The authors would like to thank James Kenkel, Jeffrey Frankel, and Paul Wachtel for several helpf... more The authors would like to thank James Kenkel, Jeffrey Frankel, and Paul Wachtel for several helpful comments, and Pat Suozzi for assistance in collecting much of the data used in this study. The suggestions of two anonymous referees led to substantial changes which ...
In the past two decades, considerable progress has been made in studying the eco-nomic relationsh... more In the past two decades, considerable progress has been made in studying the eco-nomic relationships between countries through the linkage of large-scale national econometric models. Examples of these proj-ects include Project Link, the RDX2-MPS experiments of the Bank of ...
Modeling the determinants of long-run, or equilibrium, exchange rates is currently extremely fash... more Modeling the determinants of long-run, or equilibrium, exchange rates is currently extremely fashionable.1 In many ways this work has been inspired by recent developments in the time series literature, rather than any new theoretical interest in the determinants of long-run exchange rates. Nevertheless, this work is interesting since, in summary form, it suggests that sensible long-run relationships can be derived, particularly when the span of the data is increased from the recent floating period to a period encompassing around one hundred years of annual data.2 By sensible long-run relationships we mean, for example, when a researcher conditions an exchange rate on relative prices she finds that the exchange rate is homogeneous with respect to relative prices and that the adjustment to equilibrium, following a disturbance, takes around eight years to complete. One key problem, though, in extending the data span on an historical basis is that it may expose the investigated relationship to destabilizing regime changes. Also, for relationships which involve price indices (and indeed non-indexed variables) it is not clear how homogeneous these are over long historical periods in which the underlying basket must have changed dramatically.
If you experience problems downloading a file, check if you have the proper application to view i... more If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. ...
The Review of Economics and Statistics, Feb 1, 1993
Abstract-The monetary approach to exchange rate determi-nation (MAER) has served as a theoretical... more Abstract-The monetary approach to exchange rate determi-nation (MAER) has served as a theoretical workhorse in open economy macroeconomics, yet empirical evidence concerning its validity is mixed: tests based on structural forms of the model are typically negative, while cross-...
Berkowitz, Daniel, DeJong, David N., and Husted, Steven-Quantifying Price Liberalization in Russi... more Berkowitz, Daniel, DeJong, David N., and Husted, Steven-Quantifying Price Liberalization in Russia We seek to quantify the success of Russia's attempt to achieve price-liberalization initiatives as part of the reforms established under the Big Bang of January 1992. We do so by studying the time-series behavior of commodity prices between 1992-1995 and focusing on the relationship between the behavior of prices of similar goods within and across cities. We supplement this analysis by examining city-level surveys that seek to quantify the extent to which firms are currently able to set and adjust commodity prices in accordance with market conditions. Our evidence suggests that price liberalization gradually gained momentum following the Big Bang and that prices generally reflected market conditions by the first quarter of 1995. However, regional pockets of resistance to price-reform efforts continue to persist, indicating that Russia has yet to achieve full market integration.
ABSTRACT This paper uses a stochastic frontier production‐function model to measure and compare p... more ABSTRACT This paper uses a stochastic frontier production‐function model to measure and compare productivity efficiency in the manufacturing sector of states in the United States over the period 1959–1972. Based on this model we find considerable variations in productive efficiency across states. A large portion of the variation is found to be related to regional differences in labor‐force characteristics, levels of urbanization and industrial structure. We also examine the relationship between productive efficiency and the subsequent growth of manufacturing and find some evidence of a weak relationship between efficiency and the growth of employment.
In this paper we examine the entry of new countries and products into world trade ‡ows. This is m... more In this paper we examine the entry of new countries and products into world trade ‡ows. This is manifest in our data sample by a growth in exporter-importer-product combinations from about 430 thousand in 1995 to almost 620 thousand in 2005. Most of this growth has occurred because more and more developing or emerging market countries are entering the market as exporters. To study this growth in trade at the extensive margin, we develop a …rm level model based on the work of Helpman, Meltitz, and Rubenstein (2008) of the decision to enter the export market. Using data from 129 countries and 144 industrial sectors, we then estimate this model for the years 1995 and 2005. We report evidence that rising …rm-level productivity levels in our sample countries, either in overcoming the costs of direct exports or of engaging trade intermediates, that provides the best explanation for the observed pattern of the growth in exporter-importer-product pairs.
The Review of Economics and Statistics, Feb 1, 1992
REFERENCES Beveridge, Stephen, and Charles R. Nelson, "A New Ap-... more REFERENCES Beveridge, Stephen, and Charles R. Nelson, "A New Ap-proach to Decomposition of Economic Time Series into Permanent and Transitory Components with Par-ticular Attention to Measurement of the Business Cy-cle," Journal of Monetary Economics 7 (Mar. 1981), ...
Over the period of 1995-2005 an increasing number of differentiated products have been exported f... more Over the period of 1995-2005 an increasing number of differentiated products have been exported from developing countries, and much of the growth in world trade at the extensive margin has come from these countries. Leading examples of this type of trade expansion, both in terms of products and new markets, have been two groups of dynamic economies known collectively as the BRICs (Brazil, Russia, India, and China) and the MINTs (Mexico, Indonesia, Nigeria,and Turkey). Using bilateral trade data of 129 countries over 144 products, we study the determinants of the success of these countries in expanding market access at the product level. We estimate a logit model based on the heterogeneous-Â…rm model at the product level for each year and fiÂ…nd evidence that BRIC and MINT country success in accessing foreign markets is due to productivity growth of industries, probably engendered by firm-level technological advance of existing fiÂ…rms or entry of foreign Â…firms that have begun to produce in and export from those countries.
He thanks them for their superb hospitality. We also thank an anonymous referee for guidance and ... more He thanks them for their superb hospitality. We also thank an anonymous referee for guidance and Jim Cassing, Asatoshi Maeshiro, and Tom Rawski for helpful comments, and the Economics Department at WVU for financial support. The usual proviso applies.
Sede de la CEPAL en Santiago (Estudios e Investigaciones), 1993
during the Canada-U.S. Free Trade Area (CUSTA) talks was to gain special exclusion from certain t... more during the Canada-U.S. Free Trade Area (CUSTA) talks was to gain special exclusion from certain trade laws, including Section 301. What the Canadians achieved in these talks was the creation of a dispute settlement mechanism designed to achieve expeditious and fair solutions to disagreements that might arise between the two countries. This mechanism offers several approaches to dispute settlement including consultations, mediation, binding arbitration, and recourse to outside experts and panels. A similar format has been agreed to by the negotiators of the North American Free Trade Area (NAFTA). The existence of the CUSTA dispute settlement mechanism, however, in no way supersedes the authority granted to the USTR. Indeed, there have airead}-been two 301 cases filed against the government of Canada since the signing of the trade agreement between the two countries, with one resulting in trade retaliation. A third case was resolved using the newly created dispute mechanism. Section 301 has been discussed in other fora. Most recently, the European Community (EC) has called for the elimination of Section 301 as a target for negotiation in the Uruguay Round.^ This was met by opposition from U.S. negotiators, who warned that Congress would likely refuse to ratify any agreement that included such a provision. There are a variety of scenarios where it is conceivable that, absent any agreements to the contrary within a WHFTA pact, the use of Section 301 may increase vis á vis WHFTA countries. First, if the V7HFTA is successful then trade will rise, and U.S. direct foreign investment will almost certainly expand into the WHFTA countries. As this happens, U.S. firms will undoubtedly experience problems with local statutes, governmental practices, and the like that may cause ^See Julie Wolf, "EC Seeks Removal of U.
... Steven Husted † ... Ethiopia, Estonia (*), Finland (*), France (*), Gabon, Georgia, Gambia, G... more ... Steven Husted † ... Ethiopia, Estonia (*), Finland (*), France (*), Gabon, Georgia, Gambia, Germany (*), Ghana, Kiribati, Greece (*), Grenada, Guatemala, Guinea, Guyana, Honduras, Hong Kong (*), Hungary (*), Iceland (*), Indonesia, Iran, Ireland (*), Israel (*), Italy (*), Côte d ...
This paper examines the e¤ects of trade frictions, including tari¤s and a variety of factors th... more This paper examines the e¤ects of trade frictions, including tari¤s and a variety of factors that raise trade costs, on export market access at the product level and, in particular, the role these frictions have on the ability of developing countries to access world markets. We …nd that a variety of trade frictions do serve to limit market access. We …nd distance and e¢ ciency in trade facilitation are signi…cant determinants of the probability of success in entering foreign markets. We examine whether there are any systematic development-related biases from these frictions that further limit market access for exporters from developing countries. Our results suggest that developing countries are not di¤erentially impacted by these factors. In the spirit of an earlier study by Markusen and Wigle (1990), we also conduct a series of counterfactual exercises to see the impact of signi…cant reductions in trade frictions on developing country market access. In contrast to their results, our …ndings show that reductions in tari¤s do not greatly improve the number of new markets for developing countries. Our results suggest a traditional recommendation to resolve the market access problem for developing countries: expansion and diversi…cation of the industrial base and productivity improvements in the handling of exports. Both are vital preconditions to increasing the number of export markets.
The authors would like to thank James Kenkel, Jeffrey Frankel, and Paul Wachtel for several helpf... more The authors would like to thank James Kenkel, Jeffrey Frankel, and Paul Wachtel for several helpful comments, and Pat Suozzi for assistance in collecting much of the data used in this study. The suggestions of two anonymous referees led to substantial changes which ...
In the past two decades, considerable progress has been made in studying the eco-nomic relationsh... more In the past two decades, considerable progress has been made in studying the eco-nomic relationships between countries through the linkage of large-scale national econometric models. Examples of these proj-ects include Project Link, the RDX2-MPS experiments of the Bank of ...
Modeling the determinants of long-run, or equilibrium, exchange rates is currently extremely fash... more Modeling the determinants of long-run, or equilibrium, exchange rates is currently extremely fashionable.1 In many ways this work has been inspired by recent developments in the time series literature, rather than any new theoretical interest in the determinants of long-run exchange rates. Nevertheless, this work is interesting since, in summary form, it suggests that sensible long-run relationships can be derived, particularly when the span of the data is increased from the recent floating period to a period encompassing around one hundred years of annual data.2 By sensible long-run relationships we mean, for example, when a researcher conditions an exchange rate on relative prices she finds that the exchange rate is homogeneous with respect to relative prices and that the adjustment to equilibrium, following a disturbance, takes around eight years to complete. One key problem, though, in extending the data span on an historical basis is that it may expose the investigated relationship to destabilizing regime changes. Also, for relationships which involve price indices (and indeed non-indexed variables) it is not clear how homogeneous these are over long historical periods in which the underlying basket must have changed dramatically.
If you experience problems downloading a file, check if you have the proper application to view i... more If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. ...
The Review of Economics and Statistics, Feb 1, 1993
Abstract-The monetary approach to exchange rate determi-nation (MAER) has served as a theoretical... more Abstract-The monetary approach to exchange rate determi-nation (MAER) has served as a theoretical workhorse in open economy macroeconomics, yet empirical evidence concerning its validity is mixed: tests based on structural forms of the model are typically negative, while cross-...
Berkowitz, Daniel, DeJong, David N., and Husted, Steven-Quantifying Price Liberalization in Russi... more Berkowitz, Daniel, DeJong, David N., and Husted, Steven-Quantifying Price Liberalization in Russia We seek to quantify the success of Russia's attempt to achieve price-liberalization initiatives as part of the reforms established under the Big Bang of January 1992. We do so by studying the time-series behavior of commodity prices between 1992-1995 and focusing on the relationship between the behavior of prices of similar goods within and across cities. We supplement this analysis by examining city-level surveys that seek to quantify the extent to which firms are currently able to set and adjust commodity prices in accordance with market conditions. Our evidence suggests that price liberalization gradually gained momentum following the Big Bang and that prices generally reflected market conditions by the first quarter of 1995. However, regional pockets of resistance to price-reform efforts continue to persist, indicating that Russia has yet to achieve full market integration.
ABSTRACT This paper uses a stochastic frontier production‐function model to measure and compare p... more ABSTRACT This paper uses a stochastic frontier production‐function model to measure and compare productivity efficiency in the manufacturing sector of states in the United States over the period 1959–1972. Based on this model we find considerable variations in productive efficiency across states. A large portion of the variation is found to be related to regional differences in labor‐force characteristics, levels of urbanization and industrial structure. We also examine the relationship between productive efficiency and the subsequent growth of manufacturing and find some evidence of a weak relationship between efficiency and the growth of employment.
In this paper we examine the entry of new countries and products into world trade ‡ows. This is m... more In this paper we examine the entry of new countries and products into world trade ‡ows. This is manifest in our data sample by a growth in exporter-importer-product combinations from about 430 thousand in 1995 to almost 620 thousand in 2005. Most of this growth has occurred because more and more developing or emerging market countries are entering the market as exporters. To study this growth in trade at the extensive margin, we develop a …rm level model based on the work of Helpman, Meltitz, and Rubenstein (2008) of the decision to enter the export market. Using data from 129 countries and 144 industrial sectors, we then estimate this model for the years 1995 and 2005. We report evidence that rising …rm-level productivity levels in our sample countries, either in overcoming the costs of direct exports or of engaging trade intermediates, that provides the best explanation for the observed pattern of the growth in exporter-importer-product pairs.
The Review of Economics and Statistics, Feb 1, 1992
REFERENCES Beveridge, Stephen, and Charles R. Nelson, "A New Ap-... more REFERENCES Beveridge, Stephen, and Charles R. Nelson, "A New Ap-proach to Decomposition of Economic Time Series into Permanent and Transitory Components with Par-ticular Attention to Measurement of the Business Cy-cle," Journal of Monetary Economics 7 (Mar. 1981), ...
Over the period of 1995-2005 an increasing number of differentiated products have been exported f... more Over the period of 1995-2005 an increasing number of differentiated products have been exported from developing countries, and much of the growth in world trade at the extensive margin has come from these countries. Leading examples of this type of trade expansion, both in terms of products and new markets, have been two groups of dynamic economies known collectively as the BRICs (Brazil, Russia, India, and China) and the MINTs (Mexico, Indonesia, Nigeria,and Turkey). Using bilateral trade data of 129 countries over 144 products, we study the determinants of the success of these countries in expanding market access at the product level. We estimate a logit model based on the heterogeneous-Â…rm model at the product level for each year and fiÂ…nd evidence that BRIC and MINT country success in accessing foreign markets is due to productivity growth of industries, probably engendered by firm-level technological advance of existing fiÂ…rms or entry of foreign Â…firms that have begun to produce in and export from those countries.
He thanks them for their superb hospitality. We also thank an anonymous referee for guidance and ... more He thanks them for their superb hospitality. We also thank an anonymous referee for guidance and Jim Cassing, Asatoshi Maeshiro, and Tom Rawski for helpful comments, and the Economics Department at WVU for financial support. The usual proviso applies.
Sede de la CEPAL en Santiago (Estudios e Investigaciones), 1993
during the Canada-U.S. Free Trade Area (CUSTA) talks was to gain special exclusion from certain t... more during the Canada-U.S. Free Trade Area (CUSTA) talks was to gain special exclusion from certain trade laws, including Section 301. What the Canadians achieved in these talks was the creation of a dispute settlement mechanism designed to achieve expeditious and fair solutions to disagreements that might arise between the two countries. This mechanism offers several approaches to dispute settlement including consultations, mediation, binding arbitration, and recourse to outside experts and panels. A similar format has been agreed to by the negotiators of the North American Free Trade Area (NAFTA). The existence of the CUSTA dispute settlement mechanism, however, in no way supersedes the authority granted to the USTR. Indeed, there have airead}-been two 301 cases filed against the government of Canada since the signing of the trade agreement between the two countries, with one resulting in trade retaliation. A third case was resolved using the newly created dispute mechanism. Section 301 has been discussed in other fora. Most recently, the European Community (EC) has called for the elimination of Section 301 as a target for negotiation in the Uruguay Round.^ This was met by opposition from U.S. negotiators, who warned that Congress would likely refuse to ratify any agreement that included such a provision. There are a variety of scenarios where it is conceivable that, absent any agreements to the contrary within a WHFTA pact, the use of Section 301 may increase vis á vis WHFTA countries. First, if the V7HFTA is successful then trade will rise, and U.S. direct foreign investment will almost certainly expand into the WHFTA countries. As this happens, U.S. firms will undoubtedly experience problems with local statutes, governmental practices, and the like that may cause ^See Julie Wolf, "EC Seeks Removal of U.
... Steven Husted † ... Ethiopia, Estonia (*), Finland (*), France (*), Gabon, Georgia, Gambia, G... more ... Steven Husted † ... Ethiopia, Estonia (*), Finland (*), France (*), Gabon, Georgia, Gambia, Germany (*), Ghana, Kiribati, Greece (*), Grenada, Guatemala, Guinea, Guyana, Honduras, Hong Kong (*), Hungary (*), Iceland (*), Indonesia, Iran, Ireland (*), Israel (*), Italy (*), Côte d ...
This paper examines the e¤ects of trade frictions, including tari¤s and a variety of factors th... more This paper examines the e¤ects of trade frictions, including tari¤s and a variety of factors that raise trade costs, on export market access at the product level and, in particular, the role these frictions have on the ability of developing countries to access world markets. We …nd that a variety of trade frictions do serve to limit market access. We …nd distance and e¢ ciency in trade facilitation are signi…cant determinants of the probability of success in entering foreign markets. We examine whether there are any systematic development-related biases from these frictions that further limit market access for exporters from developing countries. Our results suggest that developing countries are not di¤erentially impacted by these factors. In the spirit of an earlier study by Markusen and Wigle (1990), we also conduct a series of counterfactual exercises to see the impact of signi…cant reductions in trade frictions on developing country market access. In contrast to their results, our …ndings show that reductions in tari¤s do not greatly improve the number of new markets for developing countries. Our results suggest a traditional recommendation to resolve the market access problem for developing countries: expansion and diversi…cation of the industrial base and productivity improvements in the handling of exports. Both are vital preconditions to increasing the number of export markets.
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