International convergence and divergence of material input structures: an industry-level perspective

This note analyzes whether international material input structures have converged or diverged over time. Pooled variances for 25 industries were obtained from OECD input-output tables in constant prices for nine countries over the period 1971-1990. It is found that high-tech industries were mainly characterized by divergence of material input structures, whereas convergence was found for many low-tech, more mature industries. In line with studies on (labor) productivity growth rates, convergence of material input structures was prevalent in the 1970s, while divergence dominated in the 1980s.

Production Chains in an Interregional Framework: Identification by Means of Average Propagation Lengths

When linkages between industries are studied from the perspective of production chains, sequencing is important. In this respect, both the strength of the linkages and the distance between industries are relevant. Distance is measured by the average propagation length, defined as the average number of steps it takes a stimulus in one industry to propagate and affect another industry. Using the 1985 intercountry input-output table for six European countries, we present three applications. These are, visualizing the production structure by graphing its production chains, analyzing intercountry linkages between industries, and determining the role that each country plays within the system

The determinants of structural change in the European Union : a new application of RAS

The paper considers a (static) portfolio system that satisfies adding-up contraints and the gross substitution theorem. The paper shows the relationship of the two conditions to the weak dominant diagonal property of the matrix of interest rate elasticities. This enables to investigate the impact of simultaneous changes in interest rates on the asset demands.

Responsibility and trade emission balance: an evaluation of approaches

This paper compares two concepts to evaluate the international responsibility of a country with respect to its emissions. Using a multi-regional input-output model, we show that the trade emission balance and the responsibility emission balance yield the same result. In practical work, however, a lack of data availability implies that the same technology assumption has been commonly adopted. In that case, also a third alternative exists, which simply evaluates the emissions embodied in the trade balance of the country. This third alternative yields the same results as the other two approaches at the aggregate level. At the level of individual products, however, the results are clearly different and it turns out that the third alternative answers a different question. That is, it is appropriate for measuring the emission content of the products that cross the border. In our empirical application, we consider Spain in 1995 and 2000, distinguishing nine different gases: CO2, CH4, N2O, SF6, HFCs, PFCs, SO2, NOx, and NH3

Towards a more effective climate policy on international trade

In the literature on the attribution of responsibilities for greenhouse gas emissions, two accounting methods have been widely discussed: production-based accounting (PBA) and consumption-based accounting (CBA). It has been argued that an accounting framework for attributing responsibilities should credit actions contributing to reduce global emissions and should penalize actions increasing them. Neither PBA nor CBA satisfy this principle. Adapting classical Ricardian trade theory, we consider ex post measurement and propose a scheme for assigning credits and penalties. Their size is determined by how much CO2 emissions are saved globally due to trade. This leads to the emission responsibility allotment (ERA) for assigning responsibilities. We illustrate the differences between ERA and PBA and CBA by comparing their results for 41 countries and regions between 1995–2009. The Paris Agreement (COP21) proposed new market mechanisms; we argue that ERA is well suited to measure and evaluate their overall mitigation impact.</p

International trade and air pollution damages in the United States

This paper investigates the health and economic consequences of trade due to various air pollutants embodied in exports and imports. We compare the US emissions generated for US exports and those that were avoided by importing. An input-output framework of the US economy is employed together with a comprehensive database on damages (expressed in monetary terms) generated by pollutants, as estimated by Muller et al. (2011). We find that damages associated with international trade in 2002 were considerable. The net result is that damages were avoided through trade and that these avoided damages amounted to 2.7% of the US trade deficit and 3.4% of the US value-added associated with trade. Moreover, the computed "damage to value-added ratios" differed greatly across industries. Exports in some industries are so hazardous that more than half of the value-added gained from extra exports disappeared due to environmental damages. These findings imply that the US might benefit more from trade by increasing its exports more in low damage-intensive products than in high damage-intensive products

Structural decomposition analyses:the differences between applying the semi-closed and the open input–output model

The open and the semi-closed input–output model are widely used in impact analysis but usually yield considerably different outcomes. This paper examines whether such differences also exist in structural decomposition analyses. The empirical part considers the decomposition of the growth in gross output and in labor compensation, for China (1997–2007) and for a set of 35 other countries. Our main findings are twofold. First, for gross output growth, both models yield very similar results for the factors they have in common. Therefore, if only the contribution of these common factors is of interest, it does not matter whether the semi-closed or the open input–output model is used. Second, for the analysis of labor compensation growth, both models may yield significantly different results for the labor compensation coefficients. Therefore, if the contribution of changes in labor compensation coefficients is of interest, the semi-closed model is recommended to be used