South-North convergence from a new perspective

This North-South model of Schumpeterian endogenous growth combines a market, productivity and knowledge effect. A set of various convergent and divergent growth paths is derived that is much richer than in the literature so far. South-North convergence based on North-South technology diffusion through intermediate goods trade is guaranteed if the knowledge effect dominates the productivity effect. Moreover, a larger Southern market expands the area of convergence and can prevent divergence. Not only a larger Southern market size, but also a higher Southern steady state growth rate benefit the North so that convergence is desirable for both, the South and the North

The EU Decarbonisation Roadmap 2050: what way to walk?

We carry out a detailed CGE (Computable General Equilibrium) analysis of the EU Decarbonisation Roadmap 2050 on a macroeconomic and on a sectoral level. Herein, we study a Reference scenario that implements existing EU policies as well as 3 unilateral and 3 global climate action scenarios. We identify global climate action with international emissions trading and the full equalization of CO2 prices across all (EU) sectors as a reasonable policy option to avoid additional costs of the Decarbonisation Roadmap to a large extent. This policy option may include CDM (Clean Development Mechanism in the sense of ‘where’-flexibility) in an extended form if there are countries without emissions caps. Moreover, we identify diverse sectoral effects in terms of output, investment, emissions and international competitiveness. We conclude that the successful realization of the EU Decarbonisation Roadmap probably requires a wise and joint consideration of technology, policy design and sectoral aspects

The energy-bias of North-South technology spillovers - a global, bilateral, bisectoral trade analysis

We examine variations in the South-North ratios (emerging vs. industrialized countries) of energy and labor intensities driven by imports. We use the novel World Input-Output Database (WIOD) that provides bilateral and bisectoral data for 40 countries and 35 sectors for 1995-2009. We find South-North convergence of energy and labor intensities, an energy bias of import-driven convergence and no robust difference between imports of intermediate and investment goods. Accordingly, trade helps emerging economies follow a ’green growth’ path, and trade-related policies can enhance this path. However, the effects are economically small and require a long time horizon to become effective. Trade-related policies can become much more effective in selected countries and sectors: China attenuates labor intensity via imports of intermediate goods above average. Brazil reduces energy intensity via imports of intermediate and investment goods above average. Production of machinery as an importing sector in emerging countries can immoderately benefit from trade-related reductions in factor intensities. Electrical equipment as a traded good particularly decreases energy intensity. Machinery particularly dilutes labor intensity. Our main results are statistically highly significant and robust across specifications

Can smart policies solve the sand mining problem?

While sand has become a scarce essential resource for construction and land reclamation worldwide, its extraction causes severe ecological damage and high social costs. To derive policy solutions to this paramount global challenge with broad applicability, this model-based analysis exemplarily studies sand trade from Southeast Asia to Singapore. Accordingly, a coordinated transboundary sand output tax reduces sand mining to a large extent, while the economic costs are small for the sand importer and slightly positive for the exporters. As a novel policy implementation approach, a “Sand Extraction Allowances Trading Scheme” is proposed, which helps sustainably balance the importer’s economic growth with the exporters’ economic development. Copyright: © 2021 Hübler, Pothen. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited

The optimal tariff in the presence of trade-induced productivity gains

We scrutinize the impact of international productivity gains (spillovers) induced by imports and exports on optimal tariffs. First, we solve a stylized 2x2 trade model of a large open economy and show that (a) productivity gains via exports and imports both reduce the strategically optimal tariff, (b) there exists a certain strength of productivity gains such that the incentive to manipulate the terms of trade strategically vanishes, (c) the welfare gain that can be achieved via a tariff is lower in the presence of productivity gains than in their absence, and (d) these results even hold without power on international markets. Second, we apply this model to a panel data set covering 40 countries, 29 sectors and the years 1995 to 2009. We find that importdriven productivity gains are stronger than export-driven productivity gains. Third, we extend our 2x2 model to a multi-region, multi-sector model that we calibrate to the data set used in the econometric analysis and to the econometrically estimated productivity gains. Optimal tariffs are reduced by 17% for the US and China and 40% for Brazil when taking trade-induced productivity gains into account. The USA are the only model region that gains from European optimal tariff policy. Thus, trade-induced productivity gains have empirically relevant effects on optimal tariffs

Which indicators of absorptive capacity enhance import-induced South-North convergence in labor intensities?

We hypothesize that North-South trade is associated with knowledge spillovers that create labor productivity gains depending on various determinants of Southern absorptive capacity. We use the novel World Input-Output Database (WIOD) that provides bilateral and bisectoral panel data for 39 countries and 35 sectors for 1995-2009. We examine growth in relative South-North labor intensities (South-North convergence) for 31 industrialized source and eight emerging recipient countries. We find robust evidence that the following measures of absorptive capacity (ordered by magnitude of the estimated coefficients) interact with imports so that relative labor intensity is reduced: economic freedom and political and civil rights, services, skills, scientific publications and patents as well as telephone and internet access. GMM and GLS estimations corroborate the results. Policies that support various of the identified determinants of absorptive capacity are more promising than policies that select only one. Elevating the absorptive capacity of emerging economies to the maximum level in the world would halve the South-North gap in labor intensities within a couple of decades if it were solely achieved through the trade channel

Simplified surgical-hybrid Melody® valve implantation for paediatric mitral valve disease

Children suffering from left atrioventricular valve (LAVV) disease not amenable to repair represent a significant challenge. The results of surgical reconstruction are not optimal. Valve replacement as an alternative is associated with poor results. The surgical-hybrid approach with implantation of a stented biological valve (bovine jugular vein graft, Melody® valve) seems to represent a new therapeutic option. Here we demonstrate our case, the consideration and the approach to extreme clinical findings in a small child. We describe a simplified surgical-hybrid Melody valve implantation in a LAVV position. The technique of implantation is relatively simple and the immediate postoperative result very goo

Second-best analysis of European energy policy : is one bird in the hand worth two in the bush?

This paper studies policy instruments that correct insufficient learning-by-doing(LbD) and research and development (R&D) of renewable electricity technologies and insufficient investments in energy efficiency (EE) in the presence of carbon pricing. The theoretical model analysis shows how to re-adjust the first-best in second-best situations, in which one of the policy instruments is restricted. Calibrated to the European power sector, the first-best choice of all instruments reduces the climate policy cost by one third. Feed-in tariffs turn out to be good substitutes for LbD, but not for R&D or EE subsidies

The Effects of International Trade on Structural Convergence and CO2 Emissions

This article introduces a new econometric model that includes an innovative measure of intersectoral structural change. This model describes the structural convergence (or divergence) of sector share patterns across countries (from the North-South or global perspective) influenced by international trade. The econometric analysis applies panel data estimators with different types of fixed effects to the 2013 and 2016 releases of the World Input-Output Database, covering the periods 1995–2009 and 2000–2014. The results show that international trade mostly promotes structural convergence, which is enhanced by sectoral capital intensities. It seems, however, that in this millennium, structural divergence, also fostered by international trade, occurred in terms of the CO2 intensity of production. © 2022, The Author(s)

Designing an emissions trading scheme for China - an up‐to‐date climate policy assessment

We assess recent Chinese climate policy proposals in a multi‐region, multi‐sector computable general equilibrium model with a Chinese carbon emissions trading scheme (ETS). When the emissions intensity per GDP in 2020 is required to be 45% lower than in 2005, the model simulations indicate that the climate policy‐ induced welfare loss in 2020, measured as the level of GDP and welfare in 2020 under climate policy relative to their level under business‐as‐usual (BAU) in the same year, is about 1%. The Chinese welfare loss in 2020 slightly increases in the Chinese rate of economic growth in 2020. When keeping the emissions target fixed at the 2020 level after 2020 in absolute terms, the welfare loss will reach about 2% in 2030. If China’s annual economic growth rate is 0.5 percentage points higher (lower), the climate policy‐induced welfare loss in 2030 will rise (decline) by about 0.5 percentage points. Full auctioning of carbon allowances results in very similar macroeconomic effects as free allocation, but full auctioning leads to higher reductions in output than free allocation for ETS sectors. Linking the Chinese to the European ETS and restricting the transfer volume to one third of the EU’s reduction effort creates at best a small benefit for China, yet with smaller sectoral output reductions than auctioning. These results highlight the importance of designing the Chinese ETS wisely