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Full-Text Articles in International Economics

Why Are Nontraded Goods Cheaper In Poor Countries?, Yoonho Choi, Hailong Jin, E. Kwan Choi Mar 2018

Why Are Nontraded Goods Cheaper In Poor Countries?, Yoonho Choi, Hailong Jin, E. Kwan Choi

Economics Publications

Balassa and Samuelson argued that production technologies differ among countries, and the price of the nontraded good is higher in countries with higher labor productivity. This paper shows that the Balassa-Samuelson effect exists even when countries share identical production technologies. In the celebrated Heckscher-Ohlin model, changes in factor endowments do not affect the equalized factor prices. This paper considers a three-factor, three-industry model, and demonstrates that endowment differences between countries can cause disparities in their wage rates and the prices of the nontraded good. A dynamic panel data analysis shows that a 10% increase in per capita real GDP results ...


Duality Theory In Empirical Work, Revisited, Francisco Rosas, Sergio H. Lence Aug 2017

Duality Theory In Empirical Work, Revisited, Francisco Rosas, Sergio H. Lence

Economics Publications

We compute a pseudo-dataset by Monte Carlo simulations featuring important characteristics of US agriculture, such that the initial technology parameters are known, and employing widely used datasets for calibration. Then, we show the usefulness of this calibration by applying the duality theory approach to datasets bearing as sources of noise only the aggregation of technologically heterogeneous firms. Estimation recovers initial parameters with reasonable accuracy. These conclusions are expected, but the proposed calibration sets the basis for analysing the performance of duality theory in empirical work when datasets have more observed and unobserved sources of noise, as those faced by practitioners.


Exports Boost Livestock Prices, Lee L. Schulz Oct 2015

Exports Boost Livestock Prices, Lee L. Schulz

Economics Publications

Strong domestic meat and poultry demand plus husky exports have bolstered livestock prices over recent years. Exports, on a value basis, set a record high in 2014.


Modeling The Market And Welfare Effects Of Mexico's “Agriculture By Contract” Program, Sergio H. Lence Jan 2015

Modeling The Market And Welfare Effects Of Mexico's “Agriculture By Contract” Program, Sergio H. Lence

Economics Publications

“Agriculture by contract” () is the main Mexican government program aimed at mitigating price risks for agricultural producers in Mexico. [Math Processing Error] has unique features involving forward contracts and the provision of basis subsidies and subsidized exchange-traded futures options for both producers and intermediaries. A simulation model is developed to analyze the market and welfare effects of [Math Processing Error]. When applied to corn, results show that [Math Processing Error] exerts substantial impacts and causes large transfers across sectors. Even if [Math Processing Error] reduced intermediaries' market power to the largest extent feasible, results indicate that it would still cause ...


Investors’ Reaction To Environmental Performance: A Global Perspective Of The Newsweek ’S “Green Rankings”, Juan M. Murguia, Sergio H. Lence Jan 2015

Investors’ Reaction To Environmental Performance: A Global Perspective Of The Newsweek ’S “Green Rankings”, Juan M. Murguia, Sergio H. Lence

Economics Publications

We use event study analysis to determine whether the release of Newsweek’s “Global 100 Ranking” is relevant for the market. We look at one- and two-day event windows to check two possible reactions of the market: changes in the value of an equal-weight portfolio, and changes in the relative price of the stocks. The results show that the market reacted to the “Global 100 Ranking” by changing the relative price of the stocks, but not the value of the portfolio. Specifically, getting one position closer to the top of Newsweek’s “Global 100 Green Rankings” increases the value of ...


China’S Profits And Losses From Currency Intervention, 1994-2011, Hailong Jin, E. Kwan Choi Jan 2014

China’S Profits And Losses From Currency Intervention, 1994-2011, Hailong Jin, E. Kwan Choi

Economics Publications

China's currency policy has been criticized for its apparent pursuit of mercantile advantage by artificially stimulating exports, with potential adverse effects on other economies. While China's currency policy may have positive output effects, there may be additional profits or losses. This paper computes the annual and cumulative accounting profits from currency intervention since 1994 when China began its currency intervention. It is shown that profits initially were positive but since 2007 China has lost a massive amount from the currency market.


Us And German Consumer Preferences For Ground Beef Packaged Under A Modified Atmosphere – Different Regulations, Different Behaviour?, Carola Grebitus, Helen H. Jensen, Jutta Roosen Jun 2013

Us And German Consumer Preferences For Ground Beef Packaged Under A Modified Atmosphere – Different Regulations, Different Behaviour?, Carola Grebitus, Helen H. Jensen, Jutta Roosen

Economics Publications

New technologies in food processing can provide advantages to consumers and producers but often the technologies are applied in different, country-specific regulatory climates. Modified atmosphere packaging extends the shelf life of fresh meat and, with the inclusion of carbon monoxide, stabilizes colour. These packaging technologies can be used in the US and Europe, although a modified atmosphere package that includes carbon monoxide is allowed only in the US. This study applies choice experiments to analyse preferences of US and German consumers towards the meat attributes enhanced by the packaging. Results show that longer shelf life is preferred in the US ...


Long-Term Futures Curves And Seasonal Structures Of Wheat In The European Union And The United States, Sergio H. Lence, Herve G. Ott, Chad Hart Jan 2013

Long-Term Futures Curves And Seasonal Structures Of Wheat In The European Union And The United States, Sergio H. Lence, Herve G. Ott, Chad Hart

Economics Publications

A two-factor affine theoretical model is used to estimate the long-term futures curves for wheat in the European Union and the United States, as represented by the Euronext and CME markets, respectively. The CME futures curve exhibits a long-term equilibrium; in contrast, the Euronext futures curve does not show a tendency for futures to revert to a long-term equilibrium value. The estimated seasonality is relatively similar for both markets. However, the seasonal minimum and maximum points in the futures curve occur one to two months later for Euronext compared to the CME. More importantly, the futures curve for Euronext has ...


Biofuel Expansion, Fertilizer Use, And Ghg Emissions: Unintended Consequences Of Mitigation Policies, Amani E. Elobeid, Miguel Carriquiry, Jerome Dumortier, Francisco Rosas, Kranti Mulik, Jacinto F. Fabiosa, Dermot J. Hayes, Bruce A. Babcock Jan 2013

Biofuel Expansion, Fertilizer Use, And Ghg Emissions: Unintended Consequences Of Mitigation Policies, Amani E. Elobeid, Miguel Carriquiry, Jerome Dumortier, Francisco Rosas, Kranti Mulik, Jacinto F. Fabiosa, Dermot J. Hayes, Bruce A. Babcock

Economics Publications

Increased biofuel production has been associated with direct and indirect land-use change, changes in land management practices, and increased application of fertilizers and pesticides. This has resulted in negative environmental consequences in terms of increased carbon emissions, water quality, pollution, and sediment loads, which may offset the pursued environmental benefits of biofuels. This study analyzes two distinct policies aimed at mitigating the negative environmental impacts of increased agricultural production due to biofuel expansion. The first scenario is a fertilizer tax, which results in an increase in the US nitrogen fertilizer price, and the second is a policy-driven reversion of US ...


Education, Peter F. Orazem Jan 2013

Education, Peter F. Orazem

Economics Publications

The World Bank's first effort to spur educational investments in children was in Tunisia in 1962. At that time, 41 percent of the world's children aged 6-11 were not in school. 1 In SSA, only 25 percent of primary-aged children were in school, while enrollment rates in the Arab States (39 percent) and South Asia (44 percent) were only modestly better. Their parents were not in a position to produce the education in the home - only one-third of the adult population in low-income countries were literate and the average adult education level was 1.6 years. Even in ...


Economic Freedom, Human Rights, And The Returns To Human Capital: An Evaluation Of The Schultz Hypothesis, Elizabeth M. King, Claudio E. Montenegro, Peter F. Orazem Oct 2012

Economic Freedom, Human Rights, And The Returns To Human Capital: An Evaluation Of The Schultz Hypothesis, Elizabeth M. King, Claudio E. Montenegro, Peter F. Orazem

Economics Publications

Hundreds of studies measure the private returns to schooling, most focusing on a single country or a subset of countries. Following Mincer (1974), inference on returns to schooling and work experience are derived from the regression coefficients of log earnings on years of schooling and quadratic terms in age. Due mainly to George Psacharopolous and his colleagues (Psacharopoulos 1973, 1994; Psacharopoulos and Patrinos 2004), we have compilations of estimated returns to schooling across many countries. These estimates show remarkable consistencies. Despite differences in estimation methods, specifications, and level of economic development, virtually all studies show that earnings rise with years ...


Welfare Costs And Benefits Of Non-Tariff Measures In Trade: A Conceptual Framework And Application, John Beghin, Anne-Celia Disdier, Stephan Marette, Frank Van Tongeren Jan 2012

Welfare Costs And Benefits Of Non-Tariff Measures In Trade: A Conceptual Framework And Application, John Beghin, Anne-Celia Disdier, Stephan Marette, Frank Van Tongeren

Economics Publications

This paper provides a systematic welfare-based approach to analyze the impact of non-tariff measures (NTMs) on trade and welfare in presence of market imperfections. We focus on standard-like measures such as technical barriers and sanitary and phytosanitary regulations. The approach overcomes the shortcomings of the mainstream approach based on the analysis of forgone trade caused by trade costs. The latter ignores market imperfections: welfare increases when NTMs are removed and trade expands. We explain how to account for external effects and market failures in trade-focused welfare analysis, leading to a more balanced overall assessment of measures despite a potential reduction ...


Economics Of Biofuels: An Overview Of Policies, Impacts And Prospects, Giancarlo Moschini, Jingbo Cui, Harvey Lapan Jan 2012

Economics Of Biofuels: An Overview Of Policies, Impacts And Prospects, Giancarlo Moschini, Jingbo Cui, Harvey Lapan

Economics Publications

This paper provides an overview of the economics of biofuels. It starts by describing the remarkable growth of the biofuel industry over the last decade, with emphasis on developments in the United States, Brazil and the European Union, and it identifies the driving role played by some critical policies. After a brief discussion of the motivations that are commonly argued in favor of biofuels and biofuel policies, the paper presents an assessment of the impacts of biofuels from the economics perspective. In particular, the paper explains the basic analytics of biofuel mandates, reviews several existing studies that have estimated the ...


The Impacts Of Biofuels Targets On Land-Use Change And Food Supply: A Global Cge Assessment, Govinda R. Timilsina, John Beghin, Dominique Van Der Mensbrugghe, Simon Mevel Jan 2012

The Impacts Of Biofuels Targets On Land-Use Change And Food Supply: A Global Cge Assessment, Govinda R. Timilsina, John Beghin, Dominique Van Der Mensbrugghe, Simon Mevel

Economics Publications

We analyze the long-term impacts of large-scale expansion of biofuels on land-use change, food supply and prices, and the overall economy in various countries or regions using a multi-country, multi-sector global computable general equilibrium model augmented with an explicit land-use module and detailed biofuel sectors. We find that an expansion of biofuel production to meet the existing or even higher targets in various countries would slightly reduce GDP at the global level but with mixed effects across countries or regions. Significant land re-allocation would take place with notable decreases in forest and pasture lands in a few countries. The expansion ...


Investing In A Better Future Through Public Agricultural Research, Wallace E. Huffman, George Norton, Luther G. Tweeten Mar 2011

Investing In A Better Future Through Public Agricultural Research, Wallace E. Huffman, George Norton, Luther G. Tweeten

Economics Publications

Everyone is concerned with return on investment, and agricultural research continues to be an example of the positive impact well-placed funding can have. Agriculture is a key to the nation's economy, and research not only boosts that industry, it also promotes solutions for many of the country's pressing problems in the areas of health, energy, environment, rural development, trade, and food safety. This Commentary is directed to the Congress (for funding), the Administration (for initiatives), and the public (for insight). Recognized scholars provide an assessment of the high "rate of return" agricultural research has delivered to the American ...


Geographical Indications And The Trade Related Intellectual Property Rights Agreement (Trips): A Case Study Of Basmati Rice Exports, Kranti Mulik, John M. Crespi Jan 2011

Geographical Indications And The Trade Related Intellectual Property Rights Agreement (Trips): A Case Study Of Basmati Rice Exports, Kranti Mulik, John M. Crespi

Economics Publications

The controversy over the granting of patenting rights to three new strains of Basmati rice by the U.S. Patent and Trademark Office is used as a case study to analyze the impact of incomplete protection of intellectual property. Results suggest that the introduction of a competing product that may infringe on India’s geographical indicator has lowered the product differentiation of Indian Basmati rice in key export markets.


To Integrate With A High- Or Low-Wage Country: That Is The Question, E. Kwan Choi Jan 2011

To Integrate With A High- Or Low-Wage Country: That Is The Question, E. Kwan Choi

Economics Publications

This paper considers the question of whether a country with the intermediate capital–labor ratio is better off forming a free trade area with the higher or lower wage country. Typical analyses of gains from trade ignore the effects of free trade on factor prices. When Europe forms a free trade area with a high-wage economy, the equalized wage rises and rent declines, while the price of the importable declines. Workers unambiguously benefit, but integration has an ambiguous effect on capitalists. However, consumers as a whole benefit from the integration and workers can more than offset the losses of the ...


Over-Nutrition And Changing Health Status In High Income Countries, Wallace E. Huffman, Sonya K. Huffman, Kyrre Rickertsen, Abebayehu Tegene Jan 2010

Over-Nutrition And Changing Health Status In High Income Countries, Wallace E. Huffman, Sonya K. Huffman, Kyrre Rickertsen, Abebayehu Tegene

Economics Publications

As per capita incomes in developed countries have grown over the past three decades, overnutrition leading to obesity and elevated health risks for cardiovascular disease, diabetes and some forms of cancer has occurred. We use economic and econometric models to identify the impact of food prices on the aggregate demand for calories and the supply of health, as reflected in mortality rates. Our models are fitted to unique panel data for 18 developed countries over 1971-2001, a period when the relative price of food first rose and then declined steadily. Some findings, using de-trended data, are that a lower real ...


Tariff-Rate Quotas, Rent-Shifting And The Selling Of Domestic Access, Bruno Larue, Harvey E. Lapan, Jean-Philippe Gervais Jan 2010

Tariff-Rate Quotas, Rent-Shifting And The Selling Of Domestic Access, Bruno Larue, Harvey E. Lapan, Jean-Philippe Gervais

Economics Publications

Tariff-rate quotas (TRQs) have replaced quotas at the end of the Uruguay Round. We analyze TRQs when a foreign firm competes against a domestic firm in the latter's market. Our benchmark is the strategic rent-shifting tariff. We show that the domestic price-equivalent TRQ is a better instrument welfare-wise, as it can extract all of the rents from the foreign firm. We show that different pairs of within-quota tariff and quota can support full rent extraction. The implication is that reduction of the former and enlargement of the latter, holding the above-quota tariff constant, may have no liberalizing effects. The ...


Assessing The Welfare Effects Of Us Biofuel Policies, Giancarlo Moschini, Harvey Lapan, Jingbo Cui, Joseph Cooper Jan 2010

Assessing The Welfare Effects Of Us Biofuel Policies, Giancarlo Moschini, Harvey Lapan, Jingbo Cui, Joseph Cooper

Economics Publications

This article assesses the main welfare implications of US policies to support biofuels, with an emphasis on corn-based ethanol. The analysis relies on an open economy, multimarket equilibrium model that links world and domestic energy and agricultural markets and explicitly accounts for the externalities of carbon emissions. The first-best policy in our context entails a carbon tax (implemented with a tax on fuel and a subsidy for ethanol), an import tariff on oil, and an export tax on corn. Although this policy is likely not feasible, we show that a second- best policy with an optimally chosen fuel tax and ...


International Trade In Genetically Modified Products, E. Kwan Choi Jan 2010

International Trade In Genetically Modified Products, E. Kwan Choi

Economics Publications

This paper investigates competition between two markets that sell close substitutes: a traditional product and a genetically modified (GM) product. Tightening an import quota on the GM product raises the prices of both goods and hurts consumers. Two scenarios are considered under free trade: Cournot–Nash equilibrium and Stackelberg equilibrium. A Stackelberg type monopolist produces more, and the competitive traditional firms produce less, than in Cournot–Nash equilibrium. In the long run, an import ban on the GM product does not help competitive producers of the genetically modified organism (GMO)-free products but benefits only the landowners in Europe.


Agricultural Trade Liberalization And Downstream Market Power: The Ad Valorem Case, Mohammad Mainul Hoque, John R. Schroeter Jan 2010

Agricultural Trade Liberalization And Downstream Market Power: The Ad Valorem Case, Mohammad Mainul Hoque, John R. Schroeter

Economics Publications

Exports of agricultural commodities to developed countries play a significant role in the economies of many developing countries. The elimination of import tariffs has the potential to benefit producers in the developing countries, but estimates of the extent of the gains from trade liberalization typically assume perfect competition. Significant concentration in the food processing and retailing sectors of the U.S. and the EU undermine the plausibility of this assumption in the case of agricultural trade, however. Sexton, Sheldon, McCorriston, and Wang (2007) develop a model of the effects of trade liberalization that accounts for the vertically-linked and concentrated characteristics ...


Does Local School Control Raise Student Outcomes? Evidence On The Roles Of School Autonomy And Parental Participation, Victoria Gunnarsson, Peter F. Orazem, Mario A. Sanchez, Aimee Verdisco Oct 2009

Does Local School Control Raise Student Outcomes? Evidence On The Roles Of School Autonomy And Parental Participation, Victoria Gunnarsson, Peter F. Orazem, Mario A. Sanchez, Aimee Verdisco

Economics Publications

As early as 1962, international agencies such as the United Nations and the World Bank were advising that the decentralization of public service delivery could serve as a development strategy. The strategy has become even more prominent over the past 15 years, particularly in education.1 Decentralization efforts in developed countries include various programs in Australia, Canada, New Zealand, Spain, the United Kingdom, and in at least 44 states in the United States. Among the developing countries, Burkina Faso, Brazil, Chile, Colombia, El Salvador, Honduras, India, and Nicaragua have introduced new programs aimed at devolving power to the local schools ...


Sanitation And Hygiene Deficiencies As Contributing Factors In Contamination Of Imported Foods, Fengxia Dong, Helen H. Jensen Jan 2008

Sanitation And Hygiene Deficiencies As Contributing Factors In Contamination Of Imported Foods, Fengxia Dong, Helen H. Jensen

Economics Publications

Imports of agricultural products into the United States represent a significant share of many foods consumed in the United States today. Increased income, better transportation, and global food supply chains support vast trade in agricultural products. In 2006, the United States imported more than $64 billion worth of agricultural products. Beverages, tropical products, fruits, and vegetables led the import value (Dohlman and Gehlhar, 2007).


The Effects Of Prior Beliefs And Learning On Consumers’ Acceptance Of Genetically Modified Foods, Wallace E. Huffman, Matthew Rousu, Jason F. Shogren, Abebayehu Tegene May 2007

The Effects Of Prior Beliefs And Learning On Consumers’ Acceptance Of Genetically Modified Foods, Wallace E. Huffman, Matthew Rousu, Jason F. Shogren, Abebayehu Tegene

Economics Publications

New food products using genetically modified crops appeared in U.S. supermarkets starting in 1996, and consumers’ perceived some risks. This paper examines the role of consumers prior beliefs about genetic modification and of diverse, new information on their willingness to pay for foods that might be genetically modified. We use data from economics experiments and show that participants who had informed prior beliefs discounted GM-labeled food products more highly than those who had uninformed prior beliefs. Uninformed participants were especially susceptible to information from interested and third parties. In contrast, informed participants were generally not affected significantly by new ...


The Transformation Of Spain’S Pork Sector: Can It Continue?, Sergio H. Lence Jan 2007

The Transformation Of Spain’S Pork Sector: Can It Continue?, Sergio H. Lence

Economics Publications

Compared with the other major players in the world pork market, Spain has experienced profound growth and transformation within its pork sector over the past 20 years. Between 1985 and 2003, pork production in Spain increased by 139%, reaching 3.3 million metric tons per year, and Spain became the second-largest pork producer in the European Union


Ethanol Expansion In The Food Versus Fuel Debate: How Will Developing Countries Fare?, Amani Elobeid, Chad Hart Jan 2007

Ethanol Expansion In The Food Versus Fuel Debate: How Will Developing Countries Fare?, Amani Elobeid, Chad Hart

Economics Publications

his paper examines the impact of ethanol expansion in the United States, brought about by higher crude oil prices, on agricultural commodity prices. Given the United States's stature as a major producer and exporter of many agricultural commodities, the resulting increase in commodity prices has spillover effects into the global market. Using the price changes estimated within a multi-commodity, multi-country agricultural modeling system, this paper attempts to show how an increase in world commodity prices would affect the costs of food baskets around the world and how higher food costs will impact food security, particularly in developing countries. In ...


To Outsource Or Not To Outsource In An Integrated World, E. Kwan Choi Jan 2007

To Outsource Or Not To Outsource In An Integrated World, E. Kwan Choi

Economics Publications

This paper investigates outsourcing decision under certainty and uncertainty. When the production activity can be fragmented into two or more processes, an integrated firm must be competitive in each of the fragmented processes. There are gains from outsourcing when factor prices differ between countries. When factor prices are not equalized internationally, a firm may outsource the process which uses its scarce source intensively. If the cost of outsourcing is lower in the foreign country, full outsourcing occurs under certainty. However, even if the outside supplier has a cost advantage, uncertainty in outsourcing cost ensures that partial outsourcing is optimal for ...


Challenges For China’S Agricultural Exports: Compliance With Sanitary And Phytosanitary Measures, Fengxia Dong, Helen H. Jensen Jan 2007

Challenges For China’S Agricultural Exports: Compliance With Sanitary And Phytosanitary Measures, Fengxia Dong, Helen H. Jensen

Economics Publications

In the food safety arena, a clear role for government is to adopt sanitary and phytosanitary (SPS) measures to protect human, animal, and plant life or health. Relative to developing countries, developed countries tend to adopt more stringent food safety standards and regulations with a broader scope and to rely increasingly on certification and traceability. The additional costs of compliance for meeting international SPS requirements are higher for firms operating in developing countries because they must take additional steps to meet international food safety regulations and standards. Therefore, their comparative advantage, achieved through lower production costs, will tend to be ...


Mexico's Changing Pork Industry: The Forces Of Domestic And International Market Demand, S. Patricia Batres-Marquez, Roxanne L. Clemens, Helen H. Jensen Jan 2007

Mexico's Changing Pork Industry: The Forces Of Domestic And International Market Demand, S. Patricia Batres-Marquez, Roxanne L. Clemens, Helen H. Jensen

Economics Publications

Once dominated by traditional and small-scale production systems with little regulation, Mexico's pork industry now includes modern, vertically integrated production systems and federal inspection of packing and processing plants. Recent structural changes have resulted in three distinct segments within the production and processing sectors as the industry works to adjust to international and domestic demand for better product quality, stricter sanitary practices, and increased supplies yet continue to meet the needs of low-income consumers. As the structural changes continue, the industry faces several challenges that will affect its ability to become both internationally and domestically competitive. To meet these ...