Heckscher-Ohlin Theory when Countries have Different Technologies

Rethinking the foundations of Heckscher-Ohlin theory when countries have different technologies, this paper shows how to make the proper adjustments for international productivity differences. The central tool is a factor conversion matrix that computes the local factor content of foreign Rybczynski effects. Factor-specific productivities are a special case of these more general linear relationships.

Funded Pensions, Labor Market Participation, and Economic Growth.

This paper analyses a model of overlapping generations in which agents who do not participate in th elabor market are unable to borrow. Thus an increase in a fully funded pension raises aggregate savings even with a fixed participation rate since private savings are not crowded out one-for-one. When labor force participation is determined endogenously, a rise in the level of fully funded pensions increases the aggregate labor supply. This in turn increases aggregate savings and growth, directly by raising per capita savings and indirectly through tax and interest rate effects.

THE DYNAMIC EFFECTS OF AGRICULTURAL SUBSIDY PROGRAMS IN THE UNITED STATES

This paper analyzes the dynamic effects of the acreage restrictions and land diversion requirements that are characteristic of the farm subsidy programs in the United States. The subsidy payments a farmer receives are based upon historical base acreage, and it 1s sometimes optimal for a farmer not to participate in a pr9gr~m in order to increase base acreage in anticipation of higher future subsidies. This paper determines the farmer's optimal policy as the solution to a deterministic dynamic program. It shows that farmers with low base acreage typically opt out of these programs, whereas those with high base acreage participate in them. The paper concludes with an examination of aggregate data from the programs involving barley, corn, cotton, oats, rice, sorghum, and wheat during 1987. It shows that these programs actually increase the aggregate output of each of these crops and that they represent an annual deadweight loss of more than $3 billion.Crop Production/Industries, Land Economics/Use,

THE DYNAMIC EFFECTS OF AGRICULTURAL SUBSIDIES IN THE UNITED STATES

This article analyzes the dynamics effects of the farm subsidies in the United States. The subsidies a farmer receives are based upon historical plantings, also called based acreage. It is sometimes optimal for a farmer temporarily not to participate in a program in order to increase future subsidies. The farmerÂ’'s optimal policy is the solution to a deterministic dynamic program. Farmers with low base acreage opt out of these programs, whereas those with high base acreage participate in them. The article examines aggregate data involving corn, cotton, rice, and wheat during 1987. It shows that these programs increase the output of each of these crops and represent an annual deadweight loss of more than $2 billion.Agricultural and Food Policy,

Which Sectors of a Modern Economy are most Central?

We analyze input-output matrices for a wide set of countries as weighted directed networks. These graphs contain only 47 nodes, but they are almost fully connected and many have nodes with strong self-loops. We apply two measures: random walk centrality and one based on count-betweenness. Our findings are intuitive. For example, in Luxembourg the most central sector is “Finance and Insurance” and the analog in Germany is “Wholesale and Retail Trade” or “Motor Vehicles”, according to the measure. Rankings of sectoral centrality vary by country. Some sectors are often highly central, while others never are. Hierarchical clustering reveals geographical proximity and similar development status.