Craig R. MacPhee

Gravity models: a reformulation and an application to discriminatory trade arrangements

Gravity Models are used to estimate trade flows from 162 countries into 11 major importing countries for 1976, counting the EC as one. The main theories underlying gravity models are reviewed and a new gravity model is derived from a linear expenditure system. A major innovation of this model is that both tariffs and dummy variables for discriminatory arrangements are incorporated. Price variables are also explicitly included in the model. The tariff and the dummy variables are found to be statistically significant and this indicates that previous gravity model studies which used dummies to estimate the trade benefits of preferential tariffs may not have accurately estimated the effects of the preferences. The price variables generally are also found to be statistically significant, which casts doubt on the homogeneous-goods assumption underlying the purchasing power parity hypothesis. Some significant differences in the estimates were found when separate equations were regressed for the EEC and the US.

From Marx to Markets: Reform of the University Economics Curriculum in Russia

This article describes some of the major changes that have occurred in the university economics curriculum in Russia since 1989, with a focus on Moscow State University. The problems and possibilities relating to curriculum reform beyond the introductory course are considered, with the general observation that considerable time will be required for complete reform.

Export externalities and economic growth

Feder formulated the first model with an explicit mechanism connecting international trade and economic growth. We present new econometric estimates of this unique model for 30 developing countries studied by Feder. We replicate Feders 1964 – 73 cross-section estimates for 1974 – 83 and 1984 – 93 and find that the export variables lose significance and that the model has less explanatory power overall. We also try to improve on time-series estimates by Ram and find that the coefficient of Feders total factor productivity differential in favour of the export sector was positive and significant for 18 of the 30 countries. The export externality coefficient proved to be positive and significant in 13 countries although significant multicollinearity occurs in the regressions for eight of the 13. Comparisons of the results among countries suggest that the impact of exports on growth depends on population size, trade orientation, and the importance of manufacturing.

Some economic determinants of Third World professional immigration to the United States: 1972-87

Abstract We estimate reduced form equations for immigration to the United States by engineers, natural and social scientists, and physicians from 18 Third World countries. Explanatory variables include income, real GDP growth, graduation in the United States, and study in each country of origin. Additional explanatory variables are foreign student enrollment in the United States, lagged immigration, total immigration from each country, and a dummy variable which accounts for implementation of restrictions on permanent visas in 1972–1973. Results generally conform to expectations, but differ across occupations and with model specification. Most income statistics are unexpected, however, and the strong correlation of US income with graduation in the United States suggests that there is a simultaneity problem in models which include income. Because immigration appears to respond to labor shortages in the United States and surpluses in countries of origin, our results suggest that US immigration quotas have not prevented Third World professionals from responding to economic incentives.

The trade effects of the U. S. generalized system of preferences

ConclusionSubsequent rounds of multilateral tariff reductions and changes in the GSP and other trade arrangements supersede the analysis presented here, but this study still provides some guidance to future analysis of tariff concessions. The review of the literature suggests a need for greater precision in methods and data. The new technique employed here would appear to be appropriate for future analyses of multilateral trade liberalization and of proliferating free trade areas. Our results indicate that extremely optimistic and pessimistic estimates of GSP trade effects should be regarded with skepticism. The GSP has probably had a modest positive impact on LDC exports to the United States.

The consistency of partial equilibrium estimates of trade creation and diversion

ZusammenfassungDie Konsistenz von SchÄtzungen der Handelsschaffung und-ablenkung mit Modellen des partiellen Gleichgewichts. - Der Verfasser wertet mehrere empirische Studien aus, die sich mit den Auswirkungen der Zollsenkungen im Rahmen der Tokyo-Runde auf PrÄferenzabkommen befassen und zu unterschiedlichen Voraussagen gekommen sind. Als Ergebnis stellt er fest, da\ einige der ElastizitÄten, die in den empirischen Modellen benutzt werden, mit deren Grundannahmen nicht vereinbar sind. Nachdem konsistente Werte für die ElastizitÄten abgeleitet worden sind, werden diese Werte eingesetzt, um zu untersuchen, wie sich die empirischen SchÄtzungen verÄndern würden. Auf die Aggregationsprobleme in derartigen Untersuchungen wird ebenfalls eingegangen.RésuméLa consistance des estimations d’équilibre partiel de la création et diversion de commerce. - L’auteur évalue quelques études empiriques qui ont prédit des résultats différents pour des accords préférentiels tarifaires comme résultat des réductions tarifaires suivant la ronde Tokyo. Il trouve que quelques des élasticités appliquées dans les modèles empiriques ne sont pas consistantes avec leurs suppositions sous-jacentes. Il dérive des valeurs consistantes pour les élasticités et les applique pour démontrer comment quelques estimations empiriques pourraient différer. L’importance des problèmes d’agrégation dans telles études est aussi évaluée.ResumenLa consistencia de estimaciones de equilibrio parcial de creación y desvío de comercio. - El autor évalÚa varios estudios empiricos que han predicho distintos resultados para acuerdos de comercio preferencial como consecuencia de la reducción de aranceles en la Rueda de Tokio. Algunas de las elasticidades usadas en los modelos empiricos resultan ser inconsistentes con los supuestos sobre los que están basadas. Se derivan valores consistentes para estas elasticidades y se los utiliza para determinar la medida en la cual podrían diferir algunas estimaciones empíricas.

Economic Education and Government Reform in the Republic of Georgia

Abstract The author describes public education through the media and training for government officials and for journalists undertaken as part of economic reform efforts in the Republic of Georgia of the former Soviet Union. The article concludes with a discussion of the necessary conditions for success of these broad-based educational efforts.

Has the European Community GSP increased LDC exports

Hypothesized differences in mean changes in shares of European Community (EC) import markets over the period 1976-84 are tested for each of 36 less-developed countries. Means are calculated for cases in which MFN tariffs are re-established and for cases in which duty-free treatment is restored under the EC generalized system of preferences. They are compared with means for cases in which tariffs remained constant. We attempt to control for both product-specific and cyclical influences on imports. In contrast to some previous results, our findings suggest that denial (restoration) of preferential treatment, i.e. a tariff increase (decrease), has its expected negative (positive) effect.