Short and Long Run Decomposition of OECD Wage Inequality Changes

This paper focuses on the decomposition of increased wage inequality in OECD countries into the component factors of trade surges in low wage products and technological change. It argues that if the observed wage inequality response to price and technology shocks represents a short run response in which factors and output have not adjusted fully across industries, then decomposition analysis is substantially altered relative to a long-run factors mobile world. This applies either when one type of labour has mobility costs or where there is an additional, sectorally immobile factor. Only small departures from the fully mobile model can greatly change decompositions. Previous general equilibrium based studies have assumed a long-run full mobility response, when this may not be the case, and may consequently have drawn incorrect conclusions.Trade, wages, technology, inequality.

Short and Long Run Decompositions of OECD Wage Inequality Changes

This paper focuses on the causes of increased wage inequality in OECD countries in recent years and its decomposition into the component factors of trade surges in low wage products and technological change that has preoccupied the trade and wages literature. It argues that the length of production run and degree of fixity of factors is crucial in such analyses. In particular, if the observed wage inequality response to price and technology shocks reflects a short-run response in which factors and output have not adjustedfully across industries, then decomposition analysis of the causes of the observed increases in inequality is substantially altered relative to a long-run factors mobile world. This conclusion applies both when one type of labour has mobility costs and in the Ricardo-Viner case where there is an additional, sectorally immobile factor. Furthermore, only small departures from the fully mobile model can greatly change decompositions. This finding is important because most data used in earlier work are interpreted as reflective of a long-run full mobility response, when this may not be the case. Incorrect conclusions as to how trade surges and technology contribute to wage inequality can be easily drawn, if the data are in fact generated by a short-run adjustment process.

Carbon Abatement and its international effects in Europe including effects on other pollutants: a general equilibrium approach

This paper outlines the development of a CGE model as a tool for analysing many of the issues relating to the introduction of environmental taxation, such as interaction with other taxes, revenue recycling, international carbon 'leakage' and tax export effects. The model is linked to IIASA's RAINS model to expand the analysis to cover other cross-boundary pollution. Analysis of a 30 ECU per tonne carbon tax applied in Germany, the UK and the rest of the European Union indicate that it could achieve savings of the order of 20 per cent in carbon emissions compared to business as usual, at little economic cost to the EU countries. The emission savings may be slightly higher in Germany and lower in the UK than the rest of the EU, while the latter would also gain more from terms of trade effects. The tax would bring substantial savings in sulphur emissions. Alternatively, if emissions were allowed to stay constant, the saving on abatement technology would mean a modest improvement in the net cost of the tax. Effects on Nitrogen emissions are smaller.

The Allocation of Carbon Permits within One Country : A General Equilibrium Analysis of the United Kingdom

As part of the Kyoto agreement on limiting carbon emissions, from 2008 onwards an international market in auction able carbon permits will be established. This raises the issue of whether trading should be simply between governments or between companies, or in the latter case how such permits should be allocated. Our paper uses the British section of a CGE model of the European energy sectors to evaluate the economics of various methods of allocating permits within a country, as discussed in Lord Marshall’s recent report to the British government. The option of allocation entirely by auction is similar to the setting of a carbon tax, and the recycling of revenues to reduce or offset other economic distortions could produce a potential net benefit to incomes and employment. 'Grandfathering' some of the permits free to large firms, according to their base year carbon emissions, would mean loss of the benefits of recycling auction revenues. This might be exacerbated if it created windfall profits repatriated by foreign shareholders. The third major alternative is to review the allocation regularly, awarding permits to all firms according to a ‘benchmark’ allocation, based on 'best practice' as estimated by outside experts. This would be similar in practice to recycling the revenue as an output subsidy to the industry, though it could be complicated to implement. Such a system could allow much of the potential ‘double dividend’ to be realized, though it might still be preferable to auction permits, with the revenues used to offset taxes across a wider spread of industry

Short and long run decompositions of OECD wage inequality changes

This paper focuses on the causes of increased wage inequality in OECD countries in recent years and its decomposition into the component factors of trade surges in low wage products and technological change that has preoccupied the trade and wages literature. It .argues that the length of production run and degree of fixity of factors is crucial in such analyses. In particular, if the observed wage inequality response to price and technology shocks reflects a short-run response in which factors and output have not adjusted fully across industries, then decomposition analysis of the causes of the observed increases in inequality is substantially altered relative to a long-run factors mobile world. This conclusion applies both when one type of labour has mobility costs and in the Ricardo-Viner case where there is an additional, sectorally immobile factor. Furthermore, only small departures from the fully mobile model can greatly change decompositions. This finding is important because most data used in earlier work are interpreted as reflective of a long-run full mobility response, when this may not be the case. Incorrect conclusions as to how trade surges and technology contribute to wage inequality can be easily drawn, if the data are in fact generated by a short-run adjustment process

Boundness and stability of differential equations

This paper discusses the qualitative behaviour of solutions to difference equations, focusing on boundedness and stability of solutions. Examples demonstrate how the use of Lipschintz constants can provide insights into the qualitative behaviour of solutions to some nonlinear problems.Manchester Centre for Computational Mathematic

The allocation of carbon permits in one country: a general equilibrium analysis of the United Kingdom

As part of the Kyoto agreement on limiting carbon emissions, from 2008 onwards an international market in auctionable carbon permits will be established. This raises the issue of whether trading should be simply between governments or between companies, or in the latter case how such permits should be allocated. Our paper uses the British section of a CGE model of the European energy sectors to evaluate the economics of various methods of allocating permits within a country, as discussed in Lord Marshall’s recent report to the British government. The option of allocation entirely by auction is similar to the setting of a carbon tax, and the recycling of revenues to reduce or offset other economic distortions could produce a potential net benefit to incomes and employment. 'Grandfathering' some of the permits free to large firms, according to their base year carbon emissions, would mean loss of the benefits of recycling auction revenues. This might be exacerbated if it created windfall profits repatriated by foreign shareholders. The third major alternative is to review the allocation regularly, awarding permits to all firms according to a ‘benchmark’ allocation, based on 'best practice' as estimated by outside experts. This would be similar in practice to recycling the revenue as an output subsidy to the industry, though it could be complicated to implement. Such a system could allow much of the potential ‘double dividend’ to be realised, though it might still be preferable to auction permits, with the revenues used to offset taxes across a wider spread of industry

On the Universality of Mesoscience: Science of 'the in-between'

The universality of mesoscales, ranging between elemental particles and the universe, is discussed here by reviewing widely disparate fields and presenting four cases, at differing hierarchical levels, from chemistry, chemical engineering, meteorology, through to astronomy. An underpinning concept, "Compromise in competition", is highlighted between various dominant, but competing mechanisms, and is identified here to be the universal origin of complexity and diversity in such examples. We therefore advance this as a key underlying principle of an emerging science -- Mesoscience.Comment: 8 pages, 1 figur

The numerical solution of linear multi-term fractional differential equations: Systems of equations

This is a PDF version of a preprint submitted to Elsevier. The definitive version was published in the Journal of computational and applied mathematics and is available at www.elsevier.comThis article discusses how the numerical approximation of a linear multi-term fractional differential equation can be calculated by the reduction of the problem to a system of ordinary and fractional differential equations each of order at most unity.This article was submitted to the RAE2008 for the University of Chester - Applied Mathematics

Examining a Habitat-Weather Threshold for Northern Bobwhite Populations in the Southwestern United States

In semiarid portions of the northern bobwhite (Colinus virginianus; hereafter, bobwhite) geographic distribution, weather is a strong driver of interannual abundance. However, the strength of this relationship may depend on habitat amount. Given this habitat–weather dependence, there is likely to be a threshold value for habitat that determines how strongly a bobwhite population responds to weather. Our objective was to evaluate the relationship between habitat amount and the relative influence of weather on bobwhite abundance in Texas and Oklahoma, USA and determine a potential land-cover threshold value. We collected bobwhite abundance and land-cover data from the Breeding Bird Survey and National Land Cover Database, respectively, for 2 time periods which corresponded to historical lows (2012–2013) and highs (2015–2016) of bobwhite abundance within this region. We reclassified land cover into grassland, shrubland, pastureland, cropland, forest, and urban cover, and combined grassland and shrubland categories to represent bobwhite habitat. We used weighted linear regression to model the difference between mean bobwhite abundance between each time period as a function of habitat amount, hypothesizing a positive, linear relationship given the theorized greater influence of weather on populations within higher habitat amounts. To evaluate a potential habitat threshold, we modeled mean bobwhite abundance, for each time period, and all individual land-cover variables using a generalized additive model with a negative binomial distribution. We detected a positive, linear relationship between habitat amount and the difference between high and low bobwhite populations (r2 = 0.30), per our hypothesis. Models of land-cover variables differed between low- and high-abundance time periods. The time period of lower abundance (2012–2013) model included all land-cover variables except cropland and showed significant positive, linear relationships with grass and hay cover, and negative, linear relationships with forest and urban cover. Shrubland cover was the only nonlinear term, increasing to approximately 50–60% cover, then decreasing sharply with increasing cover. Deviance explained for this model was 41.2%. For the period of high abundance (2015–2016) the model explained approximately 25% of the deviance and was reduced to only negative, linear relationships with forest and urban cover. Our results provide some evidence toward the habitat–weather threshold hypothesis. Additionally, while no land-cover values showed a threshold-like relationship with bobwhite abundance, we did document differences in variable selection for each time period. Stressors on bobwhite habitat seem to have a more dramatic impact on bobwhite populations than available habitat, especially in periods of higher abundance, whereas periods of lower abundance also included habitat variables