An Empty Promise: Average Cost Savings and Scale Economies Among Canadian and American Manufacturers, 1910-1998

During the debate that led up to the implementation of a bilateral free trade agreement between Canada and the U.S. on January 1, 1989, much was made of economists' claims that both nations could expect significant welfare improvements as a result of the removal of tariffs on traded goods. The welfare gains were expected to flow from average cost savings associated with the exploitation of scale economies. In this paper we show that it was overly optimistic to predict substantive reductions in average costs in the response to any increases in the scale of production among Canadian or American manufacturing firms. Therefore, ex ante we should have expected trade liberalization between Canada and the U.S. to have had only muted scale, average cost, and welfare effects.Economic History, Technology and Scale, Growth and Fluctuations

Cooperative production and efficiency

We characterize the sharing rule for which a contribution mechanism achieves efficiency in a cooperative production setting when agents are heterogeneous. The sharing rule bears no resemblance to those considered by the previous literature. We also show for a large class of sharing rules that if Nash equilibrium yields efficient allocations, the production function displays constant returns to scale, a case in which cooperation in production is useless

Does Economic Geography Matter for International Specialization?

There are two principal theories of why countries trade: comparative advantage and increasing returns to scale. Yet there is no empirical work that assesses the relative importance of these two theories in accounting for production structure and trade. We use a framework that nests an increasing returns model of economic geography featuring home market effects with that of Heckscher-Ohlin-Vanek. We employ these trade models to account for the structure of OECD manufacturing production. The data militate against the economic geography framework. Moreover, even in the specification most generous to economic geography, endowments account for 90 percent of the explainable variance, economic geography but 10 percent.

Market Access, Economic Geography, and Comparative Advantage: An Empirical Assessment

The increasing returns revolution in trade is incomplete in an important respect there exists no compelling empirical demonstration of the role of increasing returns in determining production and trade structure. One reason is that trade patterns of the canonical increasing returns models are a consequence simply of specialization, which all theories permit. Krugman (1980) shows that increasing returns models with costs of trade economic geography do allow a simple test: home market effects of demand on production. Davis and Weinstein (1996) reject the simple Krugman (1980) model on OECD data. Here we pair the model with a richer geography structure and find evidence of the importance of increasing returns, in combination with comparative advantage, in affecting OECD manufacturing production structure. The results underscore the importance of market access in implementing models of economic geography.

Is TRIPS suffering from Big Giant’s Syndrome: Good Economics versus Self Interest?

The paper discusses TRIPS as a protection measure on knowledge and new technologies through property rights and analyses the Southern concern if protection of new technologies by means of TRIPS may mean that South can no longer imitate the North in implementing emerging technologies and concepts as was the case with Newly Industrialized Countries of Asia in 1980s. The paper shows that trade and research and development trends are highly skewed in favor of the North and this means that in any such international economic landscape, TRIPS may advantage the North and restrict the South from trading under a technologically aligned level playing field

Investing in the Clean Trillion: Closing the Clean Energy Investment Gap

In 2010 world governments agreed to limit the increase in global temperature to two degrees Celsius (2 °C) above pre-industrial levels to avoid the worst impacts of climate change. To have an 80 percent chance of maintaining this 2 °C limit, the IEA estimates an additional $36 trillion in clean energy investment is needed through 2050 -- or an average of$1 trillion more per year compared to a "business as usual" scenario over the next 36 years.This report provides 10 recommendations for investors, companies and policymakers to increase annual global investment in clean energy to at least $1 trillion by 2030 -- roughly a four-fold jump from current investment levels

The pricing of Federal Reserve services under MCA

Depository Institutions Deregulation and Monetary Control Act of 1980 ; Correspondent banks ; Federal Reserve banks - Service charges

The Chinese position as a global player in international comparison with the WTO members: Efficiency analysis and 4IR

During the last quarter-century, globalisation processes affected changes in the world economy in the form of intensifying competition in the international and internal markets. The result is the creation of a global marketplace that is mostly indifferent to national borders and governmental influences. This development has generated widespread interest in competitiveness. Competitiveness affects international relations, especially nowadays, given the changing position of the global leaders and the growth of new economic powers such as China. China has come a long way and has the opportunity to be a global leader in several required fields that will be the cornerstones of global growth in the next decades. Led by China, emerging economies are increasing their share in the worldwide economy and intensifying competition in nearly all sectors. It creates new threats and challenges for players in the global economy, and growing competitiveness must be efficient. The article evaluates the Chinese competitiveness in comparison with the World Trade Organization members by the Data Envelopment Analysis in the pre-in-post crisis period and considering the Fourth Industrial Revolution shifting humanity into a new phase.Web of Science6148

Heroes, villains and victims: agricultural subsidies and their impacts on food security and poverty reduction

Subsidies have been a pervasive feature of agricultural policy in both high and low income countries. This chapter describes different kinds of subsidies and reviews evidence on their economic, food security and poverty impacts. The evidence suggests that different subsidy programmes have had in some contexts profoundly positive and in other contexts profoundly negative impacts on food security and on the livelihoods of poor people and poor societies. Discussions of the historical and potential roles of subsidies and their more recent use have, however, been the victim of an unhealthy over-emphasis on their negative effects without sufficient consideration of the potential to overcome these. These issues need to be addressed if agricultural subsidies are to fulfill their potential to make a significant contribution in addressing continuing and emerging challenges to food insecurity and poverty

Economic Impacts of GO TO 2040

The economy of the Chicago metropolitan region has reached a critical juncture. On the one hand, Chicagoland is currently a highly successful global region with extraordinary assets and outputs. The region successfully made the transition in the 1980s and 1990s from a primarily industrial to a knowledge and service-based economy. It has high levels of human capital, with strong concentrations in information-sector industries and knowledge-based functional clusters -- a headquarters region with thriving finance, business services, law, IT and emerging bioscience, advanced manufacturing and similar high-growth sectors. It combines multiple deep areas of specialization, providing the resilience that comes from economic diversity. It is home to the abundant quality-of-life amenities that flow from business and household prosperity.On the other hand, beneath this static portrait of our strengths lie disturbing signs of a potential loss of momentum. Trends in the last decade reveal slowing rates, compared to other regions, of growth in productivity and gross metropolitan product. Trends in innovation, new firm creation and employment are comparably lagging. The region also faces emerging challenges with respect to both spatial efficiency and governance.In this context, the Chicago Metropolitan Agency for Planning (CMAP) has just released GO TO 2040, its comprehensive, long-term plan for the Chicago metropolitan area. The plan contains recommendations aimed at shaping a wide range of regional characteristics over the next 30 years, during which time more than 2 million new residents are anticipated. Among the chief goals of GO TO 2040 are increasing the region's long-term economic prosperity, sustaining a high quality of life for the region's current and future residents and making the most effective use of public investments. To this end, the plan addresses a broad scope of interrelated issues which, in aggregate, will shape the long-term physical, economic, institutional and social character of the region.This report by RW Ventures, LLC is an independent assessment of the plan from a purely economic perspective, addressing the impacts that GO TO 2040's recommendations can be expected to have on the future of the regional economy. The assessment begins by describing how implementation of GO TO 2040's recommendations would affect the economic landscape of the region; reviews economic research and practice about the factors that influence regional economic growth; and, given both of these, articulates and illustrates the likely economic impacts that will flow from implementation of the plan. In the course of reviewing the economic implications of the plan, the assessment also provides recommendations of further steps, as the plan is implemented, for increasing its positive impact on economic growth