Distributing the Gains from Trade With Incomplete Information

We argue that the incomplete information which the government has about domestic agents means that tariffs become an optimal instrument to protect them from import competition. We solve for the optimal government policies. subject to the political constraint of ensuring Pareto gains from trade, the incentive compatibility constraint, and the government's budget constraint. We find that the optimal policies take the form of nonlinear tariffs, so that both buyers and sellers of the import face an effective price which exceeds its world level. We find that the tariffs are never complete, in the sense of bringing prices (or all individuals back to their initial level. Rather, it will always be possible to make some individuals strictly better off than at the initial prices, while ensuring that no persons are worse off.

Single-Particle Tunneling in Doped Graphene-Insulator-Graphene Junctions

The characteristics of tunnel junctions formed between n- and p-doped graphene are investigated theoretically. The single-particle tunnel current that flows between the two-dimensional electronic states of the graphene (2D-2D tunneling) is evaluated. At a voltage bias such that the Dirac points of the two electrodes are aligned, a large resonant current peak is produced. The magnitude and width of this peak is computed, and its use for devices is discussed. The influence of both rotational alignment of the graphene electrodes and structural perfection of the graphene is discussed.Comment: 23 pages, 9 figures; added Section II(E) and associated figures, and made other minor typographical correction

Negotiated Trade Restrictions with Private Political Pressure

In this paper we consider a home government with political pressure to restrict trade, at the expense of foreigners. The foreign country is compensated with an income transfer, which can be thought of as a portion of the tariff revenues or quota rents. In this setting the two countries should negotiate over the level of tariff and transfer of rents, depending on the level of political pressure at home. However, if this pressure cannot be directly observed abroad, then the home country may have an incentive to claim arbitrarily high political need and seek corresponding high trade barriers . We resolve this problem by determining incentive compatible trade policies, in which the home government has no incentive to overstate (or understate) the political pressure for protection.

Pass-through of Exchange Rates and Competition Between Floaters and Fixers

This paper studies how a rise in China's share of U.S. imports could lower pass-through of exchange rates to U.S. import prices. We develop a theoretical model with variable markups showing that the presence of exports from a country with a fixed exchange rate could alter the competitive environment in the U.S. market. In particular, this encourages exporters from other countries to lower markups in response to a U.S. depreciation, thereby moderating the pass-through to import prices. Free entry is found to further moderate the pass-through, in that a U.S. depreciation encourages entry of exporters whose costs are shielded by the fixed exchange rate, which further intensifies the competitive pressure on other exporters. The model predicts that certain conditions are necessary to facilitate this 'China explanation' for falling pass-through, including a 'North America bias' in U.S. preferences. The model also produces a log-linear structural equation for pass-through regressions indicating how to include the China share. Panel regressions over 1993–1999 support the prediction that a high China share in imports lowers pass-through to U.S. import prices.

Bias in U.S. Import Prices and Demand

The purpose of the paper is to measure the potential bias in the U.S. import price index due to the appearance of new product varieties, or new foreign suppliers, and determine the effect of this bias on the estimated income elasticity of import demand. Existing import price indexes are based on a sample of products from importing firms. We argue that if the share of import expenditure on the sampled products is falling over time, this will lead to an upward bias in the measured index. Using a correction based on the falling expenditure share on sampled countries, we find that the income elasticity of aggregate U.S. import demand is reduced from 2.5 to 1.7, or about halfway to unity. Our estimates suggest that the aggregate import price index is upward biased by about one and one-half percentage points annually.

On narrowing coated conductor film: emergence of granularity-induced field hysteresis of transport critical current

Critical current density Jc in polycrystalline or granular superconducting material is known to be hysteretic with applied field H due to the focusing of field within the boundary between adjacent grains. This is of concern in the so-called coated conductors wherein superconducting film is grown on a granular, but textured surface of a metal substrate. While previous work has mainly been on Jc determined using induced or magnetization currents, the present work utilizes transport current via an applied potential in strip geometry. It is observed that the effect is not as pronounced using transport current, probably due to a large difference in criterion voltage between the two types of measurements. However, when the films are narrowed by patterning into 200-, 100-, or 80-micron, the hysteresis is clearly seen, because of the forcing of percolation across higher-angle grain boundaries. This effect is compared for films grown on ion-beam-assisted-deposited (IBAD) YSZ substrate and those grown on rolling-assisted-biaxially-textures substrates (RABiTS) which have grains that are about ten times larger. The hysteresis is more pronounced for the latter, which is more likely to have a weak grain boundary spanning the width of the microbridge. This is also of concern to applications in which coated conductors will be striated in order to reduce of AC losses.Comment: text-only: 10 pages, plus 5 figures on 5 page

Re-Assessing the U.S. Quality Adjustment to Computer Prices: The Role of Durability and Changing Software

In the second-half of the 1990s, the positive impact of information technology on productivity growth for the United States became apparent. The measurement of this productivity improvement depends on hedonic procedures adopted by the Bureau of Labor Statistics (BLS) and Bureau of Economic Analysis (BEA). In this paper we suggest a new reason why conventional hedonic methods may overstate the price decline of personal computers. We model computers as a durable good and suppose that software changes over time, which influences the efficiency of a computer. Anticipating future increases in software, purchasers may "overbuy" characteristics, in the sense that the purchased bundle of characteristics is not fully utilized in the first months or year that a computer is owned. In this case, we argue that hedonic procedures do not provide valid bounds on the true price of computer services at the time the machine is purchased with the concurrent level of software. To assess these theoretical results we estimate the model and find that before 2000 the hedonic price index constructed with BLS methods overstates the fall in computer prices. After 2000, however, the BLS hedonic index falls more slowly, reflecting the reduced marginal cost of acquiring (and therefore marginal benefit to users) of characteristics such as RAM, hard disk space or speed.