The Swedish Real Exchange Rate under Different Currency Regimes

This paper presents evidence on the behavior of the Swedish real exchange rate relative to Germany under different currency regimes 1973:1-2001:4. The results suggest that the real exchange rate is cointegrated with Swedish and German productivity, which is consistent with Balassa (1964) and Samuelson (1964). In the short run, the regime has mattered for the dynamics of the real exchange rate. Deviations from equilibrium have been adjusted more quickly when the nominal exchange rate has been allowed to float freely, which indicates that it acts as a shock absorber.Real exchange rate; Exchange rate regimes; Cointegration

Monetary Regimes, Labour Mobility and Equilibrium Employment

This paper analyses the impact of the monetary regime on labour markets in a small open economy, by considering the game between large wage setters and an independent central bank in a two-sector model with potential labour mobility between sectors. Two monetary regimes are considered: membership in a monetary union and an inflation target combined with a flexible exchange rate. A key result is that when there is perfect labour mobility between sectors, the monetary regime does not matter for real wages, employment or profits. Moreover, introducing labour mobility substantially reduces wages and increases employment. Other findings are that when labour is immobile between sectors: (i) the real wage in the tradables sector is higher under inflation targeting than in a monetary union, while the reverse applies to the non-tradables sector; (ii) inflation targeting generates higher employment and profits than membership in a monetary union; and (iii) both workers and firms in the two sectors in general prefer inflation targeting to membership in a monetary union.Inflation Targeting; Monetary Union; Equilibrium Employment; Labour Mobility

The Global Arms Trade Network 1950-2007

We study the evolution of the global arms trade network using a unique dataset on all international transfers of major conventional weapons over the period 1950-2007. First, we provide a careful description of the characteristics of global arms trade using tools from social network analysis. Second, we relate our …findings to political regimes by studying whether differences in polity scores affect the likelihood of arms trade by estimating an augmented gravity equation. Our findings from the network analysis are much in line with common views of the Cold War. We see a clear division between the Warsaw Pact and NATO, with the Soviet Union being more central to the former than the United States to the latter. We find that differences in polity has a significant, negative effect on the likelihood of arms trade between two countries. The relationship is remarkably robust throughout the sample period and does not hold for trade in any other good that we investigate. The result suggests that democracies are indeed more likely to trade arms with other democracies than with autocracies since the former are not perceived as potential adversaries. We view this finding as evidence in favour of the Democratic Peace Theory.Arms Trade; Networks; Democracy; Autocracy; NATO; The Warsaw Pact

Democracy as a Middle Ground: A Uni…ed Theory of Development and Political Regimes

A large literature documents that autocratic regimes have not, on average, outperformed democratic regimes, although they do display greater variance in economic performance. At the same time, no long-lived autocracy currently is rich whereas every long-lived democracy is. This paper puts forth a theory to account for these observations. The theory rests on the idea that autocratic leaders are heterogenous in their preferences and the idea that special interest groups can successfully lobby a democratic regime for policies that delay industrialization. We show that an elite landed class chooses to democratize society only after the economy has accumulated enough wealth.Autocracy; Democracy; Landed Elites; Growth Miracles; Vested Interests

Pattern Bargaining and Wage Leadership in a Small Open Economy

Pattern bargaining with the tradables (manufacturing) sector as wage leader is a common form of wage bargaining in Europe. We question the conventional wisdom that such bargaining produces wage restraint. In our model all forms of pattern bargaining give the same outcomes as uncoordinated bargaining under inflation targeting. Under monetary union wage leadership for the non-tradables sector is conducive to wage restraint, whereas wage leadership for the tradables sector is not. Comparison thinking may lead the follower to set the same wage as the leader. Such equilibria can arise when the leader sector is the smaller sector and promote high employment.pattern bargaining, wage setting, inflation targeting, monetary regimes

Autocracies and Development in a Global Economy: A Tale of Two Elites

Data on the growth performances of countries with similar comparative (dis)advantage and political institutions reveal a striking variation across world regions. While some former autocracies such as the East Asian growth miracles have done remarkably well, others such as the Latin American economies have grown at much lower rates. In this paper, we propose a political economy explanation of these diverging paths of development by addressing the preferences of the country's political elite. We build a theoretical framework where factors of production owned by the political elites differ across countries. In each country, the incumbent autocrat will cater to the preferences of the elites when setting trade policy and the property rights regime. We show how stronger property rights may lead to capital accumulation and labor reallocation to the manufacturing sector. This, in turn, can lead to a shift in the comparative advantage, a decision to open up to trade and an inflow of more productive foreign capital. Consistent with a set of stylised facts on East Asia and Latin America, we argue that strong property rights are crucial for success upon globalization.Autocracy; Growth; Political Elites; Landowners; Capitalists; Growth Miracles; Trade; Comparative Advantage; Capital Mobility; Property Rights

Autocracies and Development in a Global Economy: A Tale of Two Elites

Data on the growth performances of countries with similar comparative (dis)advantage and political institutions reveal a striking variation across world regions. While some former autoc- racies such as the East Asian growth miracles have done remarkably well; others such as the Latin American economies have grown at much lower rates. In this paper; we propose a political economy explanation of these diverging paths of development by addressing the preferences of the country?s political elite. We build a theoretical framework where factors of production owned by the political elites di¤er across countries. In each country; the incumbent autocrat will cater to the preferences of the elites when setting trade policy and the property rights regime. We show how stronger property rights may lead to capital accumulation and labor reallocation to the manufacturing sector. This; in turn; can lead to a shift in the comparative advantage; a decision to open up to trade and an in?ow of more productive foreign capital. Consistent with a set of stylised facts on East Asia and Latin America; we argue that strong property rights are crucial for success upon globalization.Autocracy; Growth; Political Elites; Landowners; Capitalists; Growth Miracles; Trade; Comparative Advantage; Capital Mobility; Property Rights

Autocracies and Development in a Global Economy: A Tale of Two Elites

Data on the growth performances of countries with similar comparative (dis)advantage and political institutions reveal a striking variation across world regions. While some former autocracies such as the East Asian growth miracles have done remarkably well, others such as the Latin American economies have grown at much lower rates. In this paper, we propose a political economy explanation of these diverging paths of development by addressing the preferences of the country’s political elite. We build a theoretical framework where factors of production owned by the political elites differ across countries. In each country, the incumbent autocrat will cater to the preferences of the elites when setting trade policy and the property rights regime. We show how stronger property rights may lead to capital accumulation and labor reallocation to the manufacturing sector. This, in turn, can lead to a shift in the comparative advantage, a decision to open up to trade and an inflow of more productive foreign capital. Consistent with a set of stylised facts on East Asia and Latin America, we argue that strong property rights are crucial for success upon globalization.Autocracy, Growth, Political Elites, Landowners, Capitalists, Growth Miracles, Trade, Comparative Advantage, Capital Mobility, Property Rights

Holocene carbon and nitrogen accumulation rates and contemporary carbon export in discharge

The contemporary role of mires in land-atmosphere exchange of carbon dioxide (CO₂) is the subject of intense scientific debate. Investigating patterns and mechanisms of variations in past carbon (C) accumulation rates as well as contemporary C fluxes of peatlands facilitates predictions of future mire C sink strength under a changing climate. Nitrogen (N) is an important macro-nutrient and thereby strongly coupled to the C accumulation rate. Thus, I have investigated Holocene C and N accumulation rates and their potential controls, and the annual and seasonal stream C export during the Holocene at the oligotrophic fen Degerö Stormyr in northern Sweden. The mean (±SD) long-term apparent rates of C and N accumulation (LORCA and LORNA) were estimated to 13.7±5.5 g C m⁻² yr⁻¹ and 0.28±0.14 g N m⁻² yr⁻¹, respectively. These rates were relatively low compared to those of other northern peatlands. Variations in C and N accumulation rates exhibited similar temporal patterns largely coinciding with major changes in botanical remains, and mainly primary production controlled the accumulation rates. The botanical composition had a major impact on the degree of decomposition, with indications of enrichment of recalcitrant compounds in highly degraded peat, as well as differences in ¹³C-¹²C composition of litter at the onset of decomposition. There were also indications of preferential plant uptake of ¹⁴N at higher N availability. Stream total C export was primarily driven by discharge, with average annual C export estimated to 12.2 g m⁻² yr⁻¹ over twelve years. This flux typically corresponded to 25-37% of the mean annual net uptake of CO₂ (NEE). However, during a year with a dry summer and wet autumn the discharge C export corresponded to as much as 90%, highlighting the importance of seasonality. The highest TOC export was exhibited during summer when accounting for differences in discharge, underlining the importance of timing of precipitation for the seasonal C export. Seasonal variations in C quality (SUVA₂₅₄) indicate different within mire sources of TOC during the year. In this thesis I conclude the importance of primary production for C and N accumulation rates, and highlight the importance of seasonality for stream C export from mires