The Distributional Impacts of Indonesia's Financial Crisis on Household Welfare: "A Rapid Response Methodology"

Analyzing the distributional impacts of economic crises is important and, unfortunately, an ever more pressing need. If policymakers are to intervene to help those most adversely impacted, then policymakers need to identify those who have been most harmed and the magnitude of that harm. Furthermore, policy responses to economic crises typically must be timely. In this paper, we develop a simple methodology to fill the order and we've applied our methodology to analyze the impact of the Indonesian economic crisis on household welfare there. Using only pre-crisis household information, we estimate the compensating variation for Indonesian households following the 1997 Asian currency crisis and then explore the results with flexible non-parametric methods. We find that virtually every household was severely impacted, although it was the urban poor that fared the worst. The ability of poor rural households to produce food mitigated the worst consequences of the high inflation. The distributional conseqences are the same whether we allow households to substitute towards relatively cheaper goods or not. However the geographic location of the household mattered even within urban or rural areas and household income categories. Additionally, households with young children may have suffered disproportionately adverse effects.http://deepblue.lib.umich.edu/bitstream/2027.42/39771/3/wp387.pd

When Knowledge is not Enough: HIV/AIDS Information and Risky Behavior in Botswana

The spread of the HIV/AIDS epidemic is still fueled by ignorance in many parts of the world. Filling in knowledge gaps, particularly between men and women, is considered key to preventing future infections and to reducing female vulnerabilities to the disease. However, such knowledge is arguably only a necessary condition for targeting these objectives. In this paper, we describe the extent to which HIV/AIDS knowledge is correlated with less risky sexual behavior. We ask: even when there are no substantial knowledge gaps between men and women, do we still observe sex-specific differentials in sexual behavior that would increase vulnerability to infection? We use data from two recent household surveys in Botswana to address this question. We show that even when men and women have very similar types of knowledge, they have different probabilities of reporting safe sex. Our findings are consistent with the existence of non-informational barriers to behavioral change, some of which appear to be sex-specific. The descriptive exercise in this paper suggests that it may be overly optimistic to hope for reductions in risky behavior through the channel of HIV-information provision alone.

Testing the Imports-As-Market-Discipline Hypothesis

It has long been believed that international competition forces domestic firms to behave more competitively. I term this the imports-as--market-discipline hypothesis. I construct a simple static oligopoly model and estimate the model using panel data from Turkish manufacturing firms. The data span the course of a dramatic trade liberalization. Looking for changes in price-marginal cost markups as trade policy shifts, I test the imports-as-market discipline hypothesis. In all five industries to which the hypothesis is relevant, markups change in the direction predicted by the theory. These changes are statistically significant in all but one of the five industries.Research Seminar in International Economics, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100850/1/ECON305.pd

Strategic Trade Policy and Direct Foreign Investment: Tariffs Versus Quotas

This paper investigates the equivalence of tariffs and quotas when the market in question is imperfectly competitive and open to direct foreign investment. The absence of a foreign supply response under a quota, so critical to the analysis of the differential impact of tariffs and quotas under imperfect competition, is called into question by the potential occurrence of direct foreign investment. The paper proves the equivalence of optimal tariffs and quotas when the markets are oligopolistic and open to direct foreign investment.Research Seminar in International Economics, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100849/1/ECON304.pd

Empirics of Taxes on Differentiated Products: The Case of Tariffs in the U.S. Automobile Industry

In this paper the author presents a new technique for econometricallyl estimating the demand for differentiated products. He adopts a Lancasterian approach to product differentiation and uses theoretical results from this approach to solve several empirical problems. He then applies the technique to the demand for automobiles.Research Seminar in International Economics, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100851/1/ECON306.pd

Taxes, Tariffs, and the Global Corporation

In this paper we develop some simple models of optimal tax and tariff policy in the presence of global corporations that operate in an imperfectly competitive environment. The models emphasize two important differences in the practical application of tax and tariff policy - tax, but not tariff, policy can apply to offshore output and tariff, but not tax, policy can be industry-specific. Recognizing the multinationals' production decisions are endogenous to the tax and tariff policies they face, we investigate optimal tax or subsidy policies for domestically owned firms and optimal trade policy.Research Seminar in International Economics, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100856/1/ECON310.pd