The World is Not Enough
Metal spectra as indicators of development
T.E. Graedel & J. Cao
Proceedings of the National Academy of Sciences, 7 December 2010, Pages 20905-20910
Abstract:
We have assembled extensive information on the cycles of seven industrial metals in 49 countries, territories, or groups of countries, drawn from a database of some 200,000 material flows, and have devised analytical approaches to treat the suite of metals as composing an approach to a national "materials metabolism." We demonstrate that in some of the more developed countries, per capita metal use is more than 10 times the global average. Additionally, countries that use more than the per capita world average of any metal do so for all metals, and vice versa, and countries that are above global average rates of use are very likely to be above global average rates at all stages of metal life cycles from fabrication onward. We show that all countries are strongly dependent on international trade to supply the spectrum of nonrenewable resources that modern technology requires, regardless of their level of development. We also find that the rate of use of the spectrum of metals stock is highly correlated to per capita gross domestic product, as well as to the Human Development Index and the Global Competitiveness Innovation Index. The implication is that as wealth and technology increase in developing countries, strong demand will be created not for a few key resources, but across the entire spectrum of the industrial metals. Long-term metal demand can be estimated given gross domestic product projections; the results suggest overall metal flow into use in 2050 of 5-10 times today's level should supplies permit.
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David Levine
NBER Working Paper, December 2010
Abstract:
More advanced technologies demand higher degrees of specialization - and longer chains of production connecting raw inputs to final outputs. Longer production chains are subject to a "weakest link" effect: they are more fragile and more prone to failure. Optimal chain length is determined by the trade-off between the gains to specialization and the higher failure rate associated with longer chain length. There is a kind of reverse "Keynesian multiplier" that magnifies the effect of real shocks. Consequently, more advanced economies should have higher unemployment rates and be more prone to crisis. The implications of the theory both for measurement and government policy are examined.
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Are international technology gaps growing or shrinking in the age of globalization?
Thomas Kemeny
Journal of Economic Geography, January 2011, Pages 1-35
Abstract:
This article examines changing international technology gaps over the recent period of globalization, 1972-2001, using a novel measure of technology. It evaluates each economy's technology level based on the goods it exports, considering each product's average productivity and relative quality level. The analysis reveals a growing disparity between the most- and least-sophisticated economies and a lack of intradistributional mobility. Results are consistent with a view of globalization in which emergent specialization patterns in advanced economies allow them to maintain and even extend their lead over technological latecomers, even as some developing economies are climbing up the ladder.
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Impact of importing foreign talent on performance levels of local co-workers
J. Alvarez, D. Forrest, I. Sanz & J.D. Tena
Labour Economics, forthcoming
Abstract:
When skilled labour is imported to work in a creative industry, local workers may benefit, in terms of their own level of skill, through contact with new techniques and practices. European basketball offers an opportunity to investigate the reality of this general claim. For a panel of 47 European countries observed over more than twenty years, we model probability of qualification for, and subsequent performance in, Olympic Tournaments and World and European Championships. We demonstrate that, consistent with the spillover hypothesis, an increase in the number of foreigners in a domestic league tends to generate a subsequent improvement in the performance of the national team (which has to be comprised only of local players). We consider also why countries may still choose to restrict numbers of foreign players despite their positive spillovers.
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California's Exports and the 2004 Overseas Office Closures
Andrew Cassey
Economic Inquiry, forthcoming
Abstract:
Estimating the impact of state import promotion programs on exports is difficult because of a simultaneity program. The 2003 California budget crisis provides a natural experiment allowing for an unbiased estimate. Due to the crisis, California closed all 12 overseas offices on 1 January 2004. Applying the differences-in-differences estimator to a sample of 44 countries over eight years yields an estimated 2%-3% increase in exports if the offices remained open. But this estimate is not statistically significant. Therefore, I find no statistical evidence that California's overseas offices increased exports.
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Offshoring Jobs? Multinationals and US Manufacturing Employment
Ann Harrison & Margaret McMillan
Review of Economics and Statistics, forthcoming
Abstract:
Using firm-level data collected by the U.S. Bureau of Economic Analysis, we estimate the impact on U.S. manufacturing employment of changes in foreign affiliate wages. We show that the motive for offshoring and consequently the location of offshore activity significantly affects the impact of offshoring on parent employment. In general, offshoring to low-wage countries substitutes for domestic employment. However, for firms which do significantly different tasks at home and abroad, foreign and domestic employment are complements. These offsetting effects may be combined to show that offshoring by U.S. based multinationals is associated with a quantitatively small decline in manufacturing employment.
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The Fair Trade Challenge to Embedded Liberalism
Sean Ehrlich
International Studies Quarterly, December 2010, Pages 1013-1033
Abstract:
The embedded liberalism thesis, a major component of the trade policy literature in political science, argues that governments can build support for free trade by compensating economically those hurt by trade, usually with welfare or education policies. This strategy depends, though, on opposition to trade being driven by employment factors, such as job or income loss because of increased competition. The current fair trade movement raises many non-employment criticisms of trade such as concerns about the environment and labor standards but the literature tends to treat these concerns as traditional protectionism in disguise. This article argues, instead, that for many, these concerns are sincere and that this presents a growing challenge to the compromise of embedded liberalism. The article demonstrates this by examining survey data in the United States and showing that those who support fair trade tend to have characteristics that are opposite those who support economic protection.
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Looking for Local Labor Market Effects of NAFTA
John McLaren & Shushanik Hakobyan
NBER Working Paper, November 2010
Abstract:
Using US Census data for 1990 and 2000, we estimate effects of the NAFTA agreement on the US wages. We look for any indication of effects of the agreement on (i) local labor markets dependent on industries vulnerable to import competition from Mexico, and (ii) workers employed in industries competing with Mexican imports. We find evidence of only modest local labor-market effects, but evidence for a strong industry effect, dramatically lowering wage growth for blue-collar workers in the most affected industries. These distributional effects are much larger than aggregate welfare effects estimated by other authors. In addition, we find strong evidence of anticipatory adjustment in places whose protection was expected to fall but had not yet fallen; this adjustment appears to have conferred an anticipatory rent to workers in those locations.
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How Bad is Antidumping?: Evidence from Panel Data
Peter Egger & Douglas Nelson
Review of Economics and Statistics, forthcoming
Abstract:
Current research on antidumping suggests a number of channels through which antidumping affects the volume of world trade. This paper uses a structural approach to the gravity model framework to evaluate these hypotheses using data on trade volume over the period 1948-2001. We conclude that the volume and welfare effects have been negative, but quite modest.
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Does governance travel around the world? Evidence from institutional investors
Reena Aggarwal, Isil Erel, Miguel Ferreira & Pedro Matos
Journal of Financial Economics, forthcoming
Abstract:
We examine whether institutional investors affect corporate governance by analyzing portfolio holdings of institutions in companies from 23 countries during the period 2003-2008. We find that firm-level governance is positively associated with international institutional investment. Changes in institutional ownership over time positively affect subsequent changes in firm-level governance, but the opposite is not true. Foreign institutions and institutions from countries with strong shareholder protection play a role in promoting governance improvements outside of the U.S. Institutional investors affect not only which corporate governance mechanisms are in place, but also outcomes. Firms with higher institutional ownership are more likely to terminate poorly performing Chief Executive Officers (CEOs) and exhibit improvements in valuation over time. Our results suggest that international portfolio investment by institutional investors promotes good corporate governance practices around the world.