A nonrenewable energy resource added to capital and labor in the neoclassical growth model introd... more A nonrenewable energy resource added to capital and labor in the neoclassical growth model introduces its depletion dynamics and expands the role of substitution. Optimal depletion implies a rising energy price but extraction may increase intermittently due to investment or labor growth according to the pattern of substitution between the three inputs. Conditions to maintain intergenerational equity are examined. The paper also analyzes the tragedy of the commons and a myopic monopolist in this three factor growth model.
Page 1. T. Randolph Beard Henry Thompson Auburn University Efficient versus "Popular" T... more Page 1. T. Randolph Beard Henry Thompson Auburn University Efficient versus "Popular" Tariffs for Regulated Monopolies* I. Introduction ... Further, distortions in pricing due to the political nature of regulation are systematically related to the effects of income on product demand. ...
The link belween output changes and factor-mix adjustments in general equilibrium is examined for... more The link belween output changes and factor-mix adjustments in general equilibrium is examined for each of nine industries using pooled datia from 12 developed countries over the years 1MO-85. Specihcations of the Stolper-Samuelson theorem and the specific-facton model of production are built on the-ussumptionr and scruaure of theory with each industry isolated in turn. In their simplest version with only capital and Labor input, these competitive general-equilibrium models explain a goad deal of the o b s e~e d variahioos in iodusIrial favtor mLres. The specific-facto~s model perfom better. 1. Introduction The theory of production and trade is built in large part on the competitive paradigm contained in general-equdibrium models of production. The Stolper-Samuelson theorem (1941) of the Heckscher-Ohlin model captures the link between an industry's price and the return to its intensively used factor of production, illustrated inEdgeworth box and Lerner-Peatce diagrams. The specific-factors model assumes every industry is characterized by productive capital used only in that industry, creating a direct link between the price of an output and its specific factor. This paper provides some empirical evidence for the Stolper-Samuelson theorem and specific-factors model. Model specifications are estimated using data for each of nine manufacturing industries across 12 OECD countries horn 1970-85. In the Stolper-Sarnuebon ~pecilication, a rising price in an industry causes the capital-labor ratios to adjust a c c o r h g to factor intensity. In the specilic-factors model, e higher price in an industry is expected to increase labor input. There are data available for many industries, suggesting a model with many goods. When the prices of goods a e exogenously given at world levels, however, a production model with two factors shared by each industry is overdetermined. Inttoducing demand allows a tractable model, but relaxes the intensity links. The present paper isolates each industry and aggregates the others into a single sector, developing a series of two-sector models to coincide with the Stulper-Samuelson theorem. Learner (1994a) argues that an idea needs nn issue, a theory, and evidence to survive. The Stolper-Samuelson theorem meets Lhe Erst two conditions. but lacks much of the third. The theorem was originally presen(ed and applied largely in the context of
This paper investigates the effects of the real exchange rate and income on US tourism export rev... more This paper investigates the effects of the real exchange rate and income on US tourism export revenue and import spending with quarterly data for the floating exchange period from 1973 to 2010. Separate estimates of export revenue and import spending functions prove more revealing than estimates of the trade balance. Vector autoregressions capture dynamic adjustments to exchange rate and income shocks. Depreciation raises US tourism export revenue but does not affect import spending. US tourists going abroad respond to income while foreign tourists coming to the US do not.
A simple three-factor, two-good general equilibrium model, allowing complementarity in production... more A simple three-factor, two-good general equilibrium model, allowing complementarity in production, is examined. Conclusions of general equilibrium economics with two factors must be reinterpreted and qualified when complementarity is possible. Sign patterns of how changing factor endowments affect outputs and how changing prices affect factor payments are uncovered for a small open economy. Results should prove valuable to a wide range of economists interested in extending general equilibrium analysis to include complementary factors of production.
This paper investigates exchange rate effects on US tourism trade in structural vector autoregres... more This paper investigates exchange rate effects on US tourism trade in structural vector autoregressive models with quarterly data for the floating exchange rate from 1973 to 2007. Tourism export revenue and import spending are examined along with the tourism trade balance. Depreciation raises the US tourism trade balance with a unit elastic effect after six quarters with no evidence of J-curve behaviour. Only export revenue is marginally sensitive to the exchange rate. Foreign travel is a luxury good for US tourists, while travel to the USA is a normal good for foreign tourists.
This article examines a tariff on an imported factor of production in a small, open economy with ... more This article examines a tariff on an imported factor of production in a small, open economy with two domestic factors. Suppose the imported factor is intensive in export production, and labor in import competing production. The factor tariff would reduce export production and trade, but raise the wage. The flexibility afforded by the three factors raises the possibility that import spending might fall more than the decrease in output. That is, the factor tariff could raise income. Inelastic demand for the imported factor and a high labor share of income favor increased income.
This chapter develops a three country model of constant cost production and trade based on produc... more This chapter develops a three country model of constant cost production and trade based on productivity and country size. Trade may be limited to two of the countries assuming that gains from trade are necessary for trade to take place. A small country may produce too little to offer gains from trade to the other two. At the other extreme, a country may be too productive to gain from trade. Regional trade is observed if the countries with similar productivities are located closer together, a testable hypothesis.
This paper examines empirical links between relative prices and bilateral trade based on constant... more This paper examines empirical links between relative prices and bilateral trade based on constant cost trade theory. The global models are built from the World Input-Output Database WIOD aggregated to three, four, and five regions and goods. The simple model assumes relative labor shares are relative prices and average relative price is the terms of trade. Trade patterns are complex among partially specialized regions. Model predictions are compared to observed net exports in seven different aggregations. Regression analysis also examines the effects of relative prices on the total bilateral net exports across models.
Fixed effect time series effect models are used to analyze the spatial and time series pattern of... more Fixed effect time series effect models are used to analyze the spatial and time series pattern of the effects of subsidies on manufacturing income across twenty counties in Alabama from 1970 to 1999. The results from the fixed effect model indicate that median populated counties performed better than larger and smaller counties while the time series effect model indicates that the impact of subsidies is marginal across the state over time.
This paper estimates trends in factor price elasticities adding energy Btu input to fixed capital... more This paper estimates trends in factor price elasticities adding energy Btu input to fixed capital assets and the labor force in annual US data from 1949 to 2013. Second order effects improve estimates of the production function in log differences. The unrestricted estimates test for concavity and constant returns to scale. Adding energy input reduces the apparent productivity of labor and reveals strong capital-labor factor price elasticities with pronounced trends. Energy and labor trend to become weak complements. These trends offer insight into recent economic history and keys to predicting the future as well.
Rising foreign income increases tourism demand and wages if tourism is labour-intensive relative ... more Rising foreign income increases tourism demand and wages if tourism is labour-intensive relative to capital. This paper adds a third factor of production, skilled labour or natural resources, to delve more deeply into the potential income redistribution in general equilibrium due to rising foreign income. In a small open economy producing tourism and an import competing good, the wage may fall in spite of the expanding tourism sector if capital is a technical complement with the third factor. A model including a traditional export is also examined, as is a specific factors version of the model. The possibility of a falling wage with expanding labour-intensive tourism relates to a number of policy issues in touristic countries.
The theory of production and trade is motivated in large part by the effects of tariffs on wages.... more The theory of production and trade is motivated in large part by the effects of tariffs on wages. General equilibrium models that examine these effects include constant costs, factor proportions, specific factors, imperfect competition and noncompetitive factor market. The present paper reviews the effects of tariffs on wages in small open economies across this broad range of trade theory. From this wide perspective, tariffs support wages only under narrow sets of assumptions. There should be no presumption that tariffs support wages.
This paper estimates exchange rate sensitivity of US cotton imports for three textile producers w... more This paper estimates exchange rate sensitivity of US cotton imports for three textile producers with floating or regularly adjusting exchange rates since the 1970s, Bangladesh, Indonesia, and Thailand. The cotton import market model includes mill use, US production cost, and an alternate supply. Empirical analysis examines effects of the Asian financial crisis. Exchange rate behavior and sensitivity varies across the three importers. Aggregation hides information on market reaction. Changes in the rate of depreciation have stronger effects than changes in the level of the exchange rate.
When Akira Takayama passed away this winter, the economics profession lost one of its most produc... more When Akira Takayama passed away this winter, the economics profession lost one of its most productive and most passionate members. This memoir catalogues Professor Takayama's publications and offers some insight into his contributions and personality from a few of his colleagues. 2. A Synopsis of Akira's Life and Career Akira was born in Yokohama in 1932, escaped the firebombing during the war, and studied science during Japan's reconstruction. He received his Bachelor of Science degree at the International Christian University in 1957. Akira then travelled by ship to attend the University of Rochester. He studied under Lionel McKenzie, and finished his dissertation under Ron Jones in 1962, the first Ph.D. in economics awarded at Rochester. Akira returned to Tokyo and earned a second Ph.D. from Hitosuhashi University in 1964. Akira held positions at the International Christian University (1962-4), the University of Manchester (1964-5), Purdue University (1 966-go),
ABSTRACT A sizeable literature examines exchange rate pass-through to disaggregated import prices... more ABSTRACT A sizeable literature examines exchange rate pass-through to disaggregated import prices, but few micro-studies focus on consumer prices. This article explores exchange rate pass-through to consumer prices in South Africa, for 2002–2007, using a unique data set of highly disaggregated data at the product and outlet level. The empirical approach allows pass-through to be calculated over various horizons for different goods and services. The heterogeneity of pass-through for food sub-components is considerable. Switches between import and export parity pricing of maize are found significant for five out of ten food sub-components. Using actual weights from the CPI basket, overall pass-through to the almost 63 per cent of the CPI covered is about 30 per cent after two years, and higher for food.
When Akira Takayama passed away this winter, the economics profession lost one of its most produc... more When Akira Takayama passed away this winter, the economics profession lost one of its most productive and most passionate members. This memoir catalogues Professor Takayama's publications and offers some insight into his contributions and personality from a few of his colleagues. 2. A Synopsis of Akira's Life and Career Akira was born in Yokohama in 1932, escaped the firebombing during the war, and studied science during Japan's reconstruction. He received his Bachelor of Science degree at the International Christian University in 1957. Akira then travelled by ship to attend the University of Rochester. He studied under Lionel McKenzie, and finished his dissertation under Ron Jones in 1962, the first Ph.D. in economics awarded at Rochester. Akira returned to Tokyo and earned a second Ph.D. from Hitosuhashi University in 1964. Akira held positions at the International Christian University (1962-4), the University of Manchester (1964-5), Purdue University (1 966-go),
A nonrenewable energy resource added to capital and labor in the neoclassical growth model introd... more A nonrenewable energy resource added to capital and labor in the neoclassical growth model introduces its depletion dynamics and expands the role of substitution. Optimal depletion implies a rising energy price but extraction may increase intermittently due to investment or labor growth according to the pattern of substitution between the three inputs. Conditions to maintain intergenerational equity are examined. The paper also analyzes the tragedy of the commons and a myopic monopolist in this three factor growth model.
Page 1. T. Randolph Beard Henry Thompson Auburn University Efficient versus "Popular" T... more Page 1. T. Randolph Beard Henry Thompson Auburn University Efficient versus "Popular" Tariffs for Regulated Monopolies* I. Introduction ... Further, distortions in pricing due to the political nature of regulation are systematically related to the effects of income on product demand. ...
The link belween output changes and factor-mix adjustments in general equilibrium is examined for... more The link belween output changes and factor-mix adjustments in general equilibrium is examined for each of nine industries using pooled datia from 12 developed countries over the years 1MO-85. Specihcations of the Stolper-Samuelson theorem and the specific-facton model of production are built on the-ussumptionr and scruaure of theory with each industry isolated in turn. In their simplest version with only capital and Labor input, these competitive general-equilibrium models explain a goad deal of the o b s e~e d variahioos in iodusIrial favtor mLres. The specific-facto~s model perfom better. 1. Introduction The theory of production and trade is built in large part on the competitive paradigm contained in general-equdibrium models of production. The Stolper-Samuelson theorem (1941) of the Heckscher-Ohlin model captures the link between an industry's price and the return to its intensively used factor of production, illustrated inEdgeworth box and Lerner-Peatce diagrams. The specific-factors model assumes every industry is characterized by productive capital used only in that industry, creating a direct link between the price of an output and its specific factor. This paper provides some empirical evidence for the Stolper-Samuelson theorem and specific-factors model. Model specifications are estimated using data for each of nine manufacturing industries across 12 OECD countries horn 1970-85. In the Stolper-Sarnuebon ~pecilication, a rising price in an industry causes the capital-labor ratios to adjust a c c o r h g to factor intensity. In the specilic-factors model, e higher price in an industry is expected to increase labor input. There are data available for many industries, suggesting a model with many goods. When the prices of goods a e exogenously given at world levels, however, a production model with two factors shared by each industry is overdetermined. Inttoducing demand allows a tractable model, but relaxes the intensity links. The present paper isolates each industry and aggregates the others into a single sector, developing a series of two-sector models to coincide with the Stulper-Samuelson theorem. Learner (1994a) argues that an idea needs nn issue, a theory, and evidence to survive. The Stolper-Samuelson theorem meets Lhe Erst two conditions. but lacks much of the third. The theorem was originally presen(ed and applied largely in the context of
This paper investigates the effects of the real exchange rate and income on US tourism export rev... more This paper investigates the effects of the real exchange rate and income on US tourism export revenue and import spending with quarterly data for the floating exchange period from 1973 to 2010. Separate estimates of export revenue and import spending functions prove more revealing than estimates of the trade balance. Vector autoregressions capture dynamic adjustments to exchange rate and income shocks. Depreciation raises US tourism export revenue but does not affect import spending. US tourists going abroad respond to income while foreign tourists coming to the US do not.
A simple three-factor, two-good general equilibrium model, allowing complementarity in production... more A simple three-factor, two-good general equilibrium model, allowing complementarity in production, is examined. Conclusions of general equilibrium economics with two factors must be reinterpreted and qualified when complementarity is possible. Sign patterns of how changing factor endowments affect outputs and how changing prices affect factor payments are uncovered for a small open economy. Results should prove valuable to a wide range of economists interested in extending general equilibrium analysis to include complementary factors of production.
This paper investigates exchange rate effects on US tourism trade in structural vector autoregres... more This paper investigates exchange rate effects on US tourism trade in structural vector autoregressive models with quarterly data for the floating exchange rate from 1973 to 2007. Tourism export revenue and import spending are examined along with the tourism trade balance. Depreciation raises the US tourism trade balance with a unit elastic effect after six quarters with no evidence of J-curve behaviour. Only export revenue is marginally sensitive to the exchange rate. Foreign travel is a luxury good for US tourists, while travel to the USA is a normal good for foreign tourists.
This article examines a tariff on an imported factor of production in a small, open economy with ... more This article examines a tariff on an imported factor of production in a small, open economy with two domestic factors. Suppose the imported factor is intensive in export production, and labor in import competing production. The factor tariff would reduce export production and trade, but raise the wage. The flexibility afforded by the three factors raises the possibility that import spending might fall more than the decrease in output. That is, the factor tariff could raise income. Inelastic demand for the imported factor and a high labor share of income favor increased income.
This chapter develops a three country model of constant cost production and trade based on produc... more This chapter develops a three country model of constant cost production and trade based on productivity and country size. Trade may be limited to two of the countries assuming that gains from trade are necessary for trade to take place. A small country may produce too little to offer gains from trade to the other two. At the other extreme, a country may be too productive to gain from trade. Regional trade is observed if the countries with similar productivities are located closer together, a testable hypothesis.
This paper examines empirical links between relative prices and bilateral trade based on constant... more This paper examines empirical links between relative prices and bilateral trade based on constant cost trade theory. The global models are built from the World Input-Output Database WIOD aggregated to three, four, and five regions and goods. The simple model assumes relative labor shares are relative prices and average relative price is the terms of trade. Trade patterns are complex among partially specialized regions. Model predictions are compared to observed net exports in seven different aggregations. Regression analysis also examines the effects of relative prices on the total bilateral net exports across models.
Fixed effect time series effect models are used to analyze the spatial and time series pattern of... more Fixed effect time series effect models are used to analyze the spatial and time series pattern of the effects of subsidies on manufacturing income across twenty counties in Alabama from 1970 to 1999. The results from the fixed effect model indicate that median populated counties performed better than larger and smaller counties while the time series effect model indicates that the impact of subsidies is marginal across the state over time.
This paper estimates trends in factor price elasticities adding energy Btu input to fixed capital... more This paper estimates trends in factor price elasticities adding energy Btu input to fixed capital assets and the labor force in annual US data from 1949 to 2013. Second order effects improve estimates of the production function in log differences. The unrestricted estimates test for concavity and constant returns to scale. Adding energy input reduces the apparent productivity of labor and reveals strong capital-labor factor price elasticities with pronounced trends. Energy and labor trend to become weak complements. These trends offer insight into recent economic history and keys to predicting the future as well.
Rising foreign income increases tourism demand and wages if tourism is labour-intensive relative ... more Rising foreign income increases tourism demand and wages if tourism is labour-intensive relative to capital. This paper adds a third factor of production, skilled labour or natural resources, to delve more deeply into the potential income redistribution in general equilibrium due to rising foreign income. In a small open economy producing tourism and an import competing good, the wage may fall in spite of the expanding tourism sector if capital is a technical complement with the third factor. A model including a traditional export is also examined, as is a specific factors version of the model. The possibility of a falling wage with expanding labour-intensive tourism relates to a number of policy issues in touristic countries.
The theory of production and trade is motivated in large part by the effects of tariffs on wages.... more The theory of production and trade is motivated in large part by the effects of tariffs on wages. General equilibrium models that examine these effects include constant costs, factor proportions, specific factors, imperfect competition and noncompetitive factor market. The present paper reviews the effects of tariffs on wages in small open economies across this broad range of trade theory. From this wide perspective, tariffs support wages only under narrow sets of assumptions. There should be no presumption that tariffs support wages.
This paper estimates exchange rate sensitivity of US cotton imports for three textile producers w... more This paper estimates exchange rate sensitivity of US cotton imports for three textile producers with floating or regularly adjusting exchange rates since the 1970s, Bangladesh, Indonesia, and Thailand. The cotton import market model includes mill use, US production cost, and an alternate supply. Empirical analysis examines effects of the Asian financial crisis. Exchange rate behavior and sensitivity varies across the three importers. Aggregation hides information on market reaction. Changes in the rate of depreciation have stronger effects than changes in the level of the exchange rate.
When Akira Takayama passed away this winter, the economics profession lost one of its most produc... more When Akira Takayama passed away this winter, the economics profession lost one of its most productive and most passionate members. This memoir catalogues Professor Takayama's publications and offers some insight into his contributions and personality from a few of his colleagues. 2. A Synopsis of Akira's Life and Career Akira was born in Yokohama in 1932, escaped the firebombing during the war, and studied science during Japan's reconstruction. He received his Bachelor of Science degree at the International Christian University in 1957. Akira then travelled by ship to attend the University of Rochester. He studied under Lionel McKenzie, and finished his dissertation under Ron Jones in 1962, the first Ph.D. in economics awarded at Rochester. Akira returned to Tokyo and earned a second Ph.D. from Hitosuhashi University in 1964. Akira held positions at the International Christian University (1962-4), the University of Manchester (1964-5), Purdue University (1 966-go),
ABSTRACT A sizeable literature examines exchange rate pass-through to disaggregated import prices... more ABSTRACT A sizeable literature examines exchange rate pass-through to disaggregated import prices, but few micro-studies focus on consumer prices. This article explores exchange rate pass-through to consumer prices in South Africa, for 2002–2007, using a unique data set of highly disaggregated data at the product and outlet level. The empirical approach allows pass-through to be calculated over various horizons for different goods and services. The heterogeneity of pass-through for food sub-components is considerable. Switches between import and export parity pricing of maize are found significant for five out of ten food sub-components. Using actual weights from the CPI basket, overall pass-through to the almost 63 per cent of the CPI covered is about 30 per cent after two years, and higher for food.
When Akira Takayama passed away this winter, the economics profession lost one of its most produc... more When Akira Takayama passed away this winter, the economics profession lost one of its most productive and most passionate members. This memoir catalogues Professor Takayama's publications and offers some insight into his contributions and personality from a few of his colleagues. 2. A Synopsis of Akira's Life and Career Akira was born in Yokohama in 1932, escaped the firebombing during the war, and studied science during Japan's reconstruction. He received his Bachelor of Science degree at the International Christian University in 1957. Akira then travelled by ship to attend the University of Rochester. He studied under Lionel McKenzie, and finished his dissertation under Ron Jones in 1962, the first Ph.D. in economics awarded at Rochester. Akira returned to Tokyo and earned a second Ph.D. from Hitosuhashi University in 1964. Akira held positions at the International Christian University (1962-4), the University of Manchester (1964-5), Purdue University (1 966-go),
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