Joaquim Oliveira Martins

Growth, Reform Indicators and Policy Complementarities

In order to assess the growth implications of policy complementarities, this paper applies second-best results to reform indicators. During the transition from central planning to EU integration, which corresponds to a policy cycle, a complementarity index based on structural indicators compiled by the European Bank for Reconstruc- tion and Development (EBRD) decreases and then increases while the level of reforms tends to rise throughout. Corrected for initial conditions, the extent of macroeconomic stabilization and endogeneity, the level of reforms and changes in their complementarity are found to be positively related to output growth. The study uses panel data for 27 countries between 1989 and 2004.In order to assess the growth implications of policy complementarities, this paper applies second-best results to reform indicators. During the transition from central planning to EU integration, which corresponds to a policy cycle, a complementarity index based on structural indicators compiled by the European Bank for Reconstruction and Development (EBRD) decreases and then increases while the level of reforms tends to rise throughout. Corrected for initial conditions, the extent of macroeconomic stabilization and endogeneity, the level of reforms and changes in their complementarity are found to be positively related to output growth. The study uses panel data for 27 countries between 1989 and 2004.

The Levels and Cyclical Behaviour of Mark-ups across Countries and Market Structures

In this paper, we present estimates of the mark-up of product price over marginal costs for the US manufacturing industries over the 1970-1992 period. The paper extends the analysis used in previous studies based on nominal productivity residuals by considering intermediate inputs and cyclical fluctuations of price margins. The estimated steady-state mark-ups are positive but moderate, generally in the range of 10-20 per cent. The results also support the hypothesis of countercyclical price margins in most manufacturing industries, especially in the presence of downward rigidities of labour inputs. This offers an appealing interpretation of the otherwise puzzling procyclicality of real wages and enables to better estimate TFP. We also discuss the role of market structures on the levels and cyclicality of mark-ups. Finally, we compare the results for the United States with those of the other G-5 countries and distinguish between fragmented and segmented industries. The latter ... Cette etude presente des estimations du taux de marge des prix sur les couts marginaux pour les industries manufacturieres sur la periode 1970-92. On elargit ici l’analyse utilisee dans des etudes precedentes, fondees sur l’utilisation des residus nominaux de productivite, en tenant compte des biens intermediaires et les fluctuations cycliques des taux de marge. Les taux de marge estimes sont positifs mais moderes, entre 10 et 20 pour cent. Les resultats confortent l’hypothese que le taux de marge sont contre-cycliques dans la plupart des industries, notamment en presence de rigidites a la baisse de l’emploi. Ceci offre une interpretation interessante pour le puzzle bien connu de la pro-cyclicalite des salaires reels et permet d’ameliorer l’estimation de la productivite totale des facteurs. En dernier, nous comparons les resultats obtenus pour les Etats-Unis avec ceux des autres pays du G-5 et introduisons la distinction entre industries fragmentees et segmentees. Cette comparaison ...

Carbon Emission Leakages: A General Equilibrium View

In December 1997, a number of countries - referred to as the Annex 1 countries - signed the Kyoto Protocol under which they agreed to ceilings on their emissions of greenhouse gases (GHGs). Such unilateral action by a group of countries has often been criticised on the grounds that it could be undermined by the existence of so-called “carbon leakages”. Carbon leakage refers to the possible rise of GHG emissions in countries that do not participate in a carbon abatement coalition. This paper provides a discussion of the key mechanisms and factors underlying the size of carbon leakages. To this aim, we use a two-region, two-final goods simplified CGE framework, incorporating three types of fossil fuels (coal, oil and low-carbon energy), international trade and capital mobility. This framework was designed to make extensive, multidimensional sensitivity analysis tractable. Indeed, a wide range of alternative assumptions and parameterisations would have been difficult or even ... En Decembre 1997, les pays dits “de l’Annexe 1” signaient le Protocole de Kyoto par lequel ils s’engageaient a limiter leurs emissions de gaz a effet de serre (GES). On a souvent mis en doute l’efficacite de ce type d’action unilaterale par un groupe de pays a cause de l’existence possible de ce que l’on peut appeler des « fuites de carbone ». Ces fuites correspondent a l’augmentation induite eventuelle des emissions de GES dans les pays qui ne participent pas a la coalition engagee dans l’effort de reduction des emissions. On trouvera dans ce document une discussion des facteurs et des mecanismes qui determinent la taille des « fuites de carbone ». Cette analyse utilise un modele d’Equilibre General Applique (EGA) simplifie comprenant deux regions, deux biens de consommation, trois types d’energie fossile (charbon, petrole et une energie a faible contenu en carbone), du commerce international et de la mobilite interregionale du capital. Il s’agit avec ce type de modele de pouvoir ...

The Drivers of Public Expenditure on Health and Long-Term Care: An Integrated Approach

This paper proposes a framework for projecting public health and long-term care expenditures. It considers demographic and other (non-demographic) drivers of expenditures. The paper extends demographic drivers by incorporating death-related costs and the health status of the population. Concerning health care, the projections incorporate income and the effects of technology cum relative prices. For long-term care, the effects of increased labour participation, reduction of informal care and Baumols cost disease are taken into account. Using this integrated approach, public health and long-term care expenditures are projected for all OECD countries. Alternative scenarios are simulated, together with sensitivity analysis. Depending on the scenarios, total public OECD health and long-term care spending is projected to increase in the range of 3.5 to 6 percentage points of GDP for the period 2005-2050.

Mark-Up Ratios in Manufacturing Industries

This paper provides estimates of mark-ups of product prices over marginal costs for 36 manufacturing industries in 14 OECD countries over the 1970- 1992 period. The estimates are based on the methodology put forward by Roeger (1995), extended to include intermediate inputs. After a discussion of analytical and data issues, the estimates are presented and shown to be smaller than those of previous studies. It is also shown that the level and dispersion of mark-ups are consistent with a priori views about characteristics of the market structure prevailing in each industry. Finally, the paper examines how mark-up estimates affect the estimated rate of growth of total factor productivity (TFP) ... Cette etude fournit des estimations sur le taux de marge des prix sur les couts marginaux pour 36 industries manufacturieres et 14 pays de l’OCDE pour la periode 1970-1992. Les estimations utilisent l’approche mise au point par Roeger (1995) amelioree pour tenir compte des biens intermediaires. L’etude commence par une discussion des problemes methodologiques et statistiques, et les estimations sont presentees. Dans l’ensemble, les taux de marge presentes ici sont beaucoup plus bas que ceux calcules dans d’autres etudes. Le niveau et la dispersion des taux de marge sont relativement coherents avec l’idee a priori sur les caracteristiques des differentes structures de marche. En dernier lieu, il est examine comment les estimations du taux de marge affectent la mesure de la productivite totale des facteurs (PTF) ...

The Policy Determinants of Investment in Tertiary Education

RÉSUMÉ .................................................................................................................................. 2 THE POLICY DETERMINANTS OF INVESTMENT IN TERTIARY EDUCATION............................... 5

A Projection Method for Public Health and Long-Term Care Expenditures

This paper proposes a new set of public health and long-term care expenditure projections until 2060, seven years after a first set of projections was published by the OECD. It disentangles health from long-term care expenditure, as well as the demographic from the non-demographic drivers, and refines the previous methodology, in particular by extending the country coverage. Regarding health care, non-demographic drivers are identified, with an attempt to better understand the residual expenditure growth by determining which share can be explained by the evolution of health prices and technology effects. Concerning LTC, an estimation of the determinants of the number of dependants (people needing help in their daily life activities) is provided. A cost-containment and a cost-pressure scenario are provided, together with sensitivity analysis. On average across OECD countries, total health and long-term care expenditure is projected to increase by 3.3 and 7.7 percentage points of GDP between 2010 and 2060 in the cost-containment and the cost-pressure scenarios respectively. For the BRIICS over the same period, it is projected to increase by 2.8 and 7.3 percentage points of GDP in the cost-containment and the cost-pressure scenarios respectively.

Efficiency and Distribution in Computable Models of Carbon Emission Abatement

The separability between efficiency and equity is an underlying assumption in most computable general equilibrium (CGE) models used to assess the costs of carbon abatement. Chichilnisky and Heal (1994) have generated a debate on both the analytical correctness of this hypothesis as well as its precise policy implications. This technical note aims to clarify the determinants of cost efficiency in standard CGE abatement models. Some simulations are provided illustrating the separability property between an efficient outcome and the distribution of income across countries. In the context of an optimal abatement model, it is also shown under which conditions equity and efficiency are not separable anymore ... La separabilite entre equite et efficacite economique est l’hypothese de base dans la plupart des modeles d’equilibre general calculable (MEGC) utilises pour evaluer les couts de reduction des emissions de carbone. Chichilnisky et Heal (1994) ont provoque un debat a la fois sur l’exactitude de cette hypothese et ses implications pour la politique economique. Cette note cherche a clarifier les determinants de l’efficacite economique dans les MEGC destines a evaluer les couts de reduction des emissions de carbone. Des simulations numeriques sont fournies a fin d’illustrer la propriete de separabilite entre efficacite et la distribution des revenus. L’etude montre aussi dans le contexte d’un modele de reduction optimale des emissions, sous quelles conditions equite et efficacite ne sont plus separables ...

GREEN - - A Multi-Region Dynamic General Equilibrium Model for Quantifying the Costs of Curbing CO2 Emissions

The OECD Secretariat has developed a multi-region, multi-sector, dynamic applied general equilibrium (AGE) model to quantify the economy-wide and global costs of policies to curb emissions of carbon dioxide (CO2). The project is called the GeneRal Equilibrium ENvironments model, hereafter referred to as GREEN. The purpose of this paper is to provide a full technical description of the GREEN model, its data base and parametrisation as of May 1991. Work is continuing to extend GREEN in several different directions to make the model more policy relevant, and a revised version of the technical manual will be issued in due course ...

Carbon Emission Leakages

Measuring the quality of governance and regulation in various ways and focusing on energy, transport and telecommunications, this paper shows that both sound governance of infrastructure investment and pro-competitive regulation in network industries are associated with stronger productivity growth in firms operating downstream.