Does the Balance-Of-Payments Matter At the Regional Level?

The main focus of this paper is the importance of the balance-of-(international and interregional)-payments for the regional economies. Discussion centers on two points: 1) on one hand, we do believe that for regions, as a rule, at the overall balance-of-payments (BP) level, the size of imbalances is reduced; 2) on the other, we argue that even if relatively important imbalances arise their effect on regional economies is small. There are several reasons why regional BPs remain relatively well-balanced at overall level. The most important is that trade and current imbalances, that regions run very often with a considerable size, are easily financed by offsetting flows recorded as well in the BP. These trade and current imbalances, that do not pass into overall imbalances, are of benign kind. We present several reasons why that easy financing – allowing for trade and current imbalances – happens. As for the argument that a BP disequilibrium – if it arises – do not hit significantly a regional economy, that is the aftermath of a nationally integrated financial system, where the great majority of the regional units are only branches of national institutions operating all over the country. In this environment, a variation in the regional money stock (that is the counterpart of an overall BP imbalance) is not magnified by a money multiplier. We then conclude that as regions do not face any significant BP constraint, exports do not have any peculiar role in the regional growth process, and therefore the regional competitiveness debate is misplaced.

A damage-based temperature-dependent model for ductile fracture with finite strains and configurational forces

A temperature dependent model for ductile fractur

Estimating trade balance for a small region: Beira–Estrela, Portugal

This paper estimates the trade balance for a small region located in inland Portugal – Beira Estrela – geographically defined as the merge of 3 official NUT III regions – Beira Interior Norte, Serra da Estrela and Cova da Beira. This estimate disaggregates by 31 commodities and includes four essential parts: first, the international trade of goods and services; second, the interregional trade of the same commodities; third, the net balance between in-region consumption by foreigner non-residents and the international consumption by residents and finally the equivalent net balance for Portuguese tourists visiting Beira-Estrela and the consumption of out Beira-Estrela Portuguese residents. Interregional trade (not available in official statistics) is the residual between supply and demand of the different groups of commodities corresponding to the columns and rows of a regional Make and Use table we derive for Beira-Estrela. This regional matrix is the outcome of the application of a simplified non-survey method to the Portuguese (National Accounts provided) Make and Use table decomposition. Moreover we set a survey on lodging and restaurant users that allowed the detachment of the interregional tourist consumption flows from the remaining interregional trade. The aim of this estimate is to assess the relative importance of tourism in the Beira-Estrela regional trade balance. Furthermore, we argue in the paper that, unlike countries, regions do not benefit from trade surpluses and these surpluses are just the counterpart of the income drainage or capital outflows, which weaken the economic region basis.

Recursive Thick Modeling and the Choice of Monetary Policy in Mexico

By following the spirit in Favero and Milani (2005), we use recursive thick modeling to take into account model uncertainty for the choice of optimal monetary policy. We consider an open economy model and generate multiple models for only the aggregate demand and aggregate supply. Models are constructed by matching the rankings of aggregate demand and aggregate supply and adding other specifications for the rest of the variables. The main results show that recursive thick modeling with equal and different weights approximates the recent historical behavior of nominal interest rates in Mexico better than recursive thin modelingmodel uncertainty, optimal control, out-of-bag, thin modeling and thick modeling