robust association between globalization and both obesity and caloric intake a one standard deviation increase in globalization is associated with a 23 8 percent increase in obese population and a 4 3 percent rise in calorie intake the effect remains statistically significant even after using an instrumental variable strategy to correct for some possible reverse causality and ommited variable bias a lagged structure and corrections for panel standard errors however we find that the primary driver of the globesity phenomenon is the social rather than the economic dimension of globalization and specifically the effect of changes in information flows and social proximity on obesity a one standard deviation increase in social globalization increased the percentage of obese population by 13 7 percent

a non cournot model of voluntary collective action the interaction of selfish rational actors in the provision of a public good is analyzed in an attempt to explain recent experimental findings as well as real world cases of voluntary collective action the model which allows for more sophisticated behavior than that assumed by the conventional cournot theory predicts a higher level of collective action that that theory the impacts of income effects and of the price elasticity of demand for the public good are given special emphasis

the welfare cost of lawlessness evidence from somali piracy in spite of general agreement that establishing the rule of law is central to properly functioning economies little is known about the cost of law and order breakdowns this paper studies a specific context of this by estimating the effect of somali piracy attacks on shipping costs using data on shipping contracts in the dry bulk market to estimate the effect of piracy we look at shipping routes whose shortest path exposes them to piracy and find that the increase in attacks in 2008 led to around an 8 to 12 increase in costs from this we calculate the welfare loss imposed by piracy we estimate that generating around 120 usd million of revenue for somali pirates led to a welfare loss in excess of 630 usd million making piracy an expensive way of making transfers

hedging price volatility using fast transport abstract purchasing goods from distant locations introduces a significant lag between when a product is shipped and when it arrives these transit lags are trade barriers for firms facing volatile demand who must place orders before knowing the resolution of demand uncertainty we provide a model in which airplanes bring producers and consumers together in time fast transport allows firms to respond quickly to favorable demand realizations and to limit the risk of unprofitably large quantities during low demand periods the model predicts that the likelihood and extent to which firms employ air shipments is increasing in the volatility of demand they face decreasing in the air premium they must pay and increasing in the contemporaneous realization of demand we confirm all three conjectures using detailed us import data fast transport thus provides firms with a real option to smooth demand volatility on international markets and we provide simple calculations of that option value this enables us to identify how the option value relates to goods characteristics and to changes in air transport premia associated with technological and policy change including the introduction of jet engines and liberalization of trade in air services

globalisation and the spatial concentration of production new trade theory models predict that freer trade increases the spatial concentration of industrial production across countries while nations with large home markets and central geographical location become increasingly attractive business locations small peripheral countries gradually deindustrialize using data for 26 industries 20 oecd countries and 20 years we investigate the empirical validity of this claim separating out the role of home market size from geographical factors and using various panel methods we find robust evidence in line with theory freer trade has indeed magnified the importance of domestic demand and geographical location for the pattern of industrial production across the globeand has therefore exacerbated spatial disparities

markets and morality it is common knowledge that adam smith the acknowledged father of economics as we know it had written the theory of moral sentiments 1759 before he wrote the wealth of nations 1776 more sophisticated students of economics today would also know that adam smith held the chair in moral philosophy from 1752 after a year as professor of logic at glasgow university therefore that economics has evolved from moral philosophy and has affinity by birth with it and therefore is a moral science should not surprise anyone yet the analysis of the interaction between economics and moral philosophy or perhaps simply morality has raised interesting issues over time in the following i concentrate on a few salient ones today

the quantity and quality of life and the evolution of world inequality gdp per capita is usually used to proxy for the quality of life of individuals living in different countries welfare is also affected by quantity of life however as represented by longevity this paper incorporates longevity into an overall assessment of the evolution of cross country inequality and shows that it is quantitatively important the absence of reduction in cross country inequality up to the 1990s documented in previous work is in stark contrast to the reduction in inequality after incorporating gains in longevity throughout the post world war ii period health contributed to reduce significantly welfare inequality across countries this paper derives valuation formulas for infra marginal changes in longevity and computes a full growth rate that incorporates the gains in health experienced by 96 countries for the period between 1960 and 2000 incorporating longevity gains changes traditional results countries starting with lower income tended to grow faster than countries starting with higher income we estimate an average yearly growth in full income of 4 1 percent for the poorest 50 percent of countries in 1960 of which 1 7 percentage points are due to health as opposed to a growth of 2 6 percent for the richest 50 percent of countries of which only 0 4 percentage points are due to health additionally we decompose changes in life expectancy into changes attributable to 13 broad groups of causes of death and three age groups we show that mortality from infectious respiratory and digestive diseases congenital perinatal and ill defined conditions mostly concentrated before age 20 and between ages 20 and 50 is responsible for most of the reduction in life expectancy inequality at the same time the recent effect of aids together with reductions in mortality after age 50 due to nervous system senses organs heart and circulatory diseases contributed to increase health inequality across countries

economics as a moral science economists frequently make judgments about economic welfare but there is today little discussion of the foundations of welfare economics it is assumed either that there is unanimity of interests or that there is general acceptance of utilitarianism this means that economics cannot address many key policy issues and that important differences in ethical views cannot be recognized this paper argues that it is a legitimate exercise of economic analysis to examine the consequences of different ethical positions taking case studies of employment as a macroeconomic objective and the role of capabilities in the measurement of economic performance

rising trade costs agglomeration and trade with endogenous transaction costs while transport costs have fallen the empirical evidence also points at rising total trade costs in a model of industry location with endogenous transaction costs that seeks to replicate features from the machinery industry we show how and under which conditions a decline in transport costs can lead to an increase in the total cost of trade the subtle relationship between endogenous transport costs and the sensitivity of trade

the effectiveness of alternative preference elicitation procedures in predicting choice in a large scale national study the authors evaluated the effectiveness of several preference elicitation techniques for predicting choices the criteria for accuracy included both individual hit

energy growth and evolution towards a naturalistic ontology of economics in recent years new approaches to the integration of economics and thermodynamics have been developed which build on the physics of open non equilibrium systems the so called maximum entropy production principle i review these contributions in the light of the implications for economic ontology i e the question what the fundamental constituents of real world economic phenomena are i argue in favor of the naturalization of economic ontology using the phenomenon of economic growth as my workhorse and i explore the implications for the cross disciplinary foundations of ecological economics the paper shows how economic growth can be conceived as a natural process that is driven by fundamental physical forces the argument proceeds in three steps after a short review of recent research on the linkage between energy and growth i establish the connection with bioeconomic theories about evolution that allow restating the role of lotka s maximum power principle mpp as a property of open non equilibrium flow systems with sufficient degrees of freedom of structural adaptation the mpp is then related to the recent literature on maximum entropy production mep especially as deployed in the earth sciences economic growth can be seen as resulting from evolutionary adaptations of flow gradients in economic systems that increase throughputs of exergy and generation of work and which thereby enhance the capacity of the earth system to maximize entropy production this framework offers fresh perspectives on a number of issues in research and policy which i discuss in the conclusion

shipping the good horses out this paper formalizes the alchian allen 1964 theorem within a vertically differentiated goods general equilibrium model in contrast to the existing literature equilibrium prices depends on the transportation cost it shows that the eect of a xed transportation cost regardless of quality tilts the importing region s demand towards the consumption of higher quality goods the model extends the alchian allen theorem by showing that the strength of this eect depends on the importing region s endowment specically if the importing region is endowed with the imported goods of similar quality mix the eect is even stronger we also show that the importing region s market size and preferences matter to the strength of the eect using auction data of australian thoroughbred yearlings we conrm that better horses are shipped out further furthermore consistent with the model s prediction the strength of the alchian allen eect depends on the endowment of the importing regions

cabotage sabotage the curious case of the jones act abstract this paper examines the economic implications of the jones act which restricts domestic waterborne shipments to american vessels since the passage of this cabotage law a century ago a plausibly exogenous rise in foreign competition has contributed to the closure of most american shipyards and to a decline in american built ships thus the jones act requirements have become more onerous over time the results show that domestic shipments are less likely to be transported via water than imports of the same good into the same state exploiting the decline in jones act eligible vessels over time additional results show that this cabotage law has disproportionately decreased domestic water trade especially in coastal states these findings support common but to date unverified claims that the jones act impedes domestic trade

commodity storage and the market effects of biofuel policies the author 2016 legislation passed in 2007 by the u s congress increased by about 1 3 billion bushels the net amount of corn required to be processed annually into ethanol for motor fuel use we estimate that corn prices were about 30 higher from 2006 to 2014 than they would have been without this demand increase we develop a partially identified structural vector autoregression model our identification strategy is unique in the literature because it enables us to estimate the effects of transitory shocks such as weather separately from the effects of persistent shocks such as the increased ethanol mandate moreover by only partially identifying our model we show how to generate robust conclusions without strong identifying assumptions

marketplaces markets and market design marketplaces are often small parts of large markets and both markets and marketplaces come in many varieties market design seeks to understand what marketplaces must accomplish to enable different kinds of markets marketplaces can have varying degrees of success and there can be marketplace failures i ll discuss labor markets like the market for new economists and also markets for new lawyers and doctors that have suffered from the unraveling of appointment dates to well before employment begins markets work best if they enjoy social support but some markets are repugnant in the sense that some people think they should be banned even though others want to participate in them laws banning such markets often contribute to the design of illegal black markets and this raises new issues for market designers i ll briefly discuss markets and black markets for narcotics marijuana sex and surrogacy and the design of markets for kidney transplants in the face of widespread laws against and broader repugnance for compensating organ donors i conclude with open questions and engineering challenges

rotten kids purity and perfection bergstrom has shown that becker s rotten kid theorem holds in a world of two commodities if their utilities are transferable the present paper identifies a further circumstance in which the theorem is valid we show that it also holds in the absence of transferable utility if the externalities are assumed to take the form of a single pure public good

what goes around comes around export enhancing effects of import tariff reductions abstract in international trade transportation requires a round trip for which a transport firm has to commit to shipping capacity that is sufficient to meet the maximum shipping volume this may cause the backhaul problem trade theory suggests that facing the problem transport firms with market power adjust their freight rates strategically when import tariffs change as a consequence a country reducing its import tariffs may experience an increase in exports as well as imports using worldwide data covering 1995 2007 we find evidence that supports these predictions a 1 reduction in an importer s tariffs increases the import freight rates by around 0 8 decreases the export freight rates by around 1 1 and increases the export quantity by 0 6 to 1 these findings indicate a new mechanism through which import tariff reductions lead to export expansions

distance time and specialization lean retailing in general equilibrium transport time increases with distance traveled and time is valuable we show the implications of these facts for global specialization and trade products where timely delivery is important will be produced near the source of final demand where wages will be higher as a result in the model timely delivery is important because it allows retailers to respond to final demand fluctuations without holding costly inventories and timely delivery is possible only from nearby locations using a unique dataset that allows us to measure the retail demand for timely delivery we show that the sources of u s apparel imports have shifted in the way predicted by the model with products for which timeliness matters increasingly imported from nearby countries jel f1 transporting goods and people costs time and money and both transport fees and time in transit generally increase with the distance traveled these facts imply an incentive to economize on distance and the equilibrium effects

one chance in a million altruism and the bone marrow registry stem cell transplants save lives of many patients with blood diseases donation is painful but rarely has lasting adverse effects patients can accept transplants only from donors with compatible immune systems those lacking a sibling match must seek donations from the general population the probability that two unrelated persons are compatible is less than 1 10 000 health authorities maintain a registry of several million genetically tested potential donors who agree to donate if asked we find that the benefits of adding registrants of every race exceed costs we also explore the peculiar structure of voluntary public good provision that faces potential donors jel d64 h41 i11 aq 1

trade and climate policies do emissions from international transport matter this paper provides orders of magnitude of the importance of co2 emissions from international transport freight activities under a variety of scenarios regarding trade and climate policies it is based on a stylized multi region multi sector cge model that includes the four modes of international transport air water road and rail and where choices regarding the energy mix and transport mode have been endogeneized a separate decomposition of emission changes into the well known scale composition and technique effects is provided scale effects turn out to be roughly double in international transport than in exports while technique effects are weaker due to less substitutability between energy inputs as a result international transport represents half of the world increase in global emissions when trade liberalization is considered isolately when trade liberalization is coupled with a carbon tax limited to rich countries international transport represents roughly one eigth of the carbon leakage effect

commodity trade and the carry trade a tale of two countries persistent interest rate differentials account for much of the currency carry trade profitability commodity currencies offer high interest rates on average while countries that export finished goods tend to have low interest rates we develop a general equilibrium model of international trade and currency pricing where countries have an advantage in producing either basic inputs or final goods in the model domestic production insulates commodity producing countries from global productivity shocks forcing final good producers to absorb them commodity currency exchange rates and risk premia increase with productivity differentials and trade frictions these predictions are strongly supported in the data this article is protected by copyright all rights reserved

getting more organs for transplantation the united states and most other nations suffer from a shortage of human organs for transplant in the united states over 120 000 people are on waiting lists for organ transplant and every year over 10 000 people die while waiting organ procurement and transplantation network there are a number of fronts on which research has made progress to address this shortage but there is still significant work to be done we describe how organs are acquired and allocated strategies that have been implemented to increase the number or organ donations for transplantation from living donors and work we are conducting to understand how we can recover more organs from deceased donors for example how organs are allocated can moderate their scarcity not just through efficiencies in allocation but also through changes in donor behavior we will describe a market design being explored in israel to increase organ donor registration by providing priority on organ waiting lists for individuals who previously registered as organ donors we will also report results that raise concern over policies that have recently been implemented in the united kingdom and several us states namely changing the way the organ registration question is asked to a mandated choice frame organs for transplant can be recovered from living donors and deceased donors living donors give an organ while alive living donation of kidneys which represented 96 per cent of all us living organ donations in 2012 optn is possible since humans have two kidneys but can live a healthy life with only one allowing the other to be removed and donated

the value of risk measuring the service output of u s commercial banks rather than charging direct fees banks often charge implicitly for their services via interest spreads as a result much of bank output has to be estimated indirectly in contrast to current statistical practice dynamic optimizing models of banks argue that compensation for bearing systematic risk is not part of bank output we apply these models and find that between 1997 and 2007 in the u s national accounts on average bank output is overestimated by 21 percent and gdp is overestimated by 0 3 percent moreover compared with current methods our new estimates imply more plausible estimates of the share of capital in income and the return on fixed capital

estimating the effects of the container revolution on world trade many historical accounts have asserted that containerization triggered complementary technological and organizational changes that revolutionized global freight transport we are the first to suggest an identification strategy for estimating the effects of the container revolution on world trade our empirical strategy exploits time and cross sectional variation in countries first adoption of container facilities and combines it with product level variation in containerizability and container usage applying our container variables on a large panel of product level trade flows for the period 1962 1990 our estimates suggest economically large concurrent and cumulative effects of containerization and lend support for the view of containerization being a driver of 20th century economic globalization

bare promises an experiment abstract is truth value of a statement what lying aversion is all about we propose an experimental test and find only limited support in this context with bare promises we also test for guilt aversion and again find only limited support

social image concerns and prosocial behavior field evidence from a nonlinear incentive scheme abstract using longitudinal data on the entire population of blood donors in an italian town we examine how donors respond to a nonlinear award scheme that rewards them with symbolic prizes medals when they reach certain donation quotas our results indicate that donors significantly increase the frequency of their donations immediately before reaching the thresholds for which the rewards are given but only if the prizes are publicly announced in the local newspaper and awarded in a public ceremony the results are robust to several specifications sample definitions and controls for observable and unobservable heterogeneity our findings indicate that social image concerns are a primary motivator of prosocial behavior and that symbolic prizes are most effective as motivators when they are awarded publicly we discuss the implications of our findings for policies aimed at incentivizing prosocial behavior

a copula garch approach for analyzing dynamic conditional dependency structure between liquefied petroleum gas freight rate product price arbitrage and crude oil price abstract global liquefied petroleum gas lpg trade shows an increasing trend but is under researched this paper focuses on the lpg market and aims to model the dependence dynamics among lpg freight rates crude oil price and propane location arbitrage conditional copula garch model is applied to estimate dependencies different types of copulas with both time invariant and time varying dependence structures are fitted and their suitability has been compared the findings suggest that firstly baltic lpg blpg freight rate and the arbitrage between propane far east and middle east prices have conditional time varying dependence and the dependence is higher in market downturns furthermore blpg and the arbitrage between far east and us propane prices have symmetric dependence and such a relationship has strengthened since 2013 secondly middle east propane price is found to have the strongest correlation with crude oil prices compared to far east and us propane prices indicating higher sensitivity to crude oil price changes last but not least the relationship between crude oil and blpg is relatively weak and mostly positive

long range growth economic development in the global network of air links we study the impact of international long distance flights on the global spatial allocation of economic activity to identify causal effects we exploit variation due to regulatory and technological constraints which give rise to a discontinuity in connectedness between cities at a distance of 6000 miles we show that these air links have a positive effect on local economic activity as captured by satellite measured night lights to shed light on how air links shape economic outcomes we first present evidence of positive externalities in the global network of air links connections induce further connections we then find that air links increase business links showing that the movement of people fosters the movement of capital in particular this is driven mostly by capital flowing from high income to middle income but not low income countries taken together our results suggest that increasing interconnectedness generates economic activity at the local level by inducing links between businesses but also gives rise to increased spatial inequality locally and potentially globally

when do market games have transferable utility a pure exchange economy generates a market game in which the allocations achievable by any coalition are determined by the initial endowments of its members subject to certain regularity conditions it is shown that for a market game it is possible to find utility representations for each consumer so that the game can be treated as a game with transferable utility if and only if indirect utility of all consumers can be represented in the gorman polar form this is the class for which aggregate demand behaves as if it were the demand of a single consumer journal of economic literature classification numbers 021 022 cc 1985 academic press inc

the decoupling of emerging economies theoretical and empirical puzzle with the growing importance of the emerging economies ees in the international scene a lively debate has begun on whether the national economic cycles are converging or the cycles of ees and advanced economies aes are becoming disconnected the so called hypothesis of decoupling of ees from the aes given the important practical implications that decoupling could have for example on the definition of national and international economic policies and on business strategies aimed at investment diversification and risk management the question kindles not only the interest of academics but also policymakers and practitioners are very interested in the issue the decoupling question has been long debated in different circles and from different points of view this survey aims to retrace the steps of this debate and to provide some suggestions for future empirical researches

the international effects of china s growth trade and education booms china s international trade flows have increased by 500 since 1992 far outstripping gdp growth likewise tertiary education enrollments have increased by 300 we simulate these changes using a multi sector growth model of the chinese and usa economies a decade of trade biased growth in china is found to have a large effect on the usa economy raising gdp approximately 3 4 5 percentage points we also show that the trade bias in china s growth accounts for more than half of the observed growth in tertiary enrolments in china in contrast neutral growth has practically no effect on usa incomes or china s stock of skilled labour finally the simulations reveal that china s education boom per se has practically no long run impact on the usa economy the results thus indicate that the pattern of productivity growth in exports sectors as might be caused by falling trade costs has been critical in transmitting benefits of chinese growth to the world economy they also point to an important link between falling trade costs and human capital formation

conditional cooperation and voluntary contributions to public goods we compare a partners condition where the same small group of subjects plays a repeated publi c good game to a strangers condition where subjects play this game in changing group formations subjects in the partners conditi on contribute from t he first period on significantly more to the publi c good than subjects in the strangers conditi on in the strangers conditi on contributions show a continual decay whil e in the partners conditi on contributions fluctuate on a high level until t hey decrease in the final periods we interpret subjects behavior in terms of conditional cooperation which is characterized by both future oriented and reactive behavior

the price of a price on the crowding out and in of social norms we study the impact of financial incentives on social approval showing that in a society with altruists and egoists who all care about social approval introducing financial incentives to agents to contribute to a socially desirable outcome may actually decrease the number of contributions withdrawing the financial incentive does not restore the norm to contribute and may reduce the level of contributions even further when the norm has disappeared it may be possible to restore voluntary contributions by first introducing high price and then reducing it but such an operation is costly and its success uncertain

measuring international trade costs the costs of international trade have become an increasingly important item in trade negotiations under the heading trade facilitation and element of trade theory but definition and measurement of trade costs remain in their infancy this paper argues that the most conceptually appropriate measure is the gap between cost insurance freight cif and free on board fob values of traded goods but that this must be measured on a consistent volume of trade such data are only available for a few countries we calculate cif fob gap values for the three largest trading nations that report such data australia brazil and the usa these values provide plausible estimates of ad valorem trade costs for the three importing countries and for all countries exports the estimates indicate that although trade costs have fallen over the last two decades average trade costs now exceed the average tariff rate on imports into the usa and australia country rankings by the cif fob gap values differ significantly from those by commonly used proxies for trade costs such as the indicators of time and cost in the world bank s doing business database and analysis based on such proxies is likely to produce misleading results

the effect of cadaveric kidney donations on living kidney donations an instrumental variables approach i introduction as of march 19 2012 there are 113 465 patients awaiting an organ transplant only 28 535 transplants were performed in the previous year 1 the critical shortage of organs is the result of an artificial price ceiling instituted by the national organ transplant act nota of 1984 which legislates financial compensation for organs to be unlawful for this reason the current supply of organs is generated by altruistic cadaveric and living donors lds these donors willfully supply organs without any expectation of compensation but the decision to donate is not the same for both cadaveric and lds unlike cadaveric donors cds where the functional value of the organ to the donor is small lds must consider the potential long term healthcare costs associated with donating an organ these costs include an increase in mortality risk morbidity risk loss in quality of life and lost wages generated by time away from work during recovery potential lds and their recipients must weigh these costs versus alternative sources of organs cadaveric organs and other lds and consider their own future demand for organs when deciding to donate even so the number of lds has increased dramatically from 1 769 in 1988 to 5 955 in 2008 an increase of 237 figure 1 over the same period the percentage of blood related or biological donors has decreased from 93 to 60 of all lds several factors can account for these changes introduction of tax incentives for organ donation compatibility websites relaxing donor match requirements and the implied responsiveness of potential lds to increases in the number of persons on the waiting list for deceased donors an increase from 40 000 to 52 000 from 2000 to 2009 2 figure 1 omitted the topic of organ donation has received considerable attention in both the academic literature and the press but there is limited empirical evidence identifying potential causes for the increase in ld rates the trade offs between living and cadaveric kidney donations and the change in ld composition from primarily blood related donors to an increase in non blood related donors 3 two concurrent studies address the substitutability between living and cadaveric donations howard 2011 utilized geographic variation in waiting times for organ transplants to estimate the substitution effect the author finds that a decrease of five kidneys from cadaveric donations is correlated with one additional living kidney donation sweeney 2010 exploits a discontinuity in panel reactive antibody pra 4 blood levels within a regression discontinuity framework and finds a 10 increase in the likelihood of receiving a cadaveric donation decreases the likelihood of receiving a living kidney donation by 2 3 we find similar results as these studies but we utilize a completely different identification method in this article we propose using variation in traffic safety laws between states as an instrumental variable to identify the substitution patterns between living and cadaveric kidney donations a benefit of our approach is that we can analyze how obesity influences the supply of donations the demand for transplantation and the use of living versus cadaveric donations we also analyze substitutability across classes of lds which helps to establish the plausibility of our results and the mechanisms underlying the substitution effects with respect to motor vehicle safety laws we study how changes in seat belt helmet and speed limit laws indirectly affect the number of living donations by shifting the supply of cadaveric organ donations previous studies have considered how changes in these safety laws would affect motor vehicle fatalities and cadaveric donations according to the organ procurement and transplantation network optn roughly 16 of cadaveric donations are the result of a motor vehicle accident mva

the trade reducing effects of market power in international shipping abstract developing countries pay substantially higher transportation costs than developed nations which leads to less trade and perhaps lower incomes this paper investigates price discrimination in the shipping industry and the role it plays in determining transportation costs in the presence of market power shipping prices depend on the demand characteristics of goods being traded we show theoretically and estimate empirically that ocean cargo carriers charge higher prices when transporting goods with higher product prices lower import demand elasticities and higher tariffs and when facing fewer competitors on a trade route these characteristics explain more variation in shipping prices than do conventional proxies such as distance and significantly contribute to the higher shipping prices facing the developing world a simple back of the envelope calculation suggests that eliminating market power in shipping would boost trade volumes by 5 9 for the us to 15 2 for latin america our findings are also important for evaluating the impact of tariff liberalization cargo carriers decrease shipping prices by 1 2 for every 1 reduction in tariffs

why do people keep their promises an experimental test of two explanations numerous psychological and economic experiments have shown that the exchange of promises greatly enhances cooperative behavior in experimental games this paper seeks to test two theories to explain this effect the first posits that individuals have a preference for keeping their word the second assumes that people dislike letting down others payoff expectations according to the latter account promises affect behavior only indirectly because they lead to changes in the payoff expectations attributed to others i conduct an experiment designed to distinguish between and test these alternative explanations the results demonstrate that the effects of promises cannot be accounted for by changes in payoff expectations this suggests that people have a preference for promise keeping per se

when individual preferences defy sustainability can merit good arguments close the gap in this paper we discuss how merit good arguments may contribute to discussions about sustainability to this end we clarify how merit good arguments deviate from individual preferences and relate the justification for deviations from individual preferences to two conceptions of well being an informed preference satisfaction and a perfectionist conception building on this framework we analyze how merit good arguments can be helpful for discussing sustainability as justice what challenges merit good arguments pose to future generations and whether they can serve as a normative justification for green nudges the analysis yields two main insights first a reflection on the concept of merit goods is helpful in sorting out the different justifications that sustainability interventions may rely on in particular it allows separating the challenges of redistribution internalization of externalities and increasing individual consumption of particular merit goods such as health care or education more clearly second the precise notion of merit goods by itself however only offers a limited contribution and does not represent a blank check to justify deviations from individual preferences

causes of world trade growth in agricultural and food products 1951 2000 a demand function approach the objective of the present study is to analyse the causes of the growth of international agricultural and food trade in volume terms from 1951 to 2000 the results suggest that income growth has been the principal reason for this expansion while exchange rate stability and the real price of agricultural products played only a minor role multilateral trade liberalization and trade costs given their long term stability are not elements that could have stimulated their growth finally the intensive liberalization of trade which took place in various economic regions especially in europe became a key factor in promoting agricultural trade among the countries participating in regional trade agreements the study results also indicate that the determinants of trade growth for these goods were different to those for other goods and other periods

the judgement policies of negotiators and the structure of negotiation problems the structure of negotiation problems refers to characteristics of their feasible settlement spaces and efficient frontiers these characteristics are determined by the joint distribution of negotiators utilities across possible settlements variations in negotiators judgment policies i e how they judge the utility of potential settlements may result in distinctly different negotiation problem structures depending on the structure of the negotiation problem settlements that are efficient maximize joint utility and minimize inequality are sometimes possible sometimes not when such settlements are possible different strategies may be necessary to reach them they sometimes can be reached only by a compromise strategy in which the disputants split their differences on each issue sometimes only by a horsetrading strategy involving trade offs among extreme values on issues sometimes by either and sometimes by neither strategy settlements on the efficient frontier that yield equal utility to both negotiators will sometimes leave both relatively well satisfied sometimes not when equal valued settlements yield low levels of utility negotiators are likely to feel dissatisfied and may presume that the other negotiator must be comparatively better satisfied even seemingly simple negotiation problems often pose a high degree of cognitive complexity in the face of uncertainty about the nature of the problem structure negotiators may resort to simple bargaining tactics e g incrementally offering concessions on the issue for which the marginal rate of loss of utility is least for many commonly encountered problem structures such tactics lead toward satisfactory settlements but not always analyses of the judgment policies of negotiators and resultant negotiation problem structures will contribute to better understanding of negotiation processes and help to inform the design of negotiation support systems

a fresh look at the rotten kid theorem and other household mysteries gary becker s rotten kid theorem asserts that if all family members receive gifts of money income from a benevolent household member then even if the household head does not precommit to an incentive plan for family members it will be in the interest of selfish family members to maximize total family income i show by examples that the rotten kid theorem is not true without assuming transferable utility i find a simple condition on utility functions that is necessary and sufficient for there to be the kind of transferable utility needed for a rotten kid theorem while restrictive these conditions still allow one to apply the strong conclusions of the rotten kid theorem in an interesting class of examples

premediation analysis of the energy taxation dispute in finland abstract this paper illustrates a real application of negotiation and decision analytic techniques to a long continued dispute between industry and the environmentalists in finland specifically we applied the so called premediation analysis to discover efficient compromise solutions for finland s future energy taxation problem the author s role was to act as a neutral mediator the premediation included the elicitation of the fundamental objectives of the disputants as well as their preferences relating to the issues under negotiation the quantitative analysis pointed out several efficient compromise solutions to the dispute implying that it was worth negotiating rather than unilaterally seeking to influence the state authorities this induced the participants to start unofficial face to face negotiations mediated by the author the compromise achieved together with the contacts created during the post analysis negotiations contributed immediately to the finnish government s first move towards a real ecological tax reform later on the government implemented a refund scheme for the industry that resembled by and large the one outlined in the post analysis negotiations this study thus provides a clear indication of the usefulness of the premediation concept in an unsettled conflict situation where the disputants have not earlier tried to resolve their disagreements by negotiating

financial incentives for kidney donation a comparative case study using synthetic controls although many commentators called for increased efforts to incentivize organ donations theorists and some evidence suggest these efforts will be ineffective studies examining the impact of tax incentives generally report zero negative coefficients but these studies incorrectly define their tax variables and rely on difference in differences despite likely failures of the parallel trends assumption we identify the causal effect of tax legislation to serve as an organ donor on living kidney donation rates in the u s states using more precise tax data and allowing for heterogeneous time variant causal effects employing a synthetic control method we find that the passage of tax incentive legislation increased living unrelated kidney donation rates by 52 percent in new york relative to a comparable synthetic new york in the absence of legislation it is possible that new york is unique but our methodology does not allow us to measure accurately effects in other states

identifying pareto optimal settlements for two party resource allocation negotiations abstract we explore models to identify pareto optimal outcomes in two party multiple program resource allocation post settlement settlement negotiations the approximation of the contract curve that is the set of pareto optimal outcomes is also discussed we consider the case where the parties split a shared hard resource an application of the models to a resource allocation problem in a finnish university is also discussed

the ethics of incentivizing the uninformed a vignette study abstract our recent working paper ambuehl ockenfels and stewart 2017 shows theoretically and experimentally that people with higher costs of information processing respond more to an increase in the incentive for a complex transaction and decide to participate based on a worse understanding of its consequences here we address the resulting tradeoff between the principle of informed consent and the principle of free contract respondents to our vignette study on oocyte donation overwhelmingly favor the former and support policies that require donors to thoroughly understand the transaction this finding helps design markets that are not only efficient but also considered ethical

altruism fertility and the value of children health policy evaluation and intergenerational welfare abstract this paper accounts for the value of children and future generations in the evaluation of health policies this is achieved through the incorporation of altruism and fertility in a value of life type of framework we are able to express adults willingness to pay for changes in child mortality and also to incorporate the welfare of future generations in the evaluation of current policies our model clarifies a series of puzzles from the literature on the value of life and on intergenerational welfare comparisons we show that by incorporating altruism and fertility into the analysis of the recent u s experience the estimated welfare gain of a young adult from reductions in mortality easily doubles

airplanes and comparative advantage abstract airplanes are a fast but expensive means of shipping goods a fact which has implications for comparative advantage the paper develops a ricardian model with a continuum of goods which vary by weight and hence transport cost comparative advantage depends on relative air and surface transport costs across countries and goods as well as stochastic productivity a key testable implication is that the u s should import heavier goods from nearby countries and lighter goods from faraway counties this implication is tested using detailed data on u s imports from 1990 to 2003 looking across goods the u s imports nearby exporters have lower market share in goods that the rest of the world ships by air looking across exporters for individual goods distance from the us is associated with much higher import unit values these effects are large which establish that the model identifies an important influence on specialization and trade

global production sharing exploring australia s competitive edge cross border dispersion of production processes within vertically integrated global industries global production sharing has been an increasingly important structural feature of economic globalisation in the recent decades this paper examines patterns and determinants of global production sharing with an emphasis on how australian manufacturing fits into global production networks gpns though australia is a minor player in gpns there is evidence that australian manufacturing has a distinct competitive edge in specialised skill intensive tasks in several industries such as aircraft medical devices machine tools measuring and scientific equipment and photographic equipment specialisation in high value to weight components and final goods within gpns which are suitable for air transport helps australian manufacturing to overcome the tyranny of distance in world trade being predominantly relationship specific australian gpn exports are not significantly susceptible to real exchange rate appreciation

the elasticity of taxable income during the 1990s new estimates and sensitivity analyses author affiliation seth h giertz sgiertz2 unl edu acknowledgment the author wishes to thank david weiner ed harris bob dennis doug hamilton tom woodward emmanuel saez chris bollinger and three anonymous referees for their comments and assistance 1 introductioneconomists have long recognized that taxation creates economic inefficiency by distorting relative prices often between leisure and all other goods in the economy even a broad based income tax can have substantial efficiency costs so long as leisure remains untaxed harberger 1964 uses this as motivation for comparing the efficiency implications of direct versus indirect taxation in so doing he shows how labor supply elasticities can be used to measure the efficiency implications of income taxation 1 harberger s analysis had a profound influence on public and labor economists spurring increased research into labor supply elasticities which were seen as proxies for the efficiency costs from taxation more than two decades after harberger economists began to emphasize the variety of other margins over which taxes can distort behavior in addition to hours worked these economists noted that these other behavioral responses may too have important implications for efficiency an important building block in the evolution of this literature was set forth by slemrod 1990 who presented a hierarchy of behavioral responses to taxation slemrod divided behavior into three categories based on their responsiveness to taxes his least responsive category real responses includes individuals changing consumption and work patterns and businesses altering investment and production decisions second in order of responsiveness is circumvention which includes both illegally evasion and legally avoidance bypassing the tax system 2 in the case of evasion income is concealed from tax authorities or factors that offset tax liabilities such as expenses and deductions are inflated beyond what is legally permitted in the case of avoidance income is shifted in order to receive more favorable tax treatment diverting income into a tax deferred retirement account is an example of avoidance 3 included in circumvention is the expenditure of time and money necessary to avoid or evade taxation third on the hierarchy and the most responsive is the timing of income receipt which includes pulling the receipt of income into the previous year or pushing it into the next in order to take advantage of more favorable tax treatment while not altering real behavior 4 slemrod further recognizes that the type of behavioral response could have implications for both tax revenue and tax incidence and in some cases efficiency predating slemrod s insights lindsey 1987 produced elasticity estimates for taxable income although what lindsey termed taxable income more closely approximates adjusted gross income agi instead of labor supply 5 lindsey s estimated elasticities were much larger than the labor supply literature would have suggested lindsey emphasized the revenue implications of the elasticity of taxable income eti but not its efficiency implications building on slemrod and lindsey feldstein 1995 produced eti estimates but went much further than lindsey in describing the behaviors that could affect taxable income he argued that many of these behaviors were not captured by labor supply elasticities furthermore feldstein posited that income taxation creates economic inefficiency not only by distorting the relative price between labor and leisure but more broadly by distorting the relative price between goods or activities that are taxed and those that are not taxed since leisure is not the only untaxed activity for example in response to taxes not only work hours but also work effort might change

transportation costs and international trade in the second era of globalization while the precise causes of postwar trade growth are not well understood declines in transport costs top the lists of usual suspects however there is remarkably little systematic evidence documenting the decline this paper brings to bear an eclectic mix of data in order to provide a detailed accounting of the time series pattern of shipping costs the ad valorem impact of ocean shipping costs is not much lower today than in the 1950s with technological advances largely trumped by adverse cost shocks in contrast air shipping costs have dropped an order of magnitude and airborne trade has grown rapidly as a result as a result international trade has also experienced a significant rise in speed

the place premium bounding the price equivalent of migration barriers large international differences in the price of labor can be sustained by differences between workers or by natural and policy barriers to worker mobility we use migrant selection theory and evide

monetary policy and the global housing bubble what caused the housing boom of the 2000s a number of researchers have suggested that loose monetary policy during the first half of the 2000s was a primary cause of the substantial run up in house prices in many countries however using a common statistical approach we find that monetary policy was not the main factor that should not be surprising although low interest rates raise house prices the increase in prices during the mid 2000s was much larger than the historical relationship between the two variables would suggest instead we investigate further the link between the marked loosening in terms and standards for mortgage credit and the most rapid increases in house prices this link provides some evidence for a story where credit provision and the demand for housing fed on each other and helped spur the housing boom our work suggests a greater role for macroprudential regulation rather than monetary policy in managing asset price booms jane dokko brian m doyle michael t kiley jinill kim shane sherlund jae sim and skander van den heuvel

independence of allocative efficiency from distribution in the theory of public goods when is the pareto optimal amount of public goods independent of income distribution subject to some regularity conditions the answer is when preferences of every individual i can be represented by a utility function of the form u x i y a y x i b i y where x i is i s consumption of private goods and y is the amount of public goods

trade costs 1870 2000 what has driven trade booms and trade busts in the past century and a half was it changes in global output or in the costs of international trade to address this question we derive a micro founded measure of aggregate bilateral trade costs based on a standard model of trade in differentiated goods these trade costs gauge the difference between observed bilateral trade and frictionless trade in terms of an implied markup on retail prices of foreign goods thus we are able to estimate the combined magnitude of tariffs transportation costs and all other macroeconomic frictions that impede interna tional trade but that are inherently difficult to observe we use this measure to examine the growth of global trade between 1870 and 1913 its retreat from 1921 to 1939 and its subsequent rise from 1950 to 2000 we find that trade cost declines explain roughly 55 percent of the pre world war i trade boom and 33 percent of the post world war ii trade boom while a precipi tous rise in trade costs explains the entire inter

the nature of oil shocks and the global economy abstract this paper identifies the main driving force behind oil price shocks in 1970 2006 by applying a simple identification strategy of supply driven and demand driven price shocks the identification hypothesis states that supply driven oil price shocks have a negative impact on the macroeconomic activity of countries which are net consumers of oil while demand driven oil price shocks do not have negative effects in order to identify global demand driven shocks a weighted aggregate gdp series of countries which are net consumers of oil is constructed over 1970 2006 the key result is that the main driving force behind oil price shocks has changed from supply driven shocks in 1970 1992 to demand driven shocks in 1992 2006

subsidizing altruism in living organ donation the current supply of deceased donor organs is insucient to meet the growing demand for transplantable organs the median waiting time for a kidney from a deceased donor is over three years consequently candidates for kidney transplantation are strongly encouraged to nd a living donor however many potential donors have low incomes and donation related costs may discourage them from volunteering to be a donor in 2008 the department of health and human services began to reimburse donor s travel related expenses via the national living donor assistance center nldac using within transplant center variation in their applications for donor assistance we use a dierence in dier ence model to estimate the impact of the nldac on the number of living donor kidney transplants we nd that among participating transplant centers the program increased the number of living donor kidney transplants by approximately 14 the nldac program provides an eective subsidy for donor s altruism

searching for joint gains in multi party negotiations abstract we develop a constructive approach to multi party negotiations over continuous issues the method is intended to be used as a mediator s tool for step by step creation of joint gains in order to reach a pareto optimal agreement during the mediation process the parties are only required to answer relatively simple questions concerning their preferences they do not have to reveal their utility functions completely the method generates jointly improving directions to move along and it is a non trivial generalization of the recently proposed two party methods we give a mathematical analysis together with a numerical example but also a practical basis for negotiation support in real world settings

heterogeneous trade costs and wage inequality a model of two globalizations abstract we develop a model for analyzing the distributional effects of two globalizations and their interdependence we distinguish between two trade cost reductions i trade liberalizations in the 1980s which increased trade in low skill intensive goods denoted l globalization and ii reductions in communication costs due to the it revolution which raised trade in middle skill intensive goods during the 1990s denoted c globalization we consider a north south trade economy in which the north is skill abundant a freely traded final good is produced using high skill services and a bundle of inputs inputs differ on the intensity of middle and low skill workers required to be produced and are subject to heterogeneous trade costs in the north we find that wage inequality increases in the l globalization during the c globalization wage polarization emerges the relative wage of high to middle skill workers increases while the relative wage of middle to low skill workers is hump shaped we find a complementarity between the two globalizations wage polarization is delayed by the extent of trade in the l globalization in the south we find that wage inequality increases in both globalizations finally we show how asymmetric participation in the c globalization of two southern countries generates a discontinuous pattern of specialization the southern country participating in the c globalization specializes in the least and most skill intensive traded inputs

reframing the moral limits of markets debate social domains values allocation methods what should and what should not be for sale in a society this is the central question in the moral limits of markets mlm debate which is conducted by a group of business ethicists and liberal egalitarian political theorists these mlm theorists which we will dub market moralists all put forward a specific version of the argument that while the market is well suited to allocate some categories of goods and services it is undesirable for the allocation of other such categories we argue that the current mlm debate is too much framed in terms of a market non market dichotomy moreover authors tend to distinguish insufficiently between values such as freedom equality and efficiency and allocation methods such as the market the queue and rationing we introduce a new conceptual scheme consisting of societal domains values and allocation methods to provide a better structure for this debate the argument is illustrated from the education and healthcare domains

spatial linkages and export processing location in china this paper provides empirical evidence that spatial linkages matter for the localisation of global value chain activities relying on processing trade data for chinese provinces during the period 1997 2008 we investigate whether a chinese province s proximity to international suppliers and international buyers within an industry chain affects its attractiveness as an export processing location we find that the upstream and downstream spatial linkages both have a strong and independent explanatory power we also explore what factors explain the influence of these spatial linkages

the deadweight loss of christmas when economists comment on holiday gift giving it is usually to condone the healthy effect of spending on the macroeconomy however an important feature of gift giving is that consumption choices are made by someone other than the final consumer a potentially important microeconomic aspect of gift giving is that gifts may be mismatched with the recipients preferences in the standard microeconomic framework of consumer choice the best a gift giver can do with say 10 is to duplicate the choice that the recipient would have made while it is possible for a giver to choose a gift which the recipient ultimately values above its price for example if the recipient is not perfectly informed it is more likely that the gift will leave the recipient worse off than if she had made her own consumption choice with an equal amount of cash in short gift giving is a potential source of deadweight loss this paper gives estimates of the deadweight loss of holiday gift giving based on surveys given to yale undergraduates i find that holiday gift giving destroys between 10 percent and a third of the value of gifts while these recipients may be unrepresentative of the u s population their gifts are not necessarily unrepresentative holiday expenditures average 40 billion per year implying that a conservative estimate of the deadweight loss of christmas is a tenth as large as estimates of the deadweight loss of income taxation i also explore how deadweight loss and the tendency to give cash gifts vary with the relationship and age difference between giver and recipient i find that gifts from friends and significant others are most efficient while noncash gifts from members of the extended family are least efficient and destroy a third of their value i develop a simple expected utility model to explain the decision to give cash as opposed to in kind gifts the data are consistent with the model cash gifts are most common from the sorts of givers whose noncash gifts have the lowest expected value to recipients given their cost and high variability in recipient valuation

when are nash equilibria independent of the distribution of agents characteristics author s bergstrom ted varian hal r abstract we present examples of nash equilibria that do not vary with the distribution of a parameter across agents and then offer a general theorem that characterizes this independence

how do the trans pacific economies affect the usa an industrial sector approach this paper studies how the trans pacific region affects the us economy in terms of business cycle transmission we use a large data set consisting of disaggregated sectoral industrial production indexes from selected countries in the region and employ a factor augmented vector autoregression favar approach to analyse the transmission of shocks in different industries we find that a positive output shock in the entire trans pacific region has positive effects on the majority of us manufacturing sectors we also find that sectoral shocks in five sectors of the trans pacific region have a large impact on the overall us economy three of the five sectors displayed strong same sector responses relative to the overall response suggesting that vertical production linkages might play a key role in the transmission of shocks our results highlight the importance of examining industrial sectors in studying the transmission of shocks in the trans pacific region

market and non market mechanisms for the optimal allocation of scarce resources a number of identical objects is allocated to a set of privately informed agents agents have linear utility in money the designer wants to assign objects to agents that possess specific traits but the allocation can only be conditioned on the willingness to pay and on observable characteristics i solve for the optimal mechanism the choice between market or non market mechanisms depends on the statistical linkage between characteristics valued by the designer and willingness to pay

endogenous pricing to market and financing costs abstract this paper explains why relative ppp should hold more tightly in emerging markets and why pricing to market would be observed more frequently in the oecd countries it studies the endogenous determination of pricing to market in a real option model with time dependent transportation costs where the future terms of trade are random allowing time dependent transportation costs adds a dimension of investment to the pre buying of imports implying that financial considerations determine the frequency of pricing to market and the deviations from relative ppp if the expected discounted cost of last minute delivery is higher than pre buying one exercises the option of spot market imports if the realized terms of trade are favorable enough pricing to market is observed in countries characterized by low terms of trade volatility and low financing costs in these circumstances imports are pre bought and the spot market for imports is inactive in countries where the financing costs and the terms of trade volatility are high few imports are pre bought the price of imports is determined by the realized real exchange rate and a version of relative ppp holds with an intermediate level of terms of trade volatility and of financing costs a mixed regime is observed if the realized real exchange rate is weak pricing to market would prevail increasing consumers welfare by shielding them from the adverse purchasing power consequences of weak terms of trade if the realized real exchange rate is favorable enough more imports are purchased in the spot market and the relative ppp would hold higher financing costs increase the cost of pre buying imports reducing thereby the frequency of pricing to market increasing the expected relative price of imports reducing the expected deviations from relative ppp and reducing welfare

optimal production of transplant care services most organ transplants are from dead donors national transplant organizations exhibit considerable differences in terms of their donor population rates spain s organization is by far the most efficient in this respect we argue that much of the productivity advantage of spain s transplant organization proceeds from an efficient organization of the production chain from organ procurement to transplantation transplants from dead donors are analogous to a common resource for the transplant community their circulation through the national transplant organization creates public good externalities between the care units in charge of organ retrieval and those in charge of transplantation a socially efficient production of transplant care services obtains through an optimal control by the national transplant agency of both the circulation and the production of transplants in particular transplant shortage makes the rotten kid theorem fail in this context the analysis also produces a natural measure of public good externalities evaluated from the standpoint of care units

loopholes undermine donation an experiment motivated by an organ donation priority loophole in israel article i nfo giving registered organ donors priority on organ waiting lists as has been implemented in israel and singapore pro vides an incentive for registration and has the potential to increase the pool of deceased donor organs however the implementation of a priority rule might allow for loopholes as is the case in israel in which an individual can reg ister to receive priority but avoid ever being in a position to donate organs we experimentally investigate how such a loophole affects donation and find that the majority of subjects use the loophole when available the existence of a loophole completely eliminates the increase in donation generated by the priority rule when information about loophole use is made public subjects respond to others use of the loophole by withholding donation such that the priority system with a loophole generates fewer do nations than an allocation system without priority 2013 published by elsevier b v

market reasoning as moral reasoning why economists should re engage with political philosophy abstract in my book what money can t buy the moral limits of markets 2012 i try to show that market values and market reasoning increasingly reach into spheres of life previously governed by nonmarket norms i argue that this tendency is troubling putting a price on every human activity erodes certain moral and civic goods worth caring about we therefore need a public debate about where markets serve the public good and where they don t belong in this article i would like to develop a related theme when it comes to deciding whether this or that good should be allocated by the market or by nonmarket principles economics is a poor guide deciding which social practices should be governed by market mechanisms requires a form of economic reasoning that is bound up with moral reasoning but mainstream economic thinking currently asserts its independence from the contested terrain of moral and political philosophy if economics is to help us decide where markets serve the public good and where they do

tough love and intergenerational altruism this chapter develops and studies a tough love model of intergenerational altruism we model tough love by modifying the barro becker standard altruism model in two ways first the child s discount factor is endogenously determined so lower childhood consumption leads to a higher discount factor later in life second the parent evaluates the child s lifetime utility with a constant high discount factor our model predicts that parental transfers will fall when the child s discount factor falls this is in contrast with the standard altruism model which predicts that parental transfers are independent of exogenous changes in the child s discount factor