Trade Openness, Gains from Variety and Government Spending

This paper investigates empirically the effect of import diversity on government size and provides evidence for the love of variety effect on government spending described in Hanslin (2008). I argue that crowding out of firms is an important cost of public good provision. However, due to the access to foreign varieties, national costs of public good provision are lower and therefore, public good provision is higher. Especially for OECD countries this channel seems to exist. The diversity of imported products has a positive effect on government consumption, particularly when these goods are classified as differentiated. In addition, this positive effect is decreasing in home market size. Further, the direct effect of the share of differentiated in total imported products on the government share is negative.education, schooling, Switzerland

The Apple Falls Increasingly Far: Parent-Child Correlation in Schooling and the Growth of Post-Secondary Education in Switzerland

In this paper, we analyze the completed highest education degree of two birth cohorts (1934-1943 and 1964-1973) in Switzerland, using data from the 1999 wave of the Swiss Household Panel. As expected, the fraction of tertiary graduates has increased over time, for women more so than for men. Also, the educational attainment depends strongly on the educational attainment of parents. We then decompose the overall trend into a parental background effect, a general expansion effect and a distribution effect. For women in particular, we find that a substantial fraction of the overall increase in participation in tertiary education can be explained by the fact that the gap in participation rates between women with lowly educated parents and women with highly educated parents has narrowed. We then investigate the role of financial constraints in explaining these trends. Although the number of individuals suffering financial hardship during youth has declined over time, logit models show that financial problems have become more important as an impediment for higher education.education, schooling, Switzerland

The effect of trade openness on optimal government size under endogenous firm entry

This paper analyzes the effect of trade liberalization on government spending in a general equilibrium model with a continuum of industries supplying tradable and nontradable goods under monopolistic competition. Trade liberalization is modeled as the opening up of product markets between two countries, which may differ in total factor productivity, factor endowment and fix cost technology. In this setup, I show that the optimal provision of a public consumption good depends positively on the degree of openness. Moreover, the richer and more productive country chooses a lower optimal government share

The apple falls increasingly far: Parent-child correlation in schooling and the growth of post-secondary education in Switzerland

In this paper, we analyze the completed highest education degree of two birth cohorts (1934-1943 and 1964-1973) in Switzerland, using data from the 1999 wave of the Swiss Household Panel. As expected, the fraction of tertiary graduates has increased over time, for women more so than for men. Also, the educational attainment depends strongly on the educational attainment of parents. We then decompose the overall trend into a parental background effect, a general expansion effect and a distribution effect. For women in particular, we find that a substantial fraction of the overall increase in participation in tertiary education can be explained by the fact that the gap in participation rates between women with lowly educated parents and women with highly educated parents has narrowed. We then investigate the role of financial constraints in explaining these trends. Although the number of individuals suffering financial hardship during youth has declined over time, logit models show that financial problems have become more important as an impediment for higher education

Foreign PMIs: A reliable indicator for Swiss exports

Foreign economic activity is a major determinant of export development. This paper presents an indicator for now- and forecasting exports, which is based on survey data that captures foreign economic performance. We construct an indicator by weighting foreign PMIs of Switzerland's main trading partners with their export shares and compare its forecasting performance with alternative indicators. The paper shows that the indicator based on foreign PMIs is strongly correlated with exports (total as well as goods exports). In an out-of-sample forecast comparison we employ standard ARDL models as well as MIDAS models to forecast different definitions of exports. We document that our export indicator outperforms many other previously used indicators for forecasting exports and an univariate benchmark. As manufacturing is an important pillar of the Swiss economy and is highly export intensive, improving export forecasts is also beneficial for forecasting Swiss GDP

A Dynamic North-South Model of Demand-Induced Product Cycles

This paper presents a dynamic North-South general equilibrium model with non- homothetic preferences. Innovation takes place in the rich North while firms in the poor South at random imitate products manufactured in the North. The model is able to generate endogenous product cycles as described by Vernon (1966) where the different stages of the product cycle are not only determined by supply side factors but also by the distribution of income between North and South. We simulate comparative statics results of changes in Southern labor productivity, changes in inequality across regions, and changes in the savings rate. We further provide suggestive evidence for the product cycle stages

Frost Tolerance, Deacclimation and Reacclimation Traits in Perennial Ryegrass

The ability of perennial grasses to harden and maintain frost tolerance throughout the winter is crucial for winter survival. This includes the ability to resist deacclimation during transient mild spells in winter, and the ability to reacclimate when cold temperatures return. The latter traits are especially critical in regions with cycles of freezing and thawing, and lack of a stable, insulating snowcover that can protect the plants from extreme air temperatures. Such conditions are typical for many coastal areas in Northern Eurasia and America, such as the southwestern coast of Norway. The climate is changing and one of the consequences for Norway will be milder winter temperatures. This might open up for increased use of perennial ryegrass (Lolium perenne L.) in Scandinavian forage grass production systems at the expense of timothy (Phleum pratense L.), the most commonly used forage grass today. However, there are still important questions about the winter survival of perennial ryegrass under future climate conditions that needs to be addressed before a wider use of this grass species can be recommended. One is related to the risk of frost injury connected with more fluctuating temperatures at plant level in winter and spring. Thus, simulation studies using a grassland model parameterized for current winter-hardy cultivars of perennial ryegrass indicated an increased risk of frost injury in winter and spring in many areas of North Europe including Norway (Höglind et al., 2013). The increased risk was associated with a reduced snow cover, and earlier onset of spring growth followed by frosts. The simulation results indicate that cultivars that can resist deacclimation and/or that can reacclimate to a substantial degree will be needed for successful grass production under the projected future climate conditions. However, more information is needed about the genetic variation with respect to deacclimation resistance and reacclimation capacity. The aim of the present work was to compare three cultivars of perennial ryegrass with respect to their resistance to dehardening and ability to reharden under fluctuating winter temperatures. The plants differed widely with respect geo-climatic origin. Plants were first hardened under controlled conditions, and then subjected to a period of mild temperatures followed by decrease to pre-dehardening temperatures. Frost tolerance was estimated by freezing tests after completed hardening, twice during the mild episode and twice after the return to pre-hardening conditions. Our hypothesis was that the deacclimation and reacclimation characteristics would differ largely between the cultivars given their contrasting geo-climatic origin

A Dynamic North-South Model of Demand-Induced Product Cycles

This paper presents a dynamic North-South general-equilibrium model where households have non-homothetic preferences. Innovation takes place in a rich North while norms in a poor South imitate products manufactured in North. Introducing non-homothetic preferences delivers a complete international product cycle as described by Vernon (1966), where the different stages of the product cycle are not only determined by supply side factors but also by the distribution of income between North and South. We ask how changes in Southern labor productivity, South's population size and inequality across regions affects the international product cycle. In line with presented stylized facts about the product cycle we predict a negative correlation between adoption time and per capita incomes