Fiscal Policy and US-Canadian Trade

A factor-augmented vector autoregressive (FAVAR) model is applied to determine the effects of a rise in US government expenditure on the United States and Canadian economies. The results obtained reasonably characterize the effect of a rise in US government spending to the United States and Canadian economies emphasizing the role of the traded goods sector.Factor Model, Principal Component, Government expenditure, VAR.

Issues in international trade

This paper discuss the issues in international trade looking at the number of issues of international trade such as trade, growth and sustainable development, Financing requirements for emerging economies etc.<br /

The exchange rate disconnect puzzle: a resolution?

Early empirical studies of exchange rate determinants demonstrated that fundamentals-based monetary models were unable to outperform the benchmark random walk model in out-of-sample forecasts while later papers found evidence in favor of long-run exchange rate predictability. More recent theoretical works have adopted a microeconomic structure; a utility-based new open economy macroeconomic framework and a rational expectations present value model. Some recent empirical work argues that if the models are adjusted for parameter instability, it is a good predictor of nominal exchange rates while others use aggregate idiosyncratic volatility to generate good predictions. This latest research supports the idea that fundamental economic variables are likely to influence exchange rates especially in the long run and further that the emphasis should change to the economic value or utility based value to assess these macroeconomic models.<br /

Tourism, Trade and Domestic Welfare

Tourism has been regarded as a major source of economic growth and a good source of foreign exchange earnings. Tourism has also been considered as an activity that imposes costs on the host country. Such costs include increased pollution, congestion and despoliation of fragile environments and intra-generational inequity aggravation. One aspect that has been ignored is the general equilibrium effects of tourism on the other sectors in the economy. These effects can be quite substantial and should be taken into account when assessing the net benefits of a tourism boom on an economy. This paper presents a model which captures the interdependence between tourism and the rest of the economy, in particular agriculture and manufacturing. We examine the effect of a tourist boom on structural adjustment, commodity and factor prices and more importantly resident welfare. An important result obtained is that the tourist boom may “immiserize” the residents. This occurs because of two effects. The first, a favourable effect due to an increase in the relative price of the non-traded good which is termed the secondary terms of trade effect. The second, a negative effect due to an efficiency loss that occurs in the presence of increasing returns to scale in manufacturing. If this second effect outweighs the first effect, resident immiserization occurs.Tourism, Trade welfare

Clean technology, willingness to pay and market size

This paper extends Salop&rsquo;s model of localized competition by introducing the consumers&rsquo; willingness to pay (WTP) for clean products and allows an individual firm to choose between a clean or a dirty technology. We assume that a clean technology is relatively costly to adopt. The consumer is willing to pay more for a product produced with clean technology and the model can also be interpreted as a world economy model where each firm represents a country. There exists a critical value of m (proportion of firms adopting the clean technology), m*, such that if m &lt; m* then no country adopts the clean technology, all countries adopt the clean technology only if m &gt; m* while some countries will adopt the clean technology and some will not adopt the clean technology if m = m*. Our results also identify an example of coordination failure. Since symmetric technology adoption delivers the same level of profits as non-adoption, global coordination will be necessary to achieve the clean technology adoption outcome. Finally, we demonstrate that theprivate and public (social planner) incentives to adopt clean technology differ.<br /

Tourism, jobs, capital accumulation and the economy: A dynamic analysis

This paper examines the effects of tourism on labor employment, capital accumulation and resident welfare for a small open economy with unemployment. A tourism boom improves the terms of trade, increases labor employment, but lowers capital accumulation. The reduction in the capital stock depends on the degree of factor intensity. When the traded sector is weakly capital intensive, the fall in capital would not be so severe and the expansion of tourism improves welfare. However, when the traded sector is strongly capital intensive, the fall in capital can be a dominant factor to lower welfare. This immiserizing result of tourism on resident welfare is confirmed by the German data.tourism ; employment ; capital accumulation ; welfare

Tourism, jobs, capital accumulation and the economy: A dynamic analysis

This paper examines the effects of tourism on labor employment, capital accumulation and resident welfare for a small open economy with unemployment. A tourism boom improves the terms of trade, increases labor employment, but lowers capital accumulation. The reduction in the capital stock depends on the degree of factor intensity. When the traded sector is weakly capital intensive, the fall in capital would not be so severe and the expansion of tourism improves welfare. However, when the traded sector is strongly capital intensive, the fall in capital can be a dominant factor to lower welfare. This immiserizing result of tourism on resident welfare is confirmed by the German data.Ce papier examine l'effet du tourisme sur l'emploi, l'accumulation du capital et le bien-être dans une petite économie ouverte où une partie de la main-d'oeuvre est au chômage. Une augmentation des recettes touristiques améliore le terme de l'échange, augmente l'emploi, mais réduit l'investissement. La baisse du stock de capital dépend des intensités en facteurs des productions. Quand le secteur exposé a une intensité capitalistique faible, la baisse du capital reste limitée et l'augmentation des recettes touristique améliore le bien-être national. Cependant, si le secteur exposé a une intensité capitalistique forte, la baisse du capital est plus ample et nous obtenons une diminution du bien-être national. L'effet appauvrissant que peut avoir le tourisme est illustré par des simulations sur données allemandes

Energy, unemployment and trade

© 2018 Informa UK Limited, trading as Taylor & Francis Group. This article investigates the dynamic relationships among sectoral economic activities, macro expenditure patterns, renewable and non-renewable energy consumption and unemployment in 41 countries from 1980 to 2014. The state of the art econometric techniques, both linear and non-linear panel and time series estimation techniques are used. The results show that industrialization, services sector, government expenditure and trade openness play a positive role in reducing unemployment, while agriculture and renewable energy consumption increase unemployment. This might be, in part, due to recent technological advancements and large capital intensive investments in agriculture and renewable energy sectors. Therefore, dedicated social and labour market policies need to be adopted to complement greening economic policies