Human capital externalities, trade, and economic growth

Human capital, because of its special role in innovative activity and technological progress, has formed the bedrock of the new theories of endogenous growth. Human capital, however, not only serves as an engine of growth, but also as a productive input along with labor and physical capital. In this study, we distinguish between these two roles of human capital and find evidence of the importance of both. We also find that the relationship between growth and the external effects of human capital vary according to trade regime. When literacy rates are relatively high, open economies grow about 0.65 to 1.75 percentage points more than closed economies. Replaced by "Human capital, trade and economic growth"Economic development ; Human capital

Trade deficits: causes and consequences

According to conventional wisdom, trade balances reflect a country's competitive strength-the lower the trade deficit, the stronger the country's industries and the higher its rate of economic growth. In this article, David Gould and Roy Ruffin review the history of the conventional wisdom and empirically examine whether large overall trade deficits or bilateral trade imbalances are associated with lower rates of economic growth. They find that, once the fundamental determinants of growth have been accounted for, trade imbalances have little effect on rates of economic growth.Deficit financing ; Free trade

Lepidoptera Recorded From the Islands of Western Lake Erie, With a Brief Account of Geology and Flora

A list of Lepidoptera from the islands of western Lake Erie is presented along with a brief account of the geology, flora, and human activities in the area. The checklist contains 169 species representing 27 families. Suggestions are made for the improvement of this preliminary checklist as well as for future research

Spontaneous Expulsion of Giant Lipid Vesicles Induced by Laser Tweezers

Irradiation of a giant unilamellar lipid bilayer vesicle with a focused laser spot leads to a tense pressurized state which persists indefinitely after laser shutoff. If the vesicle contains another object it can then be gently and continuously expelled from the tense outer vesicle. Remarkably, the inner object can be almost as large as the parent vesicle; its volume is replaced during the exit process. We offer a qualitative theoretical model to explain these and related phenomena. The main hypothesis is that the laser trap pulls in lipid and ejects it in the form of submicron objects, whose osmotic activity then drives the expulsion.Comment: Plain TeX file; uses harvmac and epsf; .ps available at http://dept.physics.upenn.edu/~nelson/expulsion.p

The theory and practice of free trade

David M. Gould, Roy J. Ruffin, and Graeme L. Woodbridge argue that free trade is supported both by economic principles and evidence from countries that have followed open market policies. The authors demonstrate that the countries whose markets are the most open have higher real output and economic growth. ; The authors show that many arguments for protection obscure the benefits countries derive from international trade. High-wage countries not only can compete with low-wage countries, they dominate the world economic stage. Trade deficits or surpluses are not inherently bad or good, but rather reflect a country's consumption and investment decisions over time. Moreover, there is no evidence to suggest that imports cause systematic unemployment or that exports create systematic employment. The authors explain why industrial policies and protection designed to promote particular industries usually backfire; trade policies usually reflect the lobbying efforts of the most vocal and powerful self-interest groups.Free trade

Income taxes as reciprocal tariffs

Tariff ; Taxation

Income taxes as reciprocal tariffs

This article shows the equivalence between tariffs on international trade and income taxation. Traditionally, income taxes have been seen as lowering society's output through the household's labor-leisure trade-off. Income taxes also reduce the degree to which individuals specialize in market activity, which is similar to the way countries respond to tariffs in international trade. Income taxes discourage individuals from specializing in activities that reflect their comparative advantage. In so doing, income taxes may have their most distorting effects, not by encouraging individuals to work less but by causing them to spend more time working at endeavors for which their talent is limited. Using a general model of interpersonal exchange, the authors demonstrate parallels between income taxes and tariffs. Over a range of income taxes, raising taxes can benefit large groups of similarly skilled individuals and hurt small groups. As in tariff theory, the costs of income taxes are small only if they succeed in raising revenue. Thus, it is very costly for an economy to be on the downward portion of its tax revenue (Laffer) curve. The more heterogeneous the society, the higher the income tax rate that will maximize tax revenues. By overlooking the effects of heterogeneity in the workforce and the potential for workers to flee to home production, policymakers may under- or overestimate the effects of income taxes on various sectors of the economy and tax with unintended consequences.Income tax ; Tariff ; Taxation

A Neo-Institutional Assessment of Cooperative Evolution: Comparing the Australian Wheat Board and the Fonterra Dairy Group

Agribusiness,