Three essays in international economics

Are transport markets and associated costs important for international trade? To the present day there is a sparse and fragmented literature pointing towards an affirmative answer. This Thesis reinforces such opinion by accounting for transport markets in general equilibrium models of trade, and providing empirical evidence on the impact of determinants that explain casual trade-and-transport related phenomena. The outcomes of the Thesis promote policy and/or investment activism in developing countries, due to the gains from trade lost to excessive transport costs. Two particular observations are investigated:i) When and why should a transport hub emerge? Using a simple trade model of monopolistic competition with representative firms incorporating network theory, the determinants governing optimal network formation become the level of transport costs, increasing returns in transportation and centrality. Empirical deduction supports that exports increase more on average if a shipping route passing through a hub is selected relative to a direct route, following a reduction in variable trade costs. Thus geographically disadvantaged countries that absorb high transport costs can ameliorate these by trading via a hub.ii) Are tariffs and shipping prices complementary? By not assuming this interaction, standard trade models of representative and heterogeneous firms are unable to identify by decomposing the direct and indirect -that is, via adjustments in transport technology- effects of trade liberalisation, resulting in observing large elasticities of import demand. Invoking a model of monopolistic competition with heterogeneous firms that trade using transport services operating under increasing returns, it is the presence of the latter that amplifies the response of trade volumes to tariffs declines. Yet transportation may also dampen such responses, for the shipping price is a function of the factory price of the good and a markup. The empirical experiments provide support to such propositions.The last chapter is distinct and deliberates on the importance of modeling financial networks that represent real world transaction systems relative to abstract artificial topologies. It is found that the international network of financial exposures exhibits characteristics that are congruent with robust-yet-fragile networks. Employing a common model of contagion illustrates how the robust-yet-fragile network structure absorbs defaults by peripheral countries however becomes susceptible to default cascades when combinations of peripheral countries or a financial centre collapse

Trade and trade-offs: shipping in changing climates

This paper addresses the evolution of maritime transport demand in response to global climate change mitigation and adaptation efforts. The complexity of the global shipping system makes predicting volumes and patterns of long-term future international maritime trade a challenging task which is best explored by building scenarios rather than ‘precise’ forecasts. We present four contrasting scenarios of international maritime trade out to 2050, available in high resolution in terms of the dimensions studied (regions, countries, commodities, decades), which are consistent with high and low levels of global CO2 mitigation and associated climate impacts. The scenarios project trade increasing to between two and four times the 2010 value by 2050. Scenarios characterised by low temperature increases and material intensity lead to the lower bound trade increase with high trade growth in bioenergy commodities. Unfettered production growth across countries, high temperature increases and material intensity lead to a quadrupling of trade across energy, containerised, dry and wet commodities. The estimated range is lower than those in existing scenarios and forecasts in which globalisation is assumed to continue apace. The scenarios which project the highest growth presupposes both limited decarbonisation (in contrast to the Paris Agreement) and continued growth in expanding markets. The scenarios therefore become a valuable policy and decision-making tool to address technological and operational change required of the shipping sector, if it is to deliver mitigation in line with the Paris Agreement

Reducing the environmental impact of surgery on a global scale: systematic review and co-prioritization with healthcare workers in 132 countries

Abstract Background Healthcare cannot achieve net-zero carbon without addressing operating theatres. The aim of this study was to prioritize feasible interventions to reduce the environmental impact of operating theatres. Methods This study adopted a four-phase Delphi consensus co-prioritization methodology. In phase 1, a systematic review of published interventions and global consultation of perioperative healthcare professionals were used to longlist interventions. In phase 2, iterative thematic analysis consolidated comparable interventions into a shortlist. In phase 3, the shortlist was co-prioritized based on patient and clinician views on acceptability, feasibility, and safety. In phase 4, ranked lists of interventions were presented by their relevance to high-income countries and low–middle-income countries. Results In phase 1, 43 interventions were identified, which had low uptake in practice according to 3042 professionals globally. In phase 2, a shortlist of 15 intervention domains was generated. In phase 3, interventions were deemed acceptable for more than 90 per cent of patients except for reducing general anaesthesia (84 per cent) and re-sterilization of ‘single-use’ consumables (86 per cent). In phase 4, the top three shortlisted interventions for high-income countries were: introducing recycling; reducing use of anaesthetic gases; and appropriate clinical waste processing. In phase 4, the top three shortlisted interventions for low–middle-income countries were: introducing reusable surgical devices; reducing use of consumables; and reducing the use of general anaesthesia. Conclusion This is a step toward environmentally sustainable operating environments with actionable interventions applicable to both high– and low–middle–income countries

A spatial macroeconomic analysis of the equity-efficiency trade-off of the European cohesion policy

In this study we use a spatial dynamic general equilibrium model to analyse the macroeconomic impact of cohesion policy-like investments in nine net beneficiary member states of the European Union. We examine whether or not the objective of reducing regional disparities (equity) prevents the interventions from maximising their impact on national GDP impact (efficiency) by looking at GDP multipliers and interregional spillovers. We find that there may be an equity-efficiency trade-off depending on the characteristics of both the investments made and the targeted regional economies. Moreover, the analysis shows that the growth spillovers from more developed to less developed regions are limited. This implies that, in order to reduce regional disparities, investment must be made in the less developed regions of each country.</p

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Letter to the editor