Trade-Inducing Quality Standards for Used Durables

We construct a theoretical framework to study the impact of asymmetric quality standards on used durable goods on trade flows, profits and consumer welfare. We show that asymmetry in quality standards generates trade in used goods from high to low standard countries while at the same time reducing trade in new goods. The industry in the exporting country benefits from this change while consumers lose out. Consumers in the importing country are the biggest beneficiaries, but domestic industry is hurt. These results suggest that quality standards on used goods are a powerful policy tool whose use should be monitored by the WTO.quality standards, durable goods, used durables, trade in used goods

Pollution and Capital Tax Competition within a Regional Block

The paper examines the interaction among taxes on factors income, environmental quality and welfare. We construct a two-country regional block model with capital mobility and cross-border pollution. Pollution in the two countries is simultaneously abated by the private sector, in response to a pollution tax and by the public sector utilizing income and pollution tax revenue. We demonstrate, among other things, that due to the existence of cross-border pollution in many cases the Nash optimal policy on capital income is a positive tax, even if taxes on the income of immobile factors are chosen optimally. This tax rate increases with the degree of cross-border pollution.optimal income taxes, public pollution abatement, cross-border pollution, capital mobility

Optimal Tax Policies under Two-Stage Clean-Up, Cross-Border Pollution and Capital Mobility

The literature has identified cross-border pollution, capital mobility and two-stage clean-up as the key features in the «trade Vs environment» debate, yet no study examines all three simultaneously. We build a two country trading block model with cross-border pollution and free movements of goods and capital between the two countries. Pollution reduces welfare and there is simultaneous private and public pollution abatement. Public pollution abatement is financed with the use of lump-sum and pollution tax revenue. We, also, examine how cross-border pollution and capital mobility affect each country’s optimal tax policies. Finally, we examine how the existence of capital mobility alters the effectiveness of pollution taxes on net pollution.Optimal Taxes, Two-stage Clean-Up. Cross-Border Pollution, Capital Mobility.

Tax Competition, Capital Mobility and Public Good Provision Within a Trading Block

We construct a general equilibrium model of a two-country trading block where governments through tax policies attract mobile capital, and provide an imported public consumption good. At Nash equilibrium, when the public good is under-provided, (i) a country with a large GDP, has a large Nash equilibrium income tax rate, (ii) if initially the existing foreign capital in the country is zero or small, then the country with a large population or high individual marginal willingness to pay for the public good has a large Nash equilibrium income tax rate. When the two countries act cooperatively, then for each country, the cooperative optimal income tax rate is positive, and if they are identical then the cooperative income tax rate is greater than the Nash. When the two countries are different, then it is possible that the cooperative income tax rate is less than the Nash.Nash and cooperative income taxes,capital mobility, public goods

Optimal Tax Policies with Private-Public Clean-Up, Cross-Border Pollution and Capital Mobility

This paper builds a model of a region with two non-identical countries, cross-border pollution and free movements of goods and capital within the region. Pollution reduces welfare and there is simultaneous private and public pollution abatement. Public pollution abatement is financed with the use of lump-sum and pollution tax revenue. The introduction of public pollution abatement enables us to derive the optimal pollution taxes in terms of the marginal cost of public pollution abatement. We derive and compare for each country the Nash and cooperative lump-sum and pollution taxes and examine how cross-border pollution and capital mobility affect them. Finally, we examine the impact of capital mobility on the effectiveness of pollution taxes on net pollution.optimal taxes, public pollution abatement, cross-border pollution, capital mobility

Canonical correlation of shipping forward curves

Thesis (S.M. in Ocean Engineering)--Massachusetts Institute of Technology, Dept. of Mechanical Engineering, 2010.Cataloged from PDF version of thesis.Includes bibliographical references (p. 106-109).The behavior and interrelations between the main shipping forward curves are analyzed using multivariate statistics after removing the volatility distortions dictated by the Samuelson hypothesis. Principal Components Analysis and Canonical Correlation analysis were used to demonstrate how the task of explaining the various shipping forward curves can be simplified substantially and how very high correlations can be achieved between shipping forward curves. The conditions under which correlations are higher are discussed as well as the various applications of these results using case studies. Applications include trading from a hedge fund perspective, cross hedging any physical exposure in illiquid markets and portfolio optimization. Conditioning as a tool is also examined to demonstrate how more reliable correlation results can be obtained for cross hedging or other purposes, and how the best trading opportunities can be unveiled conditional on recently observed data. Tanker valuations are carried out using the adjusted forward curves with the RAFL ship valuation model. The results are very close to transaction prices for relatively modem vessels while deviations in older ships are explained with regards to phase out regulations and other factors. The ship value volatility and consequently the valuations of typical options are substantial and increase as a percentage of the ship value with age. These results have to be considered seriously in shipping transactions that include optionalities which are very common.by Nicholas A. Hadjiyiannis.S.M.in Ocean Engineerin

Structural and economic analysis of capesize bulk carriers

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Mechanical Engineering, 2010.Cataloged from PDF version of thesis.Includes bibliographical references (p. 935-1001).Structural failures of bulk carriers continue to account for the loss of many lives every year. Capes are particularly vulnerable to cracking because of their large length, their trade in high density cargos, and the high rates of cargo operations. Rapid loss often occurs allowing little reaction time which has alarmed the industry. The Cape market is extremely volatile with ship values appreciating in some cases by over 500% and then returning to original levels, all within a few years. Recent market changes have rendered conventional pricing methods inaccurate and often inapplicable, resulting in a pressing need for alternate valuation models. Very little research combines the closely interlinked technical and financial elements which are crucial for valuation and decision making by various parties in the shipping industry. The present research involves the collection and analysis of one of the largest ship cracking surveys. It is focused specifically on capes which lie at the core of the problem and is based on the records of ship owners, classification societies and shipyards. A location coding system was specifically designed to analyze the data and present the frequency, size and estimated crack growth rates with respect to location and ship age. The results were compared with existing knowledge based on surveys conducted over the past 50 years, the stress distribution based on an investigation of loading patterns, and theoretical fracture mechanics predictions. They were then combined with the frequency of crack failures, derived from an investigation of an extensive fleet sample, to develop a reliability model which yields the hazard function throughout the ship's life. Repair procedures and design modifications were also examined and a model was designed to assess their cost effectiveness based on the present value of projected crack costs. The crack repair costs were calculated as a function of ship age to be used in conjunction with the safety assessment for decision making by ship owners, insurance companies, classification societies and others. A new state of the art valuation model was developed combining both technical and financial aspects in a fundamental valuation based on risk-adjusted discounting of expected cash flows. A forward view of the main parameters was obtained from derivatives and financial securities that include shipping futures, FFAs, options, interest rate swaps and inflation protected bonds. The inherent risk of cracks is treated as a fictitious credit risk, derived from the reliability model, and is incorporated into the discount rate along with other risk premiums. Other inputs include repair costs and off-hire time, which were calculated with respect to ship age using a database of repairs, while the records of public and private companies were used along with surveys to estimate operating expenses. The resulting valuations were found to be in very close alignment with recent transaction prices across all ship ages. The model also estimates the volatility of the ship value and uses it to price optionalities that are often included in ship transactions. The combination of technical and financial analysis of this thesis is valuable to many involved in the shipping industry including brokers, accountants, analysts, shipping banks and investors interested in valuation; ship owners when making managerial or investment decisions; shipyards when designing ships, setting prices and deciding payment structures and options; insurance companies when covering total loss or emergency repairs; the IMO when setting regulations; and classification societies when scheduling inspections and deciding which areas to focus on.by Nicholas Andrew Hadjiyiannis.Ph.D

Re-examination of the work of T. E. Hulme

This project challenges a series of common interpretations of Hulme's work: that his arguments are contradictory; that his career can be separated into distinct “phases”; that he endorsed other thinkers' ideas uncritically; and that he promulgated authoritarian politics. Chapter 1 examines the entries in Hulme's notebooks that relate his views on the nature of reality and language. Read through ideas in the works of Bergson, Nietzsche and Ribot, these rudimentary notes present a coherent “anti-intellectualist” philosophical position, consistent with claims made in his later writings. Chapter 2 focuses on “A Lecture on Modern Poetry.” Hulme's rejection of nineteenth-century verse was part of a broader campaign by poets in London to find new ways of expression, yet his ideas stand independently of claims made by Flint, Storer and Pound. Hulme's greatest contribution to Imagism is the emphasis he put on the use of images in poetry, a method that follows from the distinction he drew in the notebooks between “direct” and “indirect” language. Chapter 3, which examines Hulme's essays and lectures on Bergson, demonstrates that, although he embraced Bergson's philosophical method, Hulme remained critical of many of Bergson's theories. This discredits the claim that he was simply reiterating Bergson's ideas. Ultimately, Bergson's “intuition” enabled Hulme to develop his earlier description of “modern” poetry and to recast it as “classic” poetry. Chapter 4 investigates Hulme's political essays. Together with Storer, Hulme participated in a debate in the Commentator concerning the parliamentary crisis of 1910. It was as part of an attempt to create an efficient propaganda strategy for the Conservative party that Hulme postulated his famous antithesis between Romanticism and Classicism. Hulme's analysis of the process of political conversion shows that in 1910-12 he had not abandoned elements in his thought from Bergson's philosophy. Moreover, far from sharing the authoritarian political views of the Action Française, he can be more accurately described as a “moderate Conservative.” Chapter 5 demonstrates that claims Hulme made in his art criticism are consonant with the general reaction in 1913-14 against representational art. While drawing heavily on Worringer's anti-materialist conception of art history, he was using it to defend his contemporaries' experimentation with geometric forms, in a way similar to Fry and Bell. Although, like Worringer and Ludovici, Hulme campaigned for antihumanism and mixed aesthetics with politics, the model of art he proposed did not carry the authoritarian implications of those of Worringer and Ludovici. Finally, Chapter 6 explores Hulme's war writings. Hulme was not a militarist; rather, he supported Britain's involvement in the war on the grounds that war against Germany would protect the British political institutions. He stayed true to his Conservative principles, using ideas from Sorel and Proudhon to dissociate the “democratic” from the “pacifist” ideology. There is also evidence that, despite his explicit rejection of vitalism in “A Notebook,” Hulme continued to value Bergson's method of “intuition” right up to his death in 1917. This project, therefore, argues for a re-interpretation of Hulme's work and shows the value of scrutinising the intellectual and political context in which he was writing in understanding the precise nature of his thought