Inefficient policies, inefficient institutions and trade

Despite the general belief among economists on the growth-enhancing role of international trade and significant trade opening over the past 25 years, the growth performance of many developing economies, especially of those in Latin America and Africa, has been disappointing. While this poor growth performance has many potential causes, in this paper I argue that part of the reason may be related to the interaction between weak institutions and trade. In particular, I construct a model in which trade opening in societies with weak institutions (in particular autocratic and elite-controlled political systems) may lead to worse economic policies. The reason is that general equilibrium price effects of taxation and expropriation in closed economies also hurt the elites, and this puts a natural barrier against inefficient policies. Trade openness removes this barrier and enables groups with political power to exercise this power in more inefficient ways. [resumen de autor

Los determinantes fundamentales de la prosperidad económica y la importancia de las instituciones

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The effect of foreign service on trade volumes and trade partners

It has been emphasized that international promotion activities such as state visits or the presence of embassies, consulates and export promotion agencies help foster trade when there are search costs and/or uncertainty. In this paper we try to disentangle the differential effect that foreign service (embassies and consulates) has on both the establishment of trade links with countries, and the effect on trade volumes with already existing trading partners (the extensive and intensive margins at the country level). Using the estimation procedure suggested by Helpman, Melitz and Rubinstein (2007) and a cross-section of 21 exporters and 162 importers as in Rose (2005), we find that the presence of a foreign service office in a given country increases the probability of trading with that partner between 11% and 18%, but that it has no effect on the volume of trade with already existing trading partners. We then proceed to evaluate the importance of the extensive margin at the sectoral level, finding that these probabilities are substantially larger for more differentiated sector

Essays on international trade and institutions

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2006."September 2006."Includes bibliographical references.This dissertation consists of three essays in the intersection of International Trade and Institutions. The first essay looks at the effect of trade opening on the efficiency of institutions. I argue that part of the reason why some developing economies have not experienced a boost in economic performance despite increasing trade openness may be related to the interaction between weak institutions and trade. In particular, I construct a model in which trade opening in societies with weak political institutions may lead to worse economic policies. The reason is that general equilibrium price effects of taxation and expropriation in closed economies also hurt the elites, and this puts a natural barrier against inefficient policies. Trade openness removes this barrier and enables groups with political power to exercise this power in more inefficient ways. In the second essay, I analyze how the inefficiency of weak political regimes is shaped by the elites' factor endowments, and how those inefficiencies alter standard predictions about international trade and capital flows. Elites always distort sectors that use intensively factors they own on a larger share less, irrespective of the endowment of the economy.(cont.) This implies that, with trade opening, predictions about factor content of trade can be reversed if the elites' factor endowments differ from that of the economy. A capitalist elite will distort capital-intensive sectors less than others, which may more than compensate for the scarcity of that factor, and make the country a net exporter of capital-intensive goods. Also, when opening to international capital markets, the direction of capital flows can be reverted. The elites will distort capital-intensive sectors less, which may more than compensate for the abundance of capital, and drive its return above that on the rest world. The third essay provides econometric evidence that the model in the first essay is consistent with the data. Using a panel of 92 countries and 17 years, I show that non-democratic regimes that trade more experience more expropriation, while this is not the case for democratic regimes. The results are robust to different econometric specifications and different sets of controls.by Rubén Segura-Cayuela.Ph.D

Uncertainty and entry into export markets

It has been emphasized that international promotion activities such as state visits or the presence of embassies, consulates and export promotion agencies help foster trade when there are search costs and/or uncertainty. In this paper we try to disentangle the differential effect that foreign service (embassies and consulates) has on both the establishment of trade links with countries, and the effect on trade volumes with already existing trading partners (the extensive and intensive margins at the country level). Using the estimation procedure suggested by Helpman, Melitz and Rubinstein (2007) and a cross-section of 21 exporters and 162 importers as in Rose (2005), we find that the presence of a foreign service office in a given country increases the probability of trading with that partner between 11% and 18%, but that it has no effect on the volume of trade with already existing trading partners. We then proceed to evaluate the importance of the extensive margin at the sectoral level, finding that these probabilities are substantially larger for more differentiated sector

Long-run growth and demographic prospects in advanced economies

This paper analyses the long-run growth rates of advanced economies, based on demographic factors. To this end, growth is broken down into two components: growth in productivity (GDP per working-age person) and the projected rate of growth of the working-age population. Productivity is assumed to grow in the longrun at a constant rate equal to that of the technology leader, whereas the demographic projections are those of the United Nations. This simple methodology abstracts from other factors normally considered in the literature on long-term growth, such as the convergence process (we focus on advanced economies) and heterogeneity in participation and employment rates. However, the results do not differ much from those obtained using these other approaches (which are richer, but also more speculative), although the growth rates turn out to be somewhat lower in most cases. They indicate a general deceleration of growth in advanced economies in the coming two decades, due to a slowdown in working-age population growth. Japan, Germany, Italy and Spain face the least favourable growth dynamics in our sample, as these countries face reductions in the size of their workforces. By 2050 France and the United Kingdom could have overtaken Germany to become the largest economies in Europe. In the case of Spain (whose working-age population is expected to peak in 2024) the growth rate of GDP will progressively decline to just below 2% over the following decadeEste documento analiza las tasas de crecimiento de largo plazo para una muestra representativa de economías avanzadas, sobre la base de las perspectivas demográficas. Para ello, se descompone el crecimiento del PIB en dos factores: el crecimiento de la productividad (definida como PIB por persona en edad de trabajar) y el crecimiento de la población en edad de trabajar. En particular, se supone una tasa de crecimiento de largo plazo de la productividad constante e igual a la del líder tecnológico, y para la población se toman las proyecciones demográficas de Naciones Unidas. Esta metodología sencilla no tiene en cuenta otros factores utilizados en la literatura del crecimiento de largo plazo, tales como los procesos de convergencia –por lo que este documento se centra exclusivamente en economías avanzadas– o la heterogeneidad en la participación y las tasas de empleo. Sin embargo, los resultados de este trabajo no difieren mucho de otros estudios basados en un conjunto más amplio de supuestos. En todo caso, los resultados apuntan a una disminución generalizada del crecimiento en las economías avanzadas durante las próximas dos décadas, debido a un descenso del crecimiento de la población en edad de trabajar. Japón, Alemania, Italia y España son los países de la muestra analizada que se enfrentan a los escenarios demográficos más adversos, con reducciones de su fuerza laboral. En el caso de la economía española se espera que el crecimiento de la población en edad de trabajar (la cual alcanzaría su máximo en 2024) se ralentice, lo que posiblemente contribuirá, de manera progresiva, a reducir la tasa de crecimiento del PIB a largo plazo (situándose ligeramente por debajo del 2% en la próxima década). Hacia el año 2050, el tamaño de las economías de Francia y Reino Unido podría haber sobrepasado al de Alemani

Competitiveness indicators : the importance of an efficient allocation of resources

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La financiación del comercio y la evolución del comercio internacional durante la crisis

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Efectes de l'hàbit tabàquic sobre la termoregulació durant l'activitat física

El fumar cigarretes, a un ritme habitual i sense evitar el seu consum les hores prèvies a l’activitat física, pot comprometre de forma significativa els mecanismes termoreguladors de pèrdua de calor i provocar una resposta hemodinàmica anormal durant l’exercici. L’associació de tabac i activitat física d’alta intensitat pot fer augmentar la temperatura central al pertorbar els mecanismes de pèrdua de calor mitjançant la redistribució del flux vascular cutani. A més, durant exercicis perllongats com els exercicis de resistència, i en ambients alorosos, el consum de cigarretes pot actuar com a factor limitant en el rendiment esportiu, i incrementar el risc d’hipertèrmia

Efectes de l'abstinència tabàquica sobre la termoregulació durant l'activitat física

La situació de fumador actiu 1 hora abans de la pràctica d’activitat física pot alterar la resposta termoreguladora, comprometen de forma significativa els mecanismes vasodilatadors cutànis de pèrdua de calor i provocar una resposta hemodinàmica anormal durant l’exercici. L’efecte additiu de la nicotina i de l’activitat física d’alta intensitat pot fer augmentar la temperatura central al pertorbar els mecanismes de pèrdua de calor mitjançant la redistribució del flux vascular cutani. A més, durant exercicis perllongats com els exercicis de resistència, i en ambients calorosos, el consum actiu de cigarretes podria actuar com a factor limitant en el rendiment esportiu, i poder incrementar el risc d’induir hipertèrmia