W. Charles Sawyer

An empirical examination of the role of vertical product differentiation in north-south trade

ConclusionsOur results indicate that the general line of reasoning embodied in the recently developed models of North-South IIT would seem to be valid. The various measures of income and size similarity do seem to affect North-South IIT in the theoretically predicted way. Further, this type of trade is positively impacted by the direction of quality differences and, to a lesser degree, the extent of quality differences. Finally, it would appear that modeling this type of trade on a bilateral basis using data detailed by both industry and country has not only theoretial appeal, but is empirically useful.The results, however, do not address the mechanism which generates these quality differences between the exports of the North and South. The theoretical models use different assumptions concerning the process which generates the quality differences. Such differences may be related to capital abundance as in Falvey [1981]; a Ricardian form of comparative advantage as in Flam and Helpman [1987]; or a complex combination of the two.15 Some preliminary evidence on the role of quality differences has been given in this paper. The difficult task of explaining what generates these differences is an important issue left unaddressed at this point.

The demand for imports and exports in the U.S.: A survey

One of the more important issues in applied international economics is the extent to which trade flows adjust to changes in income, relative prices, and exchange rates. In this paper, the literature on the empirical estimation of the demand for imports and exports for the U.S. is surveyed. More precisely, this paper updates earlier surveys by Stern, Francis, and Schumacher (1976) and Goldstein and Khan (1985).

An Empirical Examination of the Structural Stability of Disaggregated U.S. Import Demand

We present three related types of evidence on U.S. import demand. First, aggregate import demand is reestimated for comparison with previous research. Second, we provide updated estimates of import demand for five economic classes: crude foods, crude materials, manufactured foods, semi- manufactures, and finished manufactures. Finally, each of these import demand functions is tested for any evidence of structural instability, and in those cases where instability is detected, the demand equations are reestimated along the lines suggested by the stability tests. Copyright 1989 by MIT Press.

The Adjustment of Canadian Import Demand to Changes in Income, Prices, and Exchange Rates

This paper provides estimates of the sensitivity of Canadian import demand to changes in income, prices, and exchange rates. The model specification allows for the consideration of long-run elasticities as well as the dynamics of short-run adjustment of imports to changes in these variables. The estimated long-run elasticities obtained are similar to those in previous studies. It is also shown that Canadian imports react quickly to changes in either foreign or domestic prices, but that the reaction to changes in exchange rates is much slower.

Latin American trade elasticities

An important issue in applied international economics is the extent to which trade flows adjust to changes in income, relative prices, and exchange rates. While there have been numerous surveys regarding merchandise trade elasticities in industrial economies such as Japan and the United States, relatively little work has been completed with respect to developing regions of the world. Material in this article examines the literature on empirical estimates of import and export elasticities published for Latin America. (JEL F140)

Alternative empirical estimates of trade creation and trade diversion: A comparison of the Baldwin-Murray and Verdoorn models

ZusammenfassungAlternative empirische SchÄtzungen von Handelsschaf-fung und Handelsumlenkung. Ein Vergleich der Modelle von Baldwin-Murray und von Verdoorn. - In diesem Aufsatz werden die Eigenschaften zweier Modelle untersucht, die üblicherweise benutzt werden, um ex ante Handelsschaffung und Handelsumlenkung zu schÄtzen. Die Analyse zeigt, da\ beide Modelle hinsichtlich der Handelsschaf-fung zu identischen Ergebnissen führen. Im Fall der Handelsumlenkung dagegen können die SchÄtzungen je nach dem benutzten Modell differieren, was damit zusammenhÄngt, da\ unterschiedliche Annahmen über das Ausma\ der Substituierbarkeit von Importen aus begünstigten und aus nicht begünstigten LÄndern gemacht werden. Die Unterschiede in den SchÄtzungen werden anhand eines empirischen Beispiels untersucht. Au\erdem wird gezeigt, da\ bei Benutzung der Verdoornschen Annahmen das Ausma\ der Handelsumlenkung auch ohne ausdrückliche Kenntnis der SubstitutionselastizitÄt geschÄtzt werden kann.RésuméEstimations alternatives empiriques de la création et du détournement de commerce: une comparaison des modèles de Baldwin-Murray et Verdoorn. - Cet article analyse le caractère de deux modèles normalement utilisés pour estimer ex ante la création et le détournement de commerce. L’analyse indique que les deux modèles produisent des estimations identiques en ce qui concerne la création de commerce. Cependant, à cause des suppositions un peu différentes concernant le degré de la substitutabilité entre les importations des pays préférés et non-préférés, les estimations du détournement de commerce peuvent différer selon le modèle utilisé. Puis ces différences sont examinées en appliquant un modèle empirique. Il est aussi démontré que le détournement de commerce peut Être estimé sans savoir explicitement les élasticités de substitution si l’on applique le modèle de Verdoorn.ResumenEstimaciones empiricas alternativas de la creación y desviación del comercio: una comparación del modelo de Baldwin y Murray con el de Verdoorn. - En este trabajo se analizan las propiedades de dos modelos comÚnmente utilizados para estimar ex ante la creación y desviación del comercio. Empero, debido a supuestos ligeramente diferentes en relación al grado de sustitutabilidad entre importaciones de países preferidos y no preferidos, las estimaciones de la desviación del comercio pueden diferir dependiendo del modelo utilizado. Estas diferencias son examinadas en un ejemplo empírico. También se muestra que la desviación del comercio puede ser estimada con los supuestos de Verdoorn, mas sin conocimento explícito de la elasticidad de sustitución.

Regional Exchange Rate Indexes for the United States

In this paper we construct exchange rate indexes for the nine U.S. Bureau of the Census regions. The results indicate there are nontrivial differences between them and an identically created overall U.S. exchange rate index. The national index is cointegrated with only two of these regional indexes, and in a Granger sense, it is causing one regional index. In addition, our results indicate that two of the regional exchange rate indexes are interchangeable with the national index. These results show that researchers investigating how exchange rate changes affect regional exports or regional economic growth should be cautious in making inferences based upon a national exchange rate index.

Revealed Comparative Advantage Indexes for Regions of the United States

This study identifies the pattern of comparative advantage for U.S. regions from actual trade performance as indicated by the industry composition of exports. Revealed comparative advantage patterns are also determined using production data. Dynamic changes in comparative advantage patterns are identified using a methodology developed by Kreinin and Plummer (1994a). Comparative advantage patterns and the degree of structural change in exports vary considerably across regions. Results will assist U.S. regions and states in formulating effective export promotion strategies.

Contribution, attribution and the assignment of intellectual property rights in economics

Purpose – Within the area of economics, the value attached to highly-ranked journal publications, such as the American Economic Review, Journal of Political Economy and Quarterly Journal of Economics, in tenure, promotion, and merit pay processes is often several times greater than that of second-tier publications, such as Economic Inquiry and the Southern Economic Journal. As a result, one would expect that author(s) will put forth relatively more production “effort” in order to gain acceptance in a top-tier journal. The additional production effort may come in the form of making the manuscript available to a larger number of outside readers, perhaps via seminars and conferences. This study aims to examine whether the economics research production process differs between top- and second-tier journal outlets. Design/methodology/approach – Data are collected from feature articles published in two top-tier and two second-tier economics journals for the period 1995-1999, inclusive. Means difference tests on various “production statistics” across journals are conducted/presented. Findings – Tests presented in this study indicate that the fraction of the “scientific team” whose contributions are recognized in the acknowledgment footnote of research articles appearing in top-tier economics journal outlets is, on average, greater than that of articles appearing in second-tier economics journal outlets. Originality/value – By examining within-discipline aspects of intellectual property rights assignment in economics, our study extends the work of Laband (2002), which examined interdisciplinary differences (i.e. agricultural economics versus economics) in the assignment of intellectual property rights.

The effects of exchange rate changes on prices and quantities in U.S. foreign trade

The recent devaluation of the dollar has had a puzzlingly slow effect on the U.S. merchandise trade balance. This article examines the effects of exchange rate changes on U.S. import and export prices and then examines the effects of price changes on trade flows. Estimates are developed for aggregate imports and exports and aggregate imports and exports minus crude materials and crude foods. It appears that exports respond much more quickly than imports to exchange rate fluctuations. Specifically, it may take up to three years for a real exchange rate change to fully affect the quantity of imports. These results seem more consistent with recent experience than the results of standard single-equation models which tend to indicate a much shorter lag from exchange-rate changes to changes in trade flows.