Unemployment in an Interdependent World

We introduce search and matching unemployment into a model of trade with differentiated goods and heterogeneous firms. Countries may differ with respect to size, geographical location, and labor market institutions. Contrary to the literature, our single-sector perspective pays special attention to the role of income effects and shows that bad institutions in one country worsen labor market outcomes not only in that country but also in its trading partners. This spill-over effect is conditioned by trade costs and country size: smaller and/or more centrally located nations suffer less from inefficient policies at home and are more heavily affected from spill-overs abroad than larger and/or peripheral ones. We offer empirical evidence for a panel of 20 rich OECD countries. Carefully controlling for institutional features and for business cycle comovements between countries, we confirm our qualitative theoretical predictions. However, the magnitude of spill-over effects is larger in the data than in the theoretical model. We show that introducing real wage rigidity can remedy this problem.spill-over effects of labor market institutions, unemployment, international trade, search frictions, heterogeneous firms

Optimal Tariffs, Retaliation and the Welfare Loss from Tariff Wars in the Melitz Model

This paper characterizes analytically the optimal tariff of a large one-sector economy with monopolistic competition and firm heterogeneity in general equilibrium, thereby extending the small-country results of Demidova and Rodriguez-Clare (JIE, 2009) and the homogeneous firms framework of Gros (JIE, 1987). The optimal tariff internalizes a markup distortion and a terms of trade externality. It is larger the higher the dispersion of firm-level productivities, and the bigger the country's relative size or relative average productivity. Furthermore, in the two-country Nash equilibrium, tariffs turn out to be strategic substitutes. Small or poor economies set lower Nash tariffs than large or rich ones. Lower transportation costs or smaller fixed market entry costs induce higher equilibrium tariffs and larger welfare losses relative to the case of zero tariffs. Similarly, cross-country productivity or size convergence increases the global welfare loss due to non-cooperative tariff policies. These results suggest that post WWII trends have increased the relative merits of the WTO.optimal tariffs, retaliation, tariff wars, heterogeneous firms, World Trade Organization, Nash equilibrium

The Shimer-Puzzle of International Trade: A Quantitative Analysis

Recent theoretical literature studies how labor market reforms in one country can affect labor market outcomes in other countries, thereby rationalizing widely-held policy beliefs and empirical evidence. But what is the quantitative relevance of such spillover effects? This paper combines two recent workhorse models: the canonical search-and-matchingframework and the heterogeneous firms international trade model. Qualitatively, the framework confirms that labor market reforms in one country benefit its trading partners, replicating the stylized facts. However, when wages are bargained flexibly, the model quantitatively underestimates the correlation of structural unemployment rates across countries. This mirrors the well-known finding by Shimer (2005) by which thestandard search-and-matching model predicts too small fluctuations of unemployment rates over time. Introducing real wage rigidity remedies this problem

Transatlantische Handels- und Investitionspartnerschaft: Welche Effekte sind zu erwarten?

Mitte Juni 2013 wollen die USA und die Europäische Union Verhandlungen über ein Freihandelsabkommen aufnehmen. Gabriel Felbermayr, Ludwig-Maximilians-Universität München und ifo Institut, und Mario Larch, Universität Bayreuth, betonen, dass jedes Abkommen, das Wachstums- und Beschäftigungswirkung haben soll, über die Abschaffung der Zölle hinausgehen muss. Besonders die sogenannten nicht-tarifären Handelsbarrieren, deren Abbau vor allem dem Mittelstand zugutekomme, müssten entschärft werden. Es sei auch durchaus wahrscheinlich, dass das transatlantische Abkommen Bewegung in die festgefahrene Doha-Runde bringen könnte, denn ein Durchbruch bei multilateralen Verhandlungen habe oftmals im Gefolge bilateraler Abkommen stattgefunden. Berend Diekmann, Bundesministerium für Wirtschaft und Technologie, unterstreicht die aufgrund der Größe der beteiligten Wirtschaftsräume hohe Relevanz des transatlantischen Partnerschaftsabkommens für Wohlfahrt, Wachstum und Beschäftigung. Nicht zu unterschätzen sei auch das Wachstumspotenzial, das aus einer besseren Durchsetzung gemeinsam von der EU und den USA weiterentwickelter Prinzipien etwa im Bereich der Wettbewerbs-, Arbeits- oder Umweltpolitik weltweit entstehen könnte. Rolf J. Langhammer, Institut für Weltwirtschaft, Kiel, steht einem Freihandelsabkommen zwischen den USA und der EU skeptisch gegenüber. Der Einstieg in eine solche Vereinbarung sei nicht nur »der Sargnagel für die Doha-Runde«, sondern auch gleichbedeutend mit einem endgültigen Ansehensverlust der WTO und eine weitere Degradierung von »global governance«. Klar sei nur, dass über Jahre wertvolle Verhandlungsressourcen im multilateralen Bereich verschwendet wurden

Cellular Models of Aggregation-Dependent Template-Directed Proteolysis to Characterize Tau Aggregation Inhibitors for Treatment of Alzheimer's Disease

Copyright © 2015, The American Society for Biochemistry and Molecular Biology. Acknowledgements-We thank Drs Timo Rager and Rolf Hilfiker (Solvias, Switzerland) for polymorph analyses.Peer reviewedPublisher PD

The structure of the German economy

Exploiting the information contained in an economys input-output matrix and using the novel approach developed by Fisher and Marshall (2011), we calculate Rybczynski effects and Stolper-Samuelson effects for Germany in 2007. We show how sectoral outputand factor remuneration react to exogenous changes of factor endowments and product prices, respectively. These calculations are implemented using two different models comprising one with labor and capital as the classical production factors and one where we introduce patent stock as an additional factor of production. In the former, we further differentiate between a scenario where all production factors are mobile and one with sector-specific capital. In the latter analysis we measure the impact of innovationtargeting policy action for sectoral output. Positive Rybczynski effects of patents andhigh-skilled workers are strongest in knowledge-intensive sectors, while other sectors contract. The introduction of patents as a further production factor has only minor influence on the Rybczynski effects of other factors