Do free trade agreements actually increase members’ international trade?

For more than forty years, the gravity equation has been a workhorse for cross-country empirical analyses of international trade flows and, in particular, the effects of free trade agreements (FTAs) on trade flows. However, the gravity equation is subject to the same econometric critique as earlier cross-industry studies of U.S. tariff and nontariff barriers and U.S. multilateral imports: Trade policy is not an exogenous variable. The authors address econometrically the endogeneity of FTAs using instrumental-variable (IV) techniques, control-function (CF) techniques, and panel-data techniques; IV and CF approaches do not adjust for endogeneity well, but a panel-data approach does. Accounting econometrically for the FTA variable’s endogeneity yields striking empirical results: The effect of FTAs on trade flows is quintupled.

On the Angular Dependence of the Radiative Gluon Spectrum

The induced momentum spectrum of soft gluons radiated from a high energy quark produced in and propagating through a QCD medium is reexamined in the BDMPS formalism. A mistake in our published work (Physical Review C60 (1999) 064902) is corrected. The correct dependence of the fractional induced loss $R(\theta_{{\rm cone}})$ as a universal function of the variable $\theta^2_{{\rm cone}} L^3 \hat q$ where $L$ is the size of the medium and $\hat q$ the transport coefficient is presented. We add the proof that the radiated gluon momentum spectrum derived in our formalism is equivalent with the one derived in the Zakharov-Wiedemann approach.Comment: LaTex, 5 pages, 1 figur

Quenching of hadron spectra in media

We determine how the yield of large transverse momentum hadrons is modified due to induced gluon radiation off a hard parton traversing a QCD medium. The quenching factor is formally a collinear- and infrared-safe quantity and can be treated perturbatively. In spite of that, in the $p_\perp$ region of practical interest, its value turns out to be extremely sensitive to large distances and can be used to unravel the properties of dense quark-gluon final states produced in heavy ion collisions. We also find that the standard modelling of quenching by shifting $p_\perp$ in the hard parton cross section by the mean energy loss is inadequate.Comment: 20 pp, 5 eps figure

The growth of bilateralism

One of the most notable international economic events over the past 20 years has been the proliferation of bilateral free trade agreements (FTAs). Bilateral agreements account for 80 percent of all agreements notified to the WTO, 94 percent of those signed or under negotiation, and currently 100 percent of those at the proposal stage. Some have argued that the growth of bilateralism is attributable to governments having pursued a policy of “competitive liberalization" - implementing bilateral FTAs to offset potential trade diversion caused by FTAs of “third-country-pairs" - but the growth of bilateralism can also be attributed potentially to “tariff complementarity" - the incentive for FTA members to reduce their external tariffs on nonmembers. Guided by new comparative statics from the numerical general equilibrium monopolistic competition model of FTA economic determinants in Baier and Bergstrand (2004), we augment their parsimonious logit (and probit) model of the economic determinants of bilateral FTAs to incorporate theory-motivated indexes to examine the influence of existing memberships on subsequent FTA formations. The model can predict correctly 90 percent of the bilateral FTAs within five years of their formation, while still predicting “No-FTA" correctly in 90 percent of the observations when no FTA exists, using a sample of over 350,000 observations for pairings of 146 countries from 1960-2005. Even imposing the higher correct prediction rate of “No-FTA" of 97 percent in Baier and Bergstrand (2004), the parsimonious model still predicts correctly 75 percent of these rare FTA events; only 3 percent of the observations reflect a country-pair having an FTA in any year. The results suggest that - while evidence supports that “competitive liberalization" is a force for bilateralism - the effect on the likelihood a pair of countries forming an FTA of the pair's own FTAs with other countries (i.e., tariff complementarity) is likely just as important as the effect of third-country-pairs' FTAs (i.e., competitive liberalization) for the growth of bilateralism

Angular Dependence of the Radiative Gluon Spectrum and the Energy Loss of Hard Jets in QCD Media

The induced momentum spectrum of soft gluons radiated from a high energy quark propagating through a QCD medium is derived in the BDMPS formalism. A calorimetric measurement for the medium dependent energy lost by a jet with opening angle $\theta_{{\rm cone}}$ is proposed.The fraction of this energy loss with respect to the integrated one appears to be the relevant observable.It exhibits a universal behaviour in terms of the variable $\theta^2_{{\rm cone}} L^3 \hat q$ where $L$ is the size of the medium and $\hat q$ the transport coefficient. Phenomenological implications for the differences between cold and hot QCD matter are discussed.Comment: 13 pages and 7 figures, RevTe

Limit Synchronization in Markov Decision Processes

Markov decision processes (MDP) are finite-state systems with both strategic and probabilistic choices. After fixing a strategy, an MDP produces a sequence of probability distributions over states. The sequence is eventually synchronizing if the probability mass accumulates in a single state, possibly in the limit. Precisely, for 0 <= p <= 1 the sequence is p-synchronizing if a probability distribution in the sequence assigns probability at least p to some state, and we distinguish three synchronization modes: (i) sure winning if there exists a strategy that produces a 1-synchronizing sequence; (ii) almost-sure winning if there exists a strategy that produces a sequence that is, for all epsilon > 0, a (1-epsilon)-synchronizing sequence; (iii) limit-sure winning if for all epsilon > 0, there exists a strategy that produces a (1-epsilon)-synchronizing sequence. We consider the problem of deciding whether an MDP is sure, almost-sure, limit-sure winning, and we establish the decidability and optimal complexity for all modes, as well as the memory requirements for winning strategies. Our main contributions are as follows: (a) for each winning modes we present characterizations that give a PSPACE complexity for the decision problems, and we establish matching PSPACE lower bounds; (b) we show that for sure winning strategies, exponential memory is sufficient and may be necessary, and that in general infinite memory is necessary for almost-sure winning, and unbounded memory is necessary for limit-sure winning; (c) along with our results, we establish new complexity results for alternating finite automata over a one-letter alphabet

Temperature dependence of antiferromagnetic order in the Hubbard model

We suggest a method for an approximative solution of the two dimensional Hubbard model close to half filling. It is based on partial bosonisation, supplemented by an investigation of the functional renormalisation group flow. The inclusion of both the fermionic and bosonic fluctuations leads in lowest order to agreement with the Hartree-Fock result or Schwinger-Dyson equation and cures the ambiguity of mean field theory . We compute the temperature dependence of the antiferromagnetic order parameter and the gap below the critical temperature. We argue that the Mermin-Wagner theorem is not practically applicable for the spontaneous breaking of the continuous spin symmetry in the antiferromagnetic state of the Hubbard model. The long distance behavior close to and below the critical temperature is governed by the renormalisation flow for the effective interactions of composite Goldstone bosons and deviates strongly from the Hartree-Fock result.Comment: New section on critical behavior 31 pages,17 figure

Suppression of Quarkonium Production in Heavy Ion Collisions at RHIC and LHC

A model for the production of quarkonium states in the midrapidity region at RHIC and LHC energy range is presented which explores well understood properties of QCD only. An increase of the quarkonium hadronisation time with the initial energy leads to a gradual change of the most important phenomena from fixed target- to collider-energies. We evaluate nuclear effects in the quarkonium production due to medium modification of the momentum distribution of the heavy quarks produced in the hard interactions, i.e. due to the broadening of the transverse momentum distribution. Other nuclear effects, i.e. nuclear shadowing and parton energy loss, are also evaluated.Comment: 5 pages, 1 table, 1 figure, Contribution to the Proceedings of the V International Conference on Strangeness in Quark Matter July 20-25, 2000 Berkeley, Californi

Kinetic Equation for Gluons in the Background Gauge of QCD

We derive the quantum kinetic equation for a pure gluon plasma, applying the background field and closed-time-path method. The derivation is more general and transparent than earlier works. A term in the equation is found which, as in the classical case, corresponds to the color charge precession for partons moving in the gauge field.Comment: RevTex 4, 4 pages, no figure, PRL accepted versio

Heterogeneous Economic Integration Agreement Effects

Gravity equations have been used for more than 50 years to estimate ex post the partial effects of trade costs on international trade flows, and the well-known - and traditionally presumed exogenous – “trade-cost elasticity” plays a central role in computing general equilibrium trade-flow and welfare effects of trade-cost changes. This paper addresses theoretically and empirically the influence of variable and fixed export costs in explaining the likely heterogeneity in the trade-cost elasticity. We offer four potential contributions. First, for motivation, we show empirically that the heterogeneity in various economic integration agreements’ (EIAs’) partial effects on trade flows far exceeds that explained simply by variation in depth of the trade liberalization. Second, we use standard Armington- and Melitz-type general equilibrium trade models to motivate theoretically the roles of variable trade costs and of fixed and variable export costs, respectively, for explaining (endogenous) heterogeneous partial effects of changes in ad valorem tariff rates on trade flows, as well as on intensive and extensive product margins (with or without network effects and with an untruncated Pareto distribution in the Melitz model). Third, we show empirically that the heterogeneity in EIAs’ partial effects on the intensive margin is explained well just by distance and adjacency, capturing variable natural trade costs; however, the heterogeneity in EIAs’ partial effects on the extensive margin is explained empirically by distance and adjacency, as well as several other cultural and institutional variables, capturing variable and fixed export costs. Fourth, we show that such estimated heterogeneous effects can predict 83-94 percent of economic welfare effects of EIAs and can potentially predict ex ante a potential EIA’s partial trade-flow effect and general equilibrium welfare effect