Do Developed and Developing Countries Compete Head to Head in High Tech?

Concerns that (1) growth in developing countries could worsen the US terms of trade and (2) that increased US trade with developing countries will increase US wage inequality both implicitly reflect the assumption that goods produced in the United States and developing countries are close substitutes and that specialization is incomplete. In this paper we show on the contrary that there are distinctive patterns of international specialization and that developed and developing countries export fundamentally different products, especially those classified as high tech. Judged by export shares, the United States and developing countries specialize in quite different product categories that, for the most part, do not overlap. Moreover, even when exports are classified in the same category, there are large and systematic differences in unit values that suggest the products made by developed and developing countries are not very close substitutes-developed country products are far more sophisticated. This generalization is already recognized in the literature but it does not hold for all types of products. Export unit values of developed and developing countries of primary commodity-intensive products are typically quite similar. Unit values of standardized (low-tech) manufactured products exported by developed and developing countries are somewhat similar. By contrast, the medium- and high-tech manufactured exports of developed and developing countries differ greatly. This finding has important implications. While measures of across product specialization suggest China and other Asian economies have been moving into high-tech exports, the within-product unit value measures indicate they are doing so in the least sophisticated market segments and the gap in unit values between their exports and those of developed countries has not narrowed over time. These findings shed light on the paradoxical finding, exemplified by computers and electronics, that US-manufactured imports from developing countries are concentrated in US industries, which employ relatively high shares of skilled American workers. They help explain why America’s nonoil terms of trade have improved and suggest that recently declining relative import prices from developing countries may not produced significant wage inequality in the United States. Finally they suggest that inferring competitive trends based on trade balances in products classified as "high tech" or "advanced" can be highly misleading.Terms of Trade, Technology

US Trade and Wages: The Misleading Implications of Conventional Trade Theory

Conventional trade theory, which combines the Heckscher-Ohlin theory and the Stolper-Samuelson theorem, implies that expanded trade between developed and developing countries will increase wage equality in the former. This theory is widely applied. It serves as the basis for estimating the impact of trade on wages using two-sector simulation models and the net factor content of trade. It leads naturally to the presumption that the rapid growth and declining relative prices of US manufactured imports from developing countries since the 1990s have been a powerful source of increased US wage inequality. In this study we present evidence that suggests the presumption is not warranted. We highlight the sensitivity of conventional theory to the assumption of incomplete specialization and find evidence that is not consistent with it. Since 1987, although US domestic relative effective prices in industries with relatively high shares of manufactured goods imports from developing countries have declined, effective unskilled worker-weighted prices have actually risen relative to skilled worker-weighted prices. If anything, this suggests pressures for increased wage equality. Also in apparent contradiction to theory, the (six-digit North American Industry Classification System [NAICS]) US manufacturing industries with high shares of manufactured imports from developing countries are actually more skill intensive than the industries with high shares of imports from developed countries. Finally, applying a two-stage regression procedure, we find that developing-country import price changes have not mandated increased US wage inequality. While these results conflict with standard theory, they are easily explained if the United States and developing countries have specialized in products and tasks that are highly imperfect substitutes. If this is the case, the impact of increased trade with developing countries on US wage inequality is far more muted than standard theory suggests. Also methodologies such as the net factor content of trade using US production coefficients and simulation models assuming perfect substitution between imports and domestic products could be highly misleading.Wages, Trade Theory

Potential for Abrupt Changes in Atmospheric Methane

Methane (CH4) is the second most important greenhouse gas that humans directly influence, carbon dioxide (CO2) being first. Concerns about methane’s role in abrupt climate change stem primarily from (1) the large quantities of methane stored as solid methane hydrate on the sea floor and to a lesser degree in terrestrial sediments, and the possibility that these reservoirs could become unstable in the face of future global warming, and (2) the possibility of large-scale conversion of frozen soil in the high- latitude Northern Hemisphere to methane producing wetland, due to accelerated warming at high latitudes. This chapter summarizes the current state of knowledge about these reservoirs and their potential for forcing abrupt climate change

Models of extended hadrons

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Admissible predictive density estimation

Let $X|\mu\sim N_p(\mu,v_xI)$ and $Y|\mu\sim N_p(\mu,v_yI)$ be independent $p$-dimensional multivariate normal vectors with common unknown mean $\mu$. Based on observing $X=x$, we consider the problem of estimating the true predictive density $p(y|\mu)$ of $Y$ under expected Kullback--Leibler loss. Our focus here is the characterization of admissible procedures for this problem. We show that the class of all generalized Bayes rules is a complete class, and that the easily interpretable conditions of Brown and Hwang [Statistical Decision Theory and Related Topics (1982) III 205--230] are sufficient for a formal Bayes rule to be admissible.Comment: Published in at http://dx.doi.org/10.1214/07-AOS506 the Annals of Statistics (http://www.imstat.org/aos/) by the Institute of Mathematical Statistics (http://www.imstat.org

\u27In This Dark Hour\u27: Stefan Zweig and Historical Displacement in Brazil, 1941-1942

Stefan Zweig was an Austrian-Jewish author and intellectual who fled Austro-fascism and Nazi Germany, and took his own life in Brazil in early 1942. The resurgence of interest in Zweig’s life in the last few decades has introduced new methods of interpretation of his life as a refugee. But many scholars have not acknowledged Zweig’s relationships he formed with South American intellectuals while in exile there. Instead, the primary focus has been on his identity as a European, and his subsequent suicide. This paper will argue that Zweig’s identity as a refugee included a radical re-interpretation of history and perspective of the world outside of Europe, which had been previously based upon nationalistic and Euro-centric interpretations. Zweig’s exile was one of not only spatial displacement, but was also one of historical displacement, and the physical and political realities in Brazil contributed to this aspect of his life as a refugee

\u27In This Dark Hour\u27: Stefan Zweig and Historical Displacement in Brazil, 1941-1942

Stefan Zweig was an Austrian-Jewish author and intellectual who fled Austro-fascism and Nazi Germany, and took his own life in Brazil in early 1942. The resurgence of interest in Zweig’s life in the last few decades has introduced new methods of interpretation of his life as a refugee. But many scholars have not acknowledged Zweig’s relationships he formed with South American intellectuals while in exile there. Instead, the primary focus has been on his identity as a European, and his subsequent suicide. This paper will argue that Zweig’s identity as a refugee included a radical re-interpretation of history and perspective of the world outside of Europe, which had been previously based upon nationalistic and Euro-centric interpretations. Zweig’s exile was one of not only spatial displacement, but was also one of historical displacement, and the physical and political realities in Brazil contributed to this aspect of his life as a refugee