An Economic Theory of Foreign Interventions and Regime Change

I construct a theory of foreign interventions in which the preferences of the foreign country over alternative local groups are determined by each group's international economic ties. In equilibrium, the foreign country supports the group with which it has the strongest ties, since this is most influenceable from the outside. However this is counterweighted by the tendency of the domestic political system to favour the least influenceable group. I allow for a non-economic dimension of policy (geopolitics), and study how the saliency of this dimension may play in favor of the incumbent group. My results help interpret the economic rationale for many Western interventions in developing countries in the 20th century, and the role of economic nationalism in motivating the struggle for regime change. Furthermore, they help explain why the Cold War strengthened the West's preference for specific local groups. I provide detailed historical evidence in favor of my arguments.regime change, foreign interventions, economic power, economic nationalism, Cold War, Latin America

The Chinese Psyche behind playing the Doklam Game with India

Strengthening its hardline rhetoric with a video titled ‘Seven Sins of India’, the official Chinese news media Xinhua followed up with another video which apparently is a part of a series called ‘Talk India’. Given the fact that the earlier video was not dignified by even a comment from India, this was more placid compared to the other. Since the onset of the Doklam standoff, the Chinese media, as well as its officials, are engaged in a play of words in condemning India

Trade and the Skill Premium Puzzle with Capital Market Imperfections

An interesting puzzle is that trade liberalization in the 1980s and 1990s has been associated with a sharp increase in the skill premium in both developed and developing countries. This is in contrast with neoclassical theory, according to which trade should increase the relative return of the relatively abundant factor. We develop a simple model of trade with capital market imperfections, and show that trade can increase the skill premium in both the North and the South, and both in the short run as well as in the long run. We show that trade with a skill-intensive economy has two effects: it reduces the skilled wage, and thus discourages non talented agents out of the skilled labor force; and it reduces the cost of subsistence, thus allowing the talented offspring of unskilled workers to go to school. This compositional effect has a positive effect on the observed skill premium, possibly strong enough to counterweight the decrease in the skilled wage.Trade Liberalization, Skill Premium, Credit Market Frictions, Latin America

An economic theory of foreign interventions and regime change

I construct a theory of foreign interventions in which a home country's main trade partner may influence the course of regime change. The foreign country intervenes in support of the group that draws the largest gains from trade, since such a group is willing to concede most in trade agreements. But interventions are more than offset by the domestic political system, which supports in power the group who concedes least (economic nationalism). I allow for geopolitical competition between the main trade partner and a second foreign country, as well as for domestic ideological preferences over the two, and look at how geopolitical competition interacts with the economic mechanism described above. My results help interpret some of the patterns of Western interventions in the 20th century, and the role of economic nationalism in regime change. Furthermore, they help explain why the Cold War strengthened the West's preference for incumbent elites, even when the oppositions did not have a strong communist ideology. I provide detailed historical evidence in favor of my arguments

An economic theory of foreign interventions and regime change

I construct a theory of foreign interventions in which a home country's main trade partner may influence the course of regime change. The foreign country intervenes in support of the group that draws the largest gains from trade, since such a group is willing to concede most in trade agreements. But interventions are more than offset by the domestic political system, which supports in power the group who concedes least (economic nationalism). I allow for geopolitical competition between the main trade partner and a second foreign country, as well as for domestic ideological preferences over the two, and look at how geopolitical competition interacts with the economic mechanism described above. My results help interpret some of the patterns of Western interventions in the 20th century, and the role of economic nationalism in regime change. Furthermore, they help explain why the Cold War strengthened the West's preference for incumbent elites, even when the oppositions did not have a strong communist ideology. I provide detailed historical evidence in favor of my arguments

Decolonization: the Role of Changing World Factor Endowments

European colonialism had two key economic aspects: the extraction of colonial wealth by colonizers, and the relevance of trade for colonial economies. I build a simple model of colonialism which puts these two elements at centre stage. By controlling policy in the colony, the colonizer can appropriate part of her wealth; the colony, however, can stage a successful revolution at a stochastic cost. I assume there is some exogenous, non-contractible policy gain from independence, so that the colonizer is forced to concede it when the cost of revolution is low. I incorporate this mechanism in a three-country, Heckscher-Ohlin model where countries (the colonizer, the colony and a third independent country) can decide whether to trade with each other, and the colonizer can threaten to stop trading with the colony if she rebels. Thus, the attractiveness of revolution and the sustainability of colonial power come to depend on the capacity of the colony to access international markets against the will of the colonizer which, in turn, depends on the distribution of world factor endowments. I present historical evidence in support of my theory. My results have important implications for the debate on the economic legacy of colonialism.Colonial extraction, trade, decolonization

Italian as a Heritage Language Spoken in the US

The present study focuses on Italian as a heritage language spoken in the US by individuals bilingual in Italian and English, exposed to both language since birth. The subjects of the study are the members of six family nuclei, for a total of seven children as heritage speakers of Italian and as input receivers, and 6 parents as native speakers of Standard Italian and as input providers, living in different cities in Wisconsin and Illinois. The study specifically investigates the following structures: a) Gender assignment and gender agreement between determiner, noun and adjective; b) Auxiliary selection in the Italian compound past tense passato prossimo; c) Presence of the contrast between passato prossimo and imperfetto in the same narrative; d) Preferred past tense forms; e) Production of direct objects in the form of clitic or as a full lexical noun; f) Clitic placement in the contexts of use with negative imperative and with modal verbs; and g) Different uses of piacere verb. Eight tasks were administered, divided between oral and written modalities, of which oral tasks are in the form of elicitation, of picture description, of sentence building based on pictures, and of semi-free speech. Written tasks are in the form of forced-choice acceptability, binary acceptability, Yes/No acceptability judgment, and multiple-choice selection task. The study aims to investigate possible differences and similarities between the heritage language and the language of origin, under the assumption of the heritage grammar as an independent linguistic system with its own set of rules. The findings suggest that the nature of the differences between the two systems doesn\u27t reside only in language performance, but also in language structure. Specifically, systematic differences between the two systems take place in grammatical adomains in which the source language displays degrees of variability and language specific properties. Therefore, these differences represent the heritage speakers’ attempt at regularizing language specific rules

Prediction of dry-cured ham weight loss and prospects of use in a pig breeding program

Large ham weight losses (WL) in dry-curing are undesired as they lead to a loss of marketable product and penalise the quality of the dry-cured ham. The availability of early predictions of WL may ease the adaptation of the dry-curing process to the characteristics of the thighs and increase the effectiveness of selective breeding in enhancing WL. Aims of this study were (i) to develop Bayesian and Random Forests (RFs) regression models for the prediction of ham WL during dry-curing using on-site infrared spectra of raw ham subcutaneous fat, carcass and raw ham traits as predictors and (ii) to estimate genetic parameters for WL and their predictions (P-WL). Visible-near infrared spectra were collected on the transversal section of the subcutaneous fat of raw hams. Carcass traits were carcass weight, carcass backfat depth, lean meat content and weight of raw hams. Raw ham traits included measures of ham subcutaneous fat depth and linear scores for round shape, subcutaneous fat thickness and marbling of the visible muscles of the thigh. Measures of WL were available for 1672 hams. The best prediction accuracies were those of a Bayesian regression model including the average spectrum, carcass and raw ham traits, with R2 values in validation of 0.46, 0.55 and 0.62, for WL at end of salting (23 days), resting (90 days) and curing (12 months), respectively. When WL at salting was used as an additional predictor of total WL, the R2 in validation was 0.67. Bayesian regressions were more accurate than RFs models in predicting all the investigated traits. Restricted maximum likelihood (REML) estimates of genetic parameters for WL and P-WL at the end of curing were estimated through a bivariate animal model including 1672 measures of WL and 8819 P-WL records. Results evidenced that the traits are heritable (h2 ± SE was 0.27 ± 0.04 for WL and 0.39 ± 0.04 for P-WL), and the additive genetic correlation is positive and high (ra = 0.88 ± 0.03). Prediction accuracy of ham WL is high enough to envisage a future use of prediction models in identifying batches of hams requiring an adaptation of the processing conditions to optimise results of the manufacturing process. The positive and high genetic correlation detected between WL and P-WL at the end of dry-curing, as well as the estimated heritability for P-WL, suggests that P-WL can be successfully used as an indicator trait of the measured WL in pig breeding programs

Growth, Import Dependence, and War

open2openBonfatti, Roberto; O'Rourke, Kevin Hjortshøj*Bonfatti, Roberto; O'Rourke, Kevin Hjortshø