rafmacalaba/datause-encoder-data huggingface dataset:
**Table 5. De-Trended Flows: Standard Deviations and Correlations**

||**Standard**||**Correlations**||
|---|---|---|---|---|
||**Deviations**|**U/W.A.P.**|**F/E.A.P.**|**G.D.P.**|
|**Shares**|||||
|O.L.F./W.A.P.|1.61|0.55|-0.83|-0.14|
|U/W.A.P.|0.82|1.00|-0.60|-0.49|
|S.E./E.A.P.|2.86|0.48|-0.96|-0.16|
|I/E.A.P.|2.02|0.68|-0.92|-0.05|
|F/E.A.P.|4.60|-0.60|1.00|0.12|
|**De-trended Flows**|||||
|O.L.F. to U|0.70|0.77|-0.26|-0.52|
|O.L.F. to S.E.|0.24|-0.18|0.01|-0.07|
|O.L.F. to I|0.21|-0.35|0.05|0.41|
|O.L.F. to F|0.18|-0.61|0.30|0.44|
|U to O.L.F.|4.38|-0.34|0.00|0.30|
|U to S.E.|1.50|0.03|-0.11|-0.50|
|U to I|2.54|-0.64|0.14|0.58|
|U to F|3.67|-0.64|0.27|0.67|
|S.E. to O.L.F.|0.77|-0.13|0.04|-0.11|
|S.E. to U|0.56|0.75|-0.25|-0.59|
|S.E. to I|0.79|-0.23|0.10|0.12|
|S.E. to F|0.50|-0.56|0.29|0.31|
|I to O.L.F.|1.08|-0.37|0.14|0.09|
|I to U|1.07|0.69|-0.23|-0.68|
|I to S.E.|1.27|-0.34|0.17|-0.08|
|I to F|2.22|-0.68|0.28|0.47|
|F to O.L.F.|0.20|-0.28|0.13|-0.03|
|F to U|0.21|0.10|0.08|-0.19|
|F to S.E.|0.17|-0.56|0.21|0.23|
|F to I|0.37|-0.19|-0.08|0.23|

Note: Transition rates among sectors inferred from the continuous time transition matrix for each period using monthly data from the Monthly Labor Survey (PME) from Jan 1983 to Dec 2002 following the procedure by Geweke et al. (1986) outlined in Annex 1. Computations are based on 10.000 Monte Carlo replications. OLF=Out of the Labor Force, U=Unemployed, I=Informal Salaried, SE=Informal Self-employed, F=Formal Sector AP=Active Population, WAP=Working ages population, EAP=Employed in working ages population. The series have been averaged per quarter and de-trended using a HP filter with smoothing parameter 10<sup>5</sup> 41
3 external and internal borrowing. In parallel, in response to reduced foreign exchpnge earnings and shrinking reserves, ad hoc entrols over imports proi.ferated. These threatened the viability of the domostic productive activity which suffered from a lack of readily available imported inputs. Similarly, to dampen the impact of inflation, domestic price coniro.s became endemic, straining fiurter the fiutioning of domestic productive activities. This scenario lasted until foreign borrowing dried up and thd deficits became unsustainably large. As the ad hoc measures did nothing but aggravate the situation, 4 the economics leaped from one crisis to another in a process of cumulative contraction.

The above picture is a more or les an accurate description of the events in the ten countries examined here. It was essentially in response to the macroeconomi **c** rises and disequilibria that stailization, structural adjustment and trade reform as an integral part of structural adjustment, were first IntrAduced in the countries examined here. Stabilization and reform were a _sine qua non_ condition for gaining access to additional foreign exchange. All ten countries were forced to swallow Bank/Fund conditionalities after they had suffered a series of crises that had left the governments at the brink of 5 bankruptcy.

By the early 1980s, Ghana, Uganda and Zambia were the countries where the process of decline had rewhed catastrophic proportion. In Ghana, from 1970 to 1983, real per capita income had decreased by 30 percent, real export earnings had dropped by 52 percent, and between 1975 and 1983, GDP had fallen by a fifth. During the same period, real wages had fallen by 86 percent, caloric intake had fallen by one third and infant mortality had risen as a result. In 1981, inflation was over 100 percent and foreign debt was 35 percent of GNP.

In Uganda, once among one of the most prosperous African countries, the process of economic decline coincided with the Amin years, which brought economic and political catastrophe to the country. During this period, GDP fell by 25 percent, the standards of health and education declined to abysmal 4 See Bevan et al., op. cit. chap. 3.

STho figures cited in this section are mostly from individual case studies and from Callaghy, op. cit.
as the residual of the industrial value added after accounting for the share of exports and non-tradables) covering about _55%_ of the industrial sector's value added, this implies that over 70% of the import substitutes are still protected by import restrictions'. Second, the average tariff is not an economically meaningful indicator of protection since the lowest rates apply to items not produced in Morocco. Indeed, although the import-weighted average tariff for the first six months of 1989 was 13.5%, with more than half of the imports paying 12.5% or below (Table lb), when weighted by the share in production the average tariff is above 39%. Finally, reference prices also disguise restrictions and lack transparency. They tend to be arbitrary and it Is difficult to determine how restrictive they are in practice.

On the export side, the Temporary Admission scheme (import to re-export) has played an important role in encouraging exports and is, in fact, the fastest growing export category: its imports, which in 1984 amounted to less than 10% of total imports, increased to over 25% by 1988. Nonetheless, the economy's anti-export bias remains. Generous tax exemptions (especially from value-added tax) to such non-tradable sectors as construction, and price controls in other sectors impede the transfer of resources to export and efficient import-substitution sectors. Moreover, every tariff represents protection from an import-substitution activity and a tax on exports. The tariff therefore leads to an anti-export bias. It should be noted that further liberalization took place after 1989 but does not cover the period analyzed in this paper.

# IV. ESTIMATION OF FIRM-LEVEL PRODUCTIVITY

The empirical analysis of the Moroccan industrial performance during the period of trade liberalization is based on firm-level industrial survey data collected by the Moroccan Ministry of Commerce and Industry. The data cover the period 1985 to 1989. The surveys are exhaustive and include all enterprises with 10 or more employees, as well as enterprises with less than 10 employees which 'See World Bank (1990), Morocco: Sustained Investnent and Growth in the Nineties 11
rates end up showing some minor variations over the simulation period (as do other government budget items) but end up very close to their initial levels at the end of the simulation period.

The share of the government in the economy declines marginally along the base from 39.6 of GDP in 2008 to 37.5 percent in 2020. Low growth in non-trade foreign exchange earnings restricts growth for the trade deficit, as a result of which total final demand (absorption) is forced to grow more slowly than GDP (see Table 4 below). In addition, we assume that continued annual GDP growth of 4.3 percent during 2012-2020 requires continued improvements in public infrastructure (including roads and energy transmission), leading to more rapid growth for investment than for consumption.

As for the savings-investment closure, the initial absorption share of 24.4 percent for household savings (the 2008 share) is allowed to adjust in order to clear the savings-investments balance. The savings rate of households hovers around 20.1 percent of total absorption during 2012-2020 in our base run.

In the labor market, real wages continue to increase rather rapidly, as migration and aging leads to a labor force decline at an annual average rate of 1.6 percent, with the largest decline recorded for those with the lowest educational level. However, we assume that an increasing number of those that are currently only part-time employed will find full-time employment, which enables a small but decreasing growth in employment over the simulation period, as the unemployment rate (which is adjusted to account for underemployment) gradually declines from 11.4 percent in 2012 to 7.3 in 2020.

In setting up the demographic variables, we used the UN medium variant projections for total population, population in working age, and migration. The resulting increased scarcity of labor keeps wages increasing at rates that are substantial but still lower than the 7.8 percent of annual growth that, as noted above, was recorded for aggregate labor during the period 2004-2010. Figure 9 shows average wage growth by labor type. We see that wage growth is lower for the most abundant labor type, skilled people (who have secondary level of education), than for the unskilled (with primarily level education, including many of the rural area emigrants).

**Figure 9. Base: Annual wage growth (%)**

18
<u>Table 5: Total Cash Transfers.</u>

||(1)|(2)|(3)|
|---|---|---|---|
||log(Tot Transfers)|log(Pot Transfers)|Tot Payments|
|**_Panel A: Original Households_**||||
|Treatment|0.088**|0.062***|6.60***|
||(0.0358)|(0.0053)|(0.971)|
|Constant|11.17***|11.37***|92.11***|
||(0.0958)|(0.0170)|(2.728)|
|Observations|4,494|4,494|4,494|
|R-squared|0.105|0.794|0.039|
|Mean T 2017|12.29|12.66|106.92|
|Mean C 2017|12.20|12.60|100.59|
|**_Panel B: New Households_**||||
|Treatment|0.091**|0.055***|5.83***|
||(0.0449)|(0.00730)|(1.198)|
|Constant|11.34***|11.42***|100.20***|
||(0.131)|(0.0250)|(3.606)|
|Observations|2,265|2,265|2,265|
|R-squared|0.118|0.807|0.037|
|Mean T 2017|12.36|12.71|107.65|
|Mean C 2017|12.28|12.67|102.03|

This table shows the direct implications of the randomized treatment variable in terms of the cash transfers received at the beginning of the program (1998-99). The outcomes employed are: (i) _Total transfers_ , which correspond to the accumulated amount of transfers received by the households (in real Mexican pesos); (ii) _Potential transfers_ , which refers to the amount of transfers that, given the program rules, a household would accumulate if there is perfect compliance; and (iii) _Total Payments_ , which indicates the total amount of installments that a household received since they were enrolled into the program. This information comes from administrative records from the program. Treatment is a dummy variable that identifies if the observation belongs to one of the 320 original Progresa RCT treatment localities. Controls include (from ENCASEH 1997): HH head age, education, speaking a dialect, HH size, % members under 15, dummies for home, productive land and draft animals ownership, and locality marginalization index. Standard errors clustered at the locality level. Asterisks indicate significance at the ***1%, **5%, and *10% level.

As we use the initial RCT design for the analysis, the estimation of the effects of interest is rather simple and consists of the following specifications: where _Tj_ is a dummy identifying those households living in an early treatment locality _j_ (randomly determined), _Xij_ is a set of controls at the household ( _i_ ) and locality level ( _j_ ).<sup>16</sup> As standard in the literature we presents results on the three specifications above to provide evidence on the robustness of the results. In equation (1) we employ a simple cross-sectional difference approach, where the parameter of interest is _τ_ 1 in particular this approach is useful 16Even though we have a smaller sample than the 506 original localities, as explained in further detail in section IV, we made sure that attrition across localities is not differential by treatment status and redid a balance test using our available sample. _Table 2_ in the appendix shows that treatment and control households are still balanced.

16
_47_ _Table 3.3: Indonesia: Changes in Energy Consumption and Subsidy Effects of Domestic Energy Price Changes (percent)_

||Scenario|A|ScAnar|io<br>B|
|---|---|---|---|---|
|Sector|Chage in enWgy|Subsidy|Change in aey|Subsidy|
|Food processing|-14.04|-24.41|-27.87|-41.69|
|Other food fioducts|-14.40|-26.61|-27.65|-43.68|
|Beverages|-12.28|-28.26|-26.67|-48.23|
|Tobacco|-11.34|-33.69|-25.09|-54.89|
|Spinning and weaving|-8.68|-22.53|-21.76|-43.34|
|Textiles|-9.31|-24.10|-21.90|-44A0|
|Weaing apparel|-5.41|-25.82|-14.96|-50.46|
|Leather and leather substitutes|-10.24|-26.18|-23.01|-46.16|
|Leaffier footwear|-7.76|-28.46|-17.74|-49.74|
|Wood and wood pnducts|-10.19|-31.52|-19.19|-48.93|
|Woodfiwniure|-2.67|-31.10|-2.63|-51.09|
|Paper and paper products|-10.54|-25.80|-20.84|-43.09|
|Priting and publishing|-5.38|-27.04|-12.89|-49.35|
|Basic chemicals|-12.54|-25.77|-24.18|-42.56|
|Other chemical products|-9.44|-29.39|-19.66|-48.71|
|Rubber|-11.35|-25.29|-23.02|42.86|
|Plastic wares|-11.56|-25.84|-23.32|-43.53|
|Ceramic and porcelain|-11.03|-21.73|-21.92|-37.90|
|Glass and glass products|-13.18|-21.07|-25.95|-37.12|
|Cement and cement prducts|-14.89|-28.06|-30.75|-47.22|
|Structural clay products|-17.59|-24.16|-32.20|-40.10|
|Othernon-metallic<br>metal products|-17.40|-27.38|-31.A9|43.67|
|Fabricated Metal Products|-11.06|-26.90|-22.99|45.52|
|Machinery|-8.22|-25.97|-19.12|-46.72|
|Electrical mahiney|-10.67|-27.83|-22.21|-46.71|
|Transport equipment|-9.62|-29.44|-20.21|-48.96|
|Measming and optical equipmcnt|-6.35|-22.59|-14.97|-43.00|
26 clean fuel vehicles. The Malaysian government provides public service vehicles in urban areas using natural gas to ease the strain of road taxes: monogas vehicles receive a 50% discount and bi-fuel or dual fuel vehicles receive a 25% discount (Hirota et. al., 2003). In Finland, sales tax is lower for low-emission vehicles. In the Netherlands, although the car purchase tax is 45.2%, there are fixed allowances of 1,540 euros for LPG cars (Potter and Parkhurst, 2005).

There exists a consensus among existing studies that subsidies are necessary to promote clean vehicles. Rubin and Leiby (2002) argue that, without subsidies, no substantial hybrid penetration is possible; they estimate that a permanent subsidy of $1600 per vehicle would ensure a market share of hybrid vehicles at about 45%, while a $4000 subsidy could increase the share to 90% in the United States. Using the MARKAL model, Ichinohe and Endo (2006) show that the share of hybrid passenger cars in 2030 could be 62% and the peak total subsidy required to achieve that share would be $1.23 billion per year in 2020 to reduce energy related annual CO2 emissions 8% below the 1990 level through 2030 in Japan. Based on a survey conducted to study the rebound and other possible affects of tax rebates among 367 buyers of the hybrid second-generation Toyota Prius car in Switzerland in the first 9 months after the market entry, Haan et. al. (2007) finds that the tax rebates incentives could lead to significant increases in sales in Swiss cantons having tax rebates. Similarly, Potoglou and Kanaroglou (2007), using the Nested Logit (NMNL) model, find that the reduced monetary costs, purchase tax reliefs and low emission rates are the factors that would encourage households to buy cleaner vehicles within the metropolitan area of Hamilton, Canada. Carlsson and JohanssonStenman (2002) show that battery-powered cars cannot compete with conventional gasoline powered cars in the Swedish transport sector unless an unanticipated major breakthrough in battery technology occurs, thereby implying for a subsidy for electric vehicles. According to Funk and Rabl (1999), as the social cost of the Electric Vehicle (EV) is at least 50% more than that of gasoline-powered cars, the cost of air pollution associated with cars using gasoline alone is not enough to give the EV a clear advantage against all conventional cars.
**Policy Research Working Paper Series**

|**Title**<br>|**Author**|**Date**|**Contact**<br>**for paper**|
|---|---|---|---|
|WPS2328 Social Transfers and Social<br>Assistance: An Empirical Analysis<br>Using Latvian Household Survey Data|Branko Milanovic|April 2000|P. Sader<br>33902|
|WPS2329 Improving Russia's Policy on Foreign<br>Direct Investment|Joel Bergsman<br>Harry G. Broadman<br>Vladimir Drebentsov|May 2000|S. Craig<br>33160|
|WPS2330 Reducing Structural Dominance<br>and Entry Barriers in Russian<br>Industry|Harry G. Broadman|May 2000|S. Craig<br>33160|
|WPS2331 Competition, Corporate Governance,<br>and Regulation in Central Asia:<br>Uzbekistan's Structural Reform<br>Challenges|Harry<sup>G. Broadman</sup>|May 2000|S. Craig<br>33160|
|WPS2332 Financial Intermediary Distress in<br>the Republic of Korea: Small Is<br>Beautiful?|Paola Bongini<br>Giovanni Ferri<br>Tae Soo Kang|May 2000|K. Labrie<br>31001|
|WPS2333 Output Fluctuations in Latin America:<br>What Explains the Recent Slowdown?|Santiago<sup>Herrera</sup><br>Guillermo Perry<br>Neile Quintero|May 2000|C. Palarca<br>35328|
|WPS2334 Sex Workers and the Cost of Safe<br>Sex: The Compensating Differential<br>for Condom Use in Calcutta|Vijayendra Rao<br>Indrani Gupta<br>Smarajit Jana|May 2000|P. Sader<br>33902|
|WPS2335 Inflation and the Poor|William Easterly<br>Stanley Fischer|May 2000|K. Labrie<br>31001|
|WPS2336 Endogenous Enforcement and<br>Effectiveness of China's Pollution<br>Levy System|Hua Wang<br>David Wheeler|May 2000|Y. D'Souza<br>31449|
|WPS2337 Pollution Charges, Community<br>Pressure, and Abatement Cost of<br>Industrial Pollution in China|Hua Wang|May 2000|Y. D'Souza<br>31449|
|WPS2338 The Geography of International<br>Investment|Howard J. Shatz<br>Anthony J. Venables|May 2000|L. Tabada<br>36896|
|WPS2339 Building Subnational Debt Markets<br>in Developing and Transition Econom<br>A Framework for Analysis, Policy<br>Reform, and Assistance Strategy|Michel Noel<br>ies:|May 2000|M. Noel<br>32581|
recipient country's choice of the tax rate τ , if we account for ex-post relief in case of a disaster. That is, due to foreign aid experiences in the past, the government of the recipient country might anticipate the possibility of ex-post disaster relief ω and interpret foreign aid experiences of the past as implicit insurance for the future. Hence, past foreign aid experiences do not only have a positive preventive and a negative fungibility effect on the survival probability, but also an adverse crowding-out effect. In the following, we will first derive the crowding-out of the tax rate τ and second determine the net effect on survival probability _q_ .

Our model is mainly based on Coate (1995). However, there are two fundamental differences. First, while the analysis of Coate (1995) mainly focuses on a Samaritan's Dilemma problem between individuals on a national level, the aim of this work is to investigate the existence of the Samaritan's Dilemma on an international level, where the aid-receiving government shirks responsibilities. Second, Coate (1995) uses three groups of actors, namely two rich individuals, a poor individual and the government, with the latter trying to maximize the welfare of the rich by providing an ex-ante payment to the poor person. Hence, he assumes an ex-ante payment which is primary of strategic nature and aims to reduce the ex-post payment, which is the Samaritan's Dilemma problem of the rich. However, we assume that the ex-ante payment does not have any influence on the ex-post decision, because our focus is not to analyze how the ex-ante payment affects ex-post relief, but rather how it affects the level of protection chosen by the recipient country's government through the preventive as well as the two negative effects.

The intuitive explanations illustrate that both the donor and the recipient country's behavior are relevant to derive the forces which impact the value of the tax rate τ necessary for the implementation of protection measures. Using backward induction, we first focus on the behavior of the donor country. Once, the bad state for the recipient country arises and given the level of the tax rate τ , the reaction function of the rich country is

> with _q_ = _YR_ + α _T_ . The optimal ex-post emergency aid is implicitly defined by the following first-order-condition, which states that the marginal benefit of the donor country, which results from the higher utility of the recipient country, must equal the marginal costs of the donor country due to a lower level of consumption.

In order to derive how the donating country's choice of ex-post aid adjusts to changes of the poor country, we have to discuss the following expression: The denominator of the expression is negative if we assume that the impact of the ex-post transfer on the utility is comparable to the impact of income. A given level of transfer induces increases in the utility level, but the effect is smaller for higher levels of initial utility.

7
Moreover, the same way that GVCs generate spillover effects and amplify those effects, global inflation synchronization might require more coordinated international policies (IMF, 2018).

Finally, beyond inflation synchronization, GVCs also create strong interdependence of GDP fluctuation at business cycle frequency (de Soyres and Gaillard (2019), Gunnella et al. (2019)). Moreover, the segmentation of production across countries has a significant impact on trade elasticities (Amiti et al. (2014), de Soyres et al. (2018)). GVCs also impact the extent to which regional trade agreement divert trade flows with the rest of the world (de Soyres et al. (2019)).

# **3 Data Sources**

The analysis is based on annual inflation data for more than 126 countries depending on the specifications, for the period 1970-2017.

## **3.1**

Inflation is measured at the annual frequency and the analysis are performed using two different measures: Consumer Price Index (CPI) and Gross Domestic Product Deflator (GDPD). There are key differences between those two indices. On the one hand, CPI includes all goods bought by consumers including foreign goods if the country imports final goods. As such, it is an interesting measure of price changes when one wants to focus the analysis on consumers only. On the other hand, GDP deflator measures price changes in goods and services produced in an economy, but not those imported. Moreover, the two measures have different shares of tradable goods, being higher for the CPI. Importantly, since there are production linkages between importers and non importers within each country, GDP deflator has an _indirect_ exposure to imported inputs. However, GDP deflator has no exposure to imported final goods that are simply consumed by households.

When building the data set on which we perform our analysis, we are particularly interested in covering as many countries and as many low income countries as possible. The use of CPI and GDPD allows to have two ( _very_ ) different measures, and guarantees 7