When is Trade Protection Good for Growth?

The empirical relationship between trade protection and economic growth is surprisingly fragile, as shown in a number of other papers. After demonstrating this empirical sensitivity, we address one possible explanation for these findings: that the relationship is nonlinear. Following the endogenous growth literature, we test for the possibility that the relationship between trade barriers and growth is contingent on measures of comparative advantage. The findings suggest that these nonlinearities do in fact exist — in particular, the correlation between tariffs and growth is strongest and positive for capital-abundant countries — and are robust to the choice of control variables.

Immigrants Benefit the Community and Economy

Immigration has historically been a defining characteristic of the United States, and it remains one of the country’s most significant economic advantages. Deferred Action for Childhood Arrivals (DACA) was implemented by President Obama to grant temporary legal status to undocumented immigrants who were brought to the U.S. as children, as long as they are enrolled in school or working. Given President Trump’s recent comments about ending the DACA program, Congress must work on a policy solution that will allow the nearly 800,000 “Dreamers” currently enrolled in DACA to remain legally in the U.S. There are both moral and economic reasons to do so

Where the Girls Are: Trade and Labor Market Segregation in Colombia

Gary Becker's theory of discrimination argues that increasing competition will reduce discrimination in the labor market. We use the Colombian trade liberalization episode over the period 1984–91 to investigate this claim on plant-level data in three ways. First, we examine whether women are concentrated in exporting plants. Second, we examine whether the increase in foreign competition due to unilateral trade liberalization disproportionately drove discriminating plants out of the market. Finally, we investigate whether trade liberalization affected hiring decisions (and thus gender segregation) by Colombian firms.discrimination, trade, competition

Trade Liberalization and Pollution Havens

U.S. Presidential Executive Order 13141 commits the United States to a "careful assessment and consideration of the environmental impacts of trade agreements." The most direct mechanism through which trade liberalization would affect environmental quality in the U.S. is through changes in the composition of industries. Freer trade means greater specialization, increasing the concentration of polluting industries in some countries and decreasing it in others. Indeed, in this paper we predict a substantial reduction in U.S. pollution from 1972-94 due entirely to a shift in the composition of U.S. manufacturing toward cleaner industries. We then use annual industry-level data on imports to the U.S. to examine whether this compositional shift can be traced to the significant trade liberalization that occurred over the same time period; we conclude that no such connection exists. First, we find that a shift toward cleaner industries, similar to that observed in U.S. manufacturing, has also occurred among U.S. imports. Second, we find no evidence that pollution-intensive industries have been disproportionately affected by the tariff changes over that time period.

Is Environmental Policy a Secondary Trade Barrier? An Empirical Analysis

Should international trade agreements be extended to include negotiations over environmental policy? The answer depends on whether countries distort levels of environmental regulations as a secondary means of providing protection to domestic industries; our results suggest that they do. Previous studies of this relationship have treated the level of environmental regulation as exogenous, and found a negligible correlation between environmental regulation and trade flows. In contrast, we find that, when the level of environmental regulation is modeled as an endogenous variable, its estimated effect on trade flows is significantly higher than previously reported.

PDF model based on Langevin equation for polydispersed two-phase flows applied to a bluff-body gas-solid flow,

The aim of the paper is to discuss the main characteristics of a complete theoretical and numerical model for turbulent polydispersed two-phase flows, pointing out some specific issues. The theoretical details of the model have already been presented [Minier and Peirano, Physics Reports, Vol. 352/1-3, 2001 ]. Consequently, the present work is mainly focused on complementary aspects, that are often overlooked and that require particular attention. In particular, the following points are analysed : the necessity to add an extra term in the equation for the velocity of the fluid seen in the case of twoway coupling, the theoretical and numerical evaluations of particle averages and the fulfilment of the particle mass-continuity constraint. The theoretical model is developed within the PDF formalism. The important-physical choice of the state vector variables is first discussed and the model is then expressed as a stochastic differential equation (SDE) written in continuous time (Langevin equations) for the velocity of the fluid seen. The interests and limitations of Langevin equations, compared to the single-phase case, are reviewed. From the numerical point of view, the model corresponds to an hybrid Eulerian/Lagrangian approach where the fluid and particle phases are simulated by different methods. Important aspects of the Monte Carlo particle/mesh numerical method are emphasised. Finally, the complete model is validated and its performance is assessed by simulating a bluff-body case with an important recirculation zone and in which two-way coupling is noticeable.Comment: 23 pages, 10 figure

On Persistent Poverty in a Rich Country

We examine differences in income within the U.S., and the regions of persistent poverty that have arisen, using a newly assembled dataset of counties that links historical 19th century Census data with contemporaneous data. The data, along with an augmented human capital growth model, permit us to identify the roles of contemporaneous differences in aggregate production technologies and factor endowments, in conjunction with the historical roles of institutions, culture, geography, and human capital. We allow for possible cross-county factor mobility via a correlated random effects GMM estimator that identifies simultaneously the coefficients on time varying and time-invariant determinants of income. We find evidence of significant regional differences in production technologies, but our decompositions of the poor/non-poor income gap suggests that at least three fourths of the gap is explained by differences in productive factors. Persistently poor counties are different (and poorer) primarily because they have lower levels of factors of production, not because they use the factors they have less efficiently. While much of the income difference is explained by contemporary factors, the contribution of historical levels of human capital is surprisingly large. The combined contribution of historical and contemporary human capital is striking: together, they explain nearly 60 percent of the overall income gap between the persistently poor and non-poor counties

Kentucky Annual Economic Report 2019

This report is one of the important ways that the Center for Business and Economic Research fulfills its mission as specified in the Kentucky Revised Statutes (KRS 164.738) to examine various aspects of the Kentucky economy. The analysis and data presented here cover a variety of topics that range from an economic forecast for Kentucky in 2019 to a broad presentation of factors affecting the economy

The Effect of Smoking on Kentucky’s Workforce

Excerpt from the Executive Summary: Smoking has been estimated to increase health care costs in the United States by $167.5 billion annually (Xu et al. 2015). In Kentucky, smoking adds$2.5 billion in health care expenditures each year. Most of these costs were paid by public programs such as Medicaid and Medicare. While these costs are significant, they represent only a portion of the costs that smoking imposes on society. Smoking also leads to poorer labor market outcomes. Smokers are more likely to be unemployed, earn lower wages, and die prematurely than non-smokers. These negative labor market effects reduce economic activity and lower tax revenues, adding to the social costs and fiscal impact that smoking imposes. Past research shows that smokers generally earn four to eleven percent less than similar nonsmokers. Some of this wage penalty is due to the negative health consequences of smoking. Smoking can reduce workers’ health, causing them to be less productive, have higher health insurance costs, and incur greater rates of absenteeism. As a result, smokers tend to earn lower wages. However, the wage penalty might also reflect differences between those who decide to smoke and those who do not rather than being caused directly by smoking

The Economic Impact of Diabetes in Kentucky

Excerpt from the Executive Summary: The Kentucky Department of Public Health is responsible for improving the health and safety of Kentucky’s residents by preventing disease and injuries and encouraging healthy lifestyles. The department administers nearly 150 programs that address critical health issues affecting Kentuckians. These programs screen newborns for health problems, prevent the spread of infectious diseases, promote oral health, and provide numerous other services. Diabetes represents a growing health concern for the nation and Kentucky. It is a chronic condition that causes blood sugar levels to rise and contributes to other serious health conditions such as heart and kidney disease. The U.S. Centers for Disease Control and Prevention lists diabetes as the 7th leading cause of death in the nation. The disease imposes significant costs on the country’s economy. The American Diabetes Association estimates that the U.S. spends $237 billion annually on diabetes-related health care. In addition, diabetes also adversely affects the nation’s workforce. As the disease progresses, individuals may find it more difficult to work. This can reduce employment, productivity, wages, and tax revenue. To better understand how diabetes affects Kentucky residents, the Kentucky Department of Public Health contracted with the University of Kentucky’s Center for Business and Economic Research to study the economic impacts of the disease. This study has three main goals: estimate the effect diabetes has on Kentucky’s workforce; estimate the short-run and long-run effects diabetes has on state tax revenues; and examine how prevention and education programs could affect the health of those with diabetes and how they could potentially affect the state’s workforce and tax revenues