The Puzzling Income Elasticity of US Imports

Existing estimates of the income elasticity suggest that, in the absence of price increases, US imports will eventually exceed US income. That the United States will change from being a largely self-sufficient economy to one that cannot cover its imports has received a great deal of attention in developing models for imports: allowance for simultaneity in the import market, recognition of dynamic adjustments and optimization, disaggregation of imports across product and countries, removal of measurement errors in official data, and differentiation between cyclical and secular forces. I show that previous methods to resolve the puzzle, though insightful, are not successful: three decades of methodological improvements in modeling and estimation yield estimated income elasticities for imports much greater than one. I resolve this puzzling estimate by removing the representative-agent assumption and addressing the substitution bias embodied in official import prices stemming from their exclusion of new products. I follow Feenstra to address the substitution bias induced by the omission of new-products' prices. To remove the representative-agent assumption, I start with an individual's demand for imports depending on income and relative prices. Then, consistent aggregation of the micro relations yields a macro equation with income, relative prices, and the variances of the distributions of imports, income, and relative prices. These variances embody individuals' heterogeneity which I model using the share of foreign-born individuals in the United States. For parameter estimation, I use the cointegration method of Johansen (1988). Recognizing either the substitution biases in import prices or the heterogeneity induced by immigration point to unitary income elasticities. Excluding these factors and using the conventional model yields estimated income elasticities much greater than one.

Productivity developments abroad

This article reviews recent productivity trends in foreign industrial countries. The focus of the analysis is on whether productivity abroad has accelerated to an extent comparable to that observed in the United States. The authors find that foreign labor productivity, unlike that of the United States, has not accelerated in the latter half of the 1990s and discuss the role played by information technology in influencing foreign productivity trends as well as cyclical and methodological factors that are important in the analysis of these trends.Productivity ; Information technology ; Labor productivity

Modeling the IMF's Statistical Discrepancy in the Global Current Account

This paper offers a framework for judging when the discrepancy embodied in current account forecasts is large. The first step in implementing this framework involves developing an econometric model explaining the components of the aggregate discrepancy, estimating the associated parameters, and generating the aggregate discrepancy's conditional expectation. The second step is to compare this model-based forecast with the discrepancy embodied in countries' current-account forecasts. If the gap in discrepancies is below a critical value, then the discrepancy embodied in the countries' current account forecasts is not large. Otherwise, the discrepancy is large and calls for a careful reexamination of the associated current account forecasts. Copyright 2002, International Monetary Fund

Exchange-rate effects on China's trade: an interim report

The rising current account deficit in the USA has attracted considerable attention in recent years. We use the "business cycle accounting" methodology to identify the principal distortions that have affected the external accounts of the US. In particular, we measure distortions in the optimality conditions of a simple two-country general equilibrium model using data from the US and the other G7 countries. We then feed these measured distortions into the model individually and use the simulated counterfactual paths of the current account to determine the contribution of each of these "wedges" to the overall external imbalance of the USA. We find that no single wedge in isolation can account closely for the observed current account. However, a combination of productivity differences and deviations from risk-sharing between the US and the rest of the G7 does the best job in accounting for most of the measured movement of the US current account.Foreign exchange rates - China ; Trade ; Econometric models

IT Investment and Hicks\u27 Composite-Good Theorem: The U.S. Experience

We study whether aggregation residuals in U.S. private investment in information technology (IT) exhibit a predictable pattern that is consistent with Hicks\u27 composite-good theorem and that may be used for forecasting. To determine whether one can extract such a pattern, we apply the general-to-specific strategy developed by Krolzig and Hendry (2001). This strategy combines ordinary least squares with a computer-automated algorithm that selects a specification based on coefficients\u27 statistical significance, residual properties, and parameter constancy. Then, we derive the testable implications from Hicks\u27 theorem and evaluate them with econometric formulations; we find qualified support for these implications. Having obtained these formulations, we evaluate their ex-post predictive accuracy and compare it to that of an autoregressive model. The key finding is that ignoring movement in relative prices results in a loss of information for predicting aggregation residuals

Sphingomyelin metabolism is involved in the differentiation of MDCK cells induced by environmental hypertonicity

Sphingolipids (SLs) are relevant lipid components of eukaryotic cells. Besides regulating various cellular processes, SLs provide the structural framework for plasma membrane organization. Particularly, SM is associated with detergent-resistant microdomains. We have previously shown that the adherens junction (AJ) complex, the relevant cell-cell adhesion structure involved in cell differentiation and tissue organization, is located in an SM-rich membrane lipid domain. We have also demonstrated that under hypertonic conditions, Madin-Darby canine kidney (MDCK) cells acquire a differentiated phenotype with changes in SL metabolism. For these reasons, we decided to evaluate whether SM metabolism is involved in the acquisition of the differentiated phenotype of MDCK cells. We found that SM synthesis mediated by SM synthase 1 is involved in hypertonicity-induced formation of mature AJs, necessary for correct epithelial cell differentiation. Inhibition of SM synthesis impaired the acquisition of mature AJs, evoking a disintegration-like process reflected by the dissipation of E-cadherin and β- and α-catenins from the AJ complex. As a consequence, MDCK cells did not develop the hypertonicity-induced differentiated epithelial cell phenotype.Fil: Favale, Nicolas Octavio. Consejo Nacional de Investigaciones Científicas y Técnicas. Oficina de Coordinación Administrativa Houssay. Instituto de Química y Físico-Química Biológicas "Prof. Alejandro C. Paladini". Universidad de Buenos Aires. Facultad de Farmacia y Bioquímica. Instituto de Química y Físico-Química Biológicas; ArgentinaFil: Santacreu, Bruno Jaime. Consejo Nacional de Investigaciones Científicas y Técnicas. Oficina de Coordinación Administrativa Houssay. Instituto de Química y Físico-Química Biológicas "Prof. Alejandro C. Paladini". Universidad de Buenos Aires. Facultad de Farmacia y Bioquímica. Instituto de Química y Físico-Química Biológicas; ArgentinaFil: Pescio, Lucila Gisele. Consejo Nacional de Investigaciones Científicas y Técnicas. Oficina de Coordinación Administrativa Houssay. Instituto de Química y Físico-Química Biológicas "Prof. Alejandro C. Paladini". Universidad de Buenos Aires. Facultad de Farmacia y Bioquímica. Instituto de Química y Físico-Química Biológicas; ArgentinaFil: Marquez, Maria Gabriela. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad Nacional de la Rioja. Departamento de Ciencias de la Salud y Educación; ArgentinaFil: Sterin, Norma Beatriz. Consejo Nacional de Investigaciones Científicas y Técnicas. Oficina de Coordinación Administrativa Houssay. Instituto de Química y Físico-Química Biológicas "Prof. Alejandro C. Paladini". Universidad de Buenos Aires. Facultad de Farmacia y Bioquímica. Instituto de Química y Físico-Química Biológicas; Argentin

Dual refractive index and viscosity sensing using polymeric nanofibers optical structures

Porous materials have demonstrated to be ideal candidates for the creation of optical sensors with very high sensitivities. This is due both to the possibility of infiltrating the target substances into them and to their notable surface-to-volume ratio that provides a larger biosensing area. Among porous structures, polymeric nanofibers (NFs) layers fabricated by electrospinning have emerged as a very promising alternative for the creation of low-cost and easy-to-produce high performance optical sensors, for example, based on Fabry-Perot (FP) interferometers. However, the sensing performance of these polymeric NFs sensors is limited by the low refractive index contrast between the NFs porous structure and the target medium when performing in-liquid sensing experiments, which determines a very low amplitude of the FP interference fringes appearing in the spectrum. This problem has been solved with the deposition of a thin metal layer (∼ 3 nm) over the NFs sensing layer. We have successfully used these metal-coated FP NFs sensors to perform several real-time and in-flow refractive index sensing experiments. From these sensing experiments, we have also determined that the sponge-like structure of the NFs layer suffers an expansion/compression process that is dependent of the viscosity of the analyzed sample, what thus gives the possibility to perform a simultaneous dual sensing of refractive index and viscosity of a fluid