How does future tourism affect today's depletion of natural resources in a globalized world?

This paper sets up a two-period, two-sector trade model of a developing country which is abundant in a natural resource but scarce in industrial goods. It shows that lower future travel costs, rising demand for tourism and higher preferences for the environment slow down today's depletion of the non-renewable natural resource that can be used for consumption or for exporting tourism services. The benefits that accrue from sustainable resource use can be distributed over time such that the myopic developing country and forward-looking industrialized countries, which demand tourism services, are better off

The labor market effects of outsourcing parts and components: adverse Cournot competition

This paper contributes to Hübler (2008) who analyses a partial equilibrium model of outsourcing with Cournot competition in intermediate good production. Final production is located in Western Europe, whereas the intermediate good can be manufactured by a Western (outsourcing) or Eastern European supplier (offshore outsourcing). The paper asks the question how changes in production costs, in particular wages, affect output and thus labor input in the two regions. The paper proves analytically that under certain conditions higher production costs in one region reduce intermediate good production in both regions

Energy saving technology diffusion via FDI and trade: a CGE model of China

This paper introduces intra- and inter-sectoral technology diffusion via FDI and imports into a recursive-dynamic CGE model for climate policy analyses. It analyzes China's accession to a Post Kyoto emission regime that keeps global emissions from 2012 on constant. Due to ongoing energy efficiency gains, partly stemming from international technology diffusion, China will become a net seller of emission permits and steadily reduce emissions, possibly below their 2004 level until 2030. This will reduce the world CO2 price significantly. The impact of supporting foreign firms and of reducing import tariffs on Chinese welfare will not significantly change when China joins the Post Kyoto regime

Klimapolitik, Technologieoptionen und ökonomische Wachstumsmuster

Klimapolitik wirkt sich auf das Wirtschaftswachstum aus. Laut Modellrechnungen jedoch nur in geringem Maße. Dabei spielt die frühzeitige Verfügbarkeit von Technologien eine wichtige Rolle. Die Auswirkungen klimapolitischer Maßnahmen unterscheiden sich zwischen Industrie- und Schwellenländern und zwischen europäischen Wirtschaftssektoren

Can carbon based import tariffs effectively reduce carbon emissions?

We estimate CO2 implicitly contained in traded commodities based on the GTAP 7 data: While net carbon imports into the industrialized countries amount to 15% of their total emissions, net carbon exports of the developing countries amount to 12% of their total emissions, and net carbon exports of China amount to 24% of China's total emissions. We also analyze policies under a global per capita emissions based contraction and convergence regime with emission trading: When China joins the regime, the developing countries will benefit, while the industrialized countries will be almost unaffected. When China does not join the regime and instead a carbon content based border tax is imposed, the industrialized countries will significantly benefit, while China will be significantly worse off. The effect of the border tax adjustment on the global carbon price and on global emissions seems negligible

The future of development aid in a globalizing world with climate change

This essay reviews the state of knowledge about the connection of climate change and development aid in a globalizing world and makes three contributions. First, it opts for an integrated treatment of short-term aid, striving for the urgent fulfillment of basic human needs, and long-term aid, striving for economic development and self-dependence. Against the background of environmental degradation and climate change, it opts for an integrated treatment of the human-society-economy dimension and the biodiversity-nature-earth dimension as well. Second, it proposes a 'global insurance for survival', for which everybody on earth is eligible. Besides, it advocates the creation of a direct link between foreign aid and foreign direct investment, associated with international technology diffusion. Economic activities should be backed up by a global legal system focusing on labor, the environment and innovation. Within this system, everybody should be able to claim against firms at an international court. The legal system relaxes intellectual property rights of life-essential and environmentally friendly products in order to enhance technology diffusion. Third, this essay suggests to finance the integrated system of development aid via a globally unified tax imposed on all people and firms on earth above a threshold income level. As a central novel element, the allocation of aid project funding occurs on a market base with the help of a certificate trading system. This mechanism achieves efficiency and flexibility across the aid dimensions identified in the first step

A trade network theory

This paper introduces a new trade model type. It combines the gravity model, well-known in international economics, with network theory. With this approach, complicated trade networks can be algebraically solved in form of systems of linear (differential) equations. Business cycles and productivity shocks can be represented via complex numbers or the Laplace transformation. With the help of this model, new mechanisms of international trade are identified. Four theoretical examples with numerical applications are presented. First, it is demonstrated how an increase in trade from Asia to North America affects the world economy. Second, an intuitive rule for finding the welfare-optimal tariff is derived. Third, three possibilities for vanishing trade effects (fluctuations) are explained: trade diversion, the 'river-island effect', and overlapping business cycles. Fourth, it is shown how adjustment costs delay the propagation of shocks or business cycles

South-North convergence from a new perspective

This North-South model of Schumpeterian endogenous growth combines a market, productivity and knowledge effect. A set of various convergent and divergent growth paths is derived that is much richer than in the literature so far. South-North convergence based on North-South technology diffusion through intermediate goods trade is guaranteed if the knowledge effect dominates the productivity effect. Moreover, a larger Southern market expands the area of convergence and can prevent divergence. Not only a larger Southern market size, but also a higher Southern steady state growth rate benefit the North so that convergence is desirable for both, the South and the North

A simple model of outsourcing with Cournot competition

The paper analyses a partial equilibrium outsourcing model with Cournot competition in intermediate good production. Final production is located in western Europe, whereas the intermediate good can be manufactured by a western (outsourcing) or eastern European supplier (offshore outsourcing). Interregional production (factor) allocation depending on factor prices and productivity levels is investigated analytically and graphically. The main results are: Higher production costs in one region reduce intermediate good production in both regions leading to a substitution effect between high- and low-skilled labour intensive inputs rather than between eastern and western low-skilled labour intensive inputs. The sensitivity of outsourcing activities to production cost changes is highest when the interregional cost differential is smallest

Can smart policies solve the sand mining problem?

While sand has become a scarce essential resource for construction and land reclamation worldwide, its extraction causes severe ecological damage and high social costs. To derive policy solutions to this paramount global challenge with broad applicability, this model-based analysis exemplarily studies sand trade from Southeast Asia to Singapore. Accordingly, a coordinated transboundary sand output tax reduces sand mining to a large extent, while the economic costs are small for the sand importer and slightly positive for the exporters. As a novel policy implementation approach, a “Sand Extraction Allowances Trading Scheme” is proposed, which helps sustainably balance the importer’s economic growth with the exporters’ economic development. Copyright: © 2021 Hübler, Pothen. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited