The Export Base Model with a Supply-Side Stimulus to the Export Sector

In the export-base model, the level of a region’s economic activity is underpinned by the performance of its export sector (Daly, 1940; Dixon and Thirlwall, 1975; Kaldor, 1970; North, 1955). This theory is now almost universally represented as a primitive version of the familiar Input-Output (IO) or Keynesian demand-driven approach, where regional output is linked to regional exports through a rather mechanistic multiplier process (Romanoff, 1974). Further, in a standard IO inter-regional framework, the expansion of output in one region always generates positive impacts on other regions. That is to say, there is always a positive spread, and no negative backwash, effect. However, these models typically embody no supply-side constraints. What is more, the stimulus to the export sector is often thought to come through supply-side improvements (North, 1955; McCombie, 1992). Whilst accepting that the development of a healthy export base is generally central to promoting the growth of the regional economy, the relationship is likely to be much more complex than is usually thought. Also whilst an increase in regional exports typically increases economic activity in the target region, the effect on other regions is less straightforward (Myrdal, 1957). In this paper we begin by using a single-region IO analysis of the operation of a stylised export base model. The impact of a conventional increase in export demand is compared to a situation in which increased competitiveness underpins the improved export performance. This analysis is then extended through the use of an inter-regional (Scotland–Rest of the UK) Computable General Equilibrium (CGE) model. In simulation, different exogenous demand and supply side disturbances are calibrated so as to generate the same long-run expansion in Scottish manufacturing exports. The subsequent specific evolutions of regional GDP and employment in both Scotland and the rest of the UK (RUK) are then tracked.Export base, efficiency improvement, regional growth

Econometric estimation of nested production functions and testing in a computable general equilibrium analysis of economy-wide rebound effects

Quantitative models, such as computable general equilibrium (CGE), that are increasingly used to inform policy processes rely on a number of assumptions concerning how good and services are produced. Previous research has shown that the elasticity of substitution between inputs and the structure in which these inputs interact can have large impacts on model output. However, the choice of elasticities and production structure is often made without the support of statistical evidence. This research aims to address these points by estimating nesting structure and the elasticities of substitution therein across a number of sectors in the UK then testing the implications of introducing these estimates to parameterise a CGE model that is then used to simulation the economy-wide impacts of increased efficiency in the productive use of energy

Input-output analyses of the pollution content of intra- and inter-national trade flows

This paper considers the application of input-output accounting methods to consider the pollution implications of different production and consumption activities, with specific focus on pollution embodied in intra-and inter-national trade flows. We consider the illustrative case studies of interregional trade flows between two regions of the UK and between five Mid-West regions/states within the US. We focus on different types of air pollutant of current policy concern in each case and demonstrate how use of the environmental input-output framework allows us to analyse the nature and significance of interregional pollution spillovers. Our results raise questions in terms of the extent to which authorities at regional level can control local emissions where they are limited in the way some emissions can be controlled, particularly with respect to changes in demand elsewhere within the national economy. This implies a need for policy co-ordination between national and regional level authorities to meet emissions reductions targets. Moreover, the existence of pollution trade balances between regions also raises issues in terms of net losses/gains in terms of pollutants as a result of interregional trade. In conducting analyses for different types of air pollutant (here CO2 as a global warming gas, GHG, in the UK case and ammonia, NH3, as a pollutant of more local concern in the US case) we also consider how pollution embodied in international trade flows may be accounted for and attributed

The Export Base Model with a Supply-Side Stimulus to the Export Sector

In the export-base model, the level of a region’s economic activity is underpinned by the performance of its export sector (Daly, 1940; Dixon and Thirlwall, 1975; Kaldor, 1970; North, 1955). This theory is now almost universally represented as a primitive version of the familiar Input-Output (IO) or Keynesian demand-driven approach, where regional output is linked to regional exports through a rather mechanistic multiplier process (Romanoff, 1974). Further, in a standard IO inter-regional framework, the expansion of output in one region always generates positive impacts on other regions. That is to say, there is always a positive spread, and no negative backwash, effect. However, these models typically embody no supply-side constraints. What is more, the stimulus to the export sector is often thought to come through supply-side improvements (North, 1955; McCombie, 1992). Whilst accepting that the development of a healthy export base is generally central to promoting the growth of the regional economy, the relationship is likely to be much more complex than is usually thought. Also whilst an increase in regional exports typically increases economic activity in the target region, the effect on other regions is less straightforward (Myrdal, 1957). In this paper we begin by using a single-region IO analysis of the operation of a stylised export base model. The impact of a conventional increase in export demand is compared to a situation in which increased competitiveness underpins the improved export performance. This analysis is then extended through the use of an interregional (Scotland–Rest of the UK) Computable General Equilibrium (CGE) model. In simulation, different exogenous demand and supply side disturbances are calibrated so as to generate the same long-run expansion in Scottish manufacturing exports. The subsequent specific evolutions of regional GDP and employment in both Scotland and the rest of the UK (RUK) are then tracked

Design of Transgenic S. cerevisiae for Enzymatic Pretreatment

Biofuels, combustible fuel produced from fermentation of agricultural biomass by microorganisms, represent one of the best possible paths forward for sustainable energy production. However, inefficiencies in biofuel production create barriers that stand in the way of their widespread adoption. One such barrier is the breakdown of lignin, a biopolymer that exists on the edge of plant cell walls which protects the sugars that are used in fermentation. Currently, lignin is broken down in energy-intensive thermal pretreatment processes. A viable alternative is the expression of lignin-degrading enzymes by synthetic microorganisms that work at standard temperatures, eliminating the need for the high-energy input of thermal pretreatment. Four lignin-degrading enzymes were selected from termites (R. flavipes) and white rot fungus(C. fioriniae PJ7) and two helper enzymes that assist in lignin degradation were selected and then optimized for expression in yeast. The genetic devices amplified were assembled using standard DNA assembly methods. Future transformation into yeast (S. cerevisiae) cells and testing of lignin-breakdown effectiveness may open up an alternative path for thermal pretreatment of biomass