David Hummels, Volodymyr Lugovskyy, and Alexandre Skiba examine: The Trade Reducing Effects of Market Power in International Shipping (NBER Working Paper 12914, February 2007):
Developing countries pay substantially higher transportation costs than developed nations, which leads to less trade and perhaps lower incomes. This paper investigates price discrimination in the shipping industry and the role it plays in determining transportation costs.
In the presence of market power, shipping prices depend on the demand characteristics of goods being traded. We show theoretically and estimate empirically that shipping firms charge higher prices when transporting goods with higher product prices, lower import demand elasticities, and higher tariffs, and when facing fewer competitors on a trade route.
These characteristics explain more variation in shipping prices than do conventional proxies such as distance, and significantly contribute to the higher shipping prices facing the developing world. Markups increase shipping prices by at least 83 percent for the mean shipment in Latin American imports.
Our findings are also important for evaluating the impact of tariff liberalization. Shipping firms decrease prices by 1-2 percent for every 1 percent reduction in tariffs.
Impact of Climate Change on Golf Playable Days in the United States (WeatherBill, Inc., Feb 22, 2007).
WeatherBill, Inc. published a study today at the National Golf Course Owners Association annual conference analyzing historical weather data to determine changes and trends in annual Golf Playable Days* (GPD). The study concludes that U.S. GPD are increasing in 95 cities, primarily due to higher average temperatures. The study also identifies increasingly rainy trends in the Northeast and Southeast, a drier Southwest and West and increasingly uncertain weather in 33 cities….
“The average number of Golf Playable Days across the U.S. is 268 a year,” says David Friedberg, CEO of WeatherBill. “In the West and South, given the extended season, the average golf course can expect 297 playable days a year vs. the 226 days in the Northeast and Midwest.” The study includes a reference table showing the range of GPD in 195 cities as well as the 30 year trend in both GPD and weather certainty. The guide should be a useful financial planning tool for golf course owners and managers.
Source: Docuticker .
The U.S. Fish and Wildlife Service (FWS) wants to list the Polar Bear as threatened under the Endangered Species Act: U.S. Wants Polar Bears Listed as Threatened (Washington Post, Juliet Eilperin, Dec 26, 2006).
The FWS proposed rule makes it clear that global warming and the shrinking Arctic ice cap plays a big role in this: Polar Bear listing proposed rule (January 9, 2007). Here is the FWS web page on polar bear issues: Polar Bear Conservation Issues.
A couple of days ago I posted on related problems faced by walrus: Bad news for walruses (February 25). That post was based on a story by Dan Joling in the Anchorage Daily News.
Joling had a new article today, on the problems global warming poses for ringed seals - an important polar bear prey: Melting snow lairs put seal pups in peril (Feb 26, 2007)
What should the U.S. do about the Chinese currency?
New Economist turns out to be a romantic, beginning a series on economist couples shortly after St. Valentine's Day.
Here's the introductory post: Economics: a family business? and here is the first couple: Economist couple of the week: George Akerlof & Janet Yellen (Feb 19).
The blog FarmPolicy.com will be useful if you are interested in the Doha Round, the upcoming Farm Bill, or other agriculture and trade-related issues:
John Palmer posts some student responses to math problems: EclectEcon Exam Answers - these kids knew they were going down, but they went down with style (and a certain amount of gallows humor) - (EclectEcon, Feb 24).
At least in part, and how to read Adam Smith: "Two Months Before the Mast of Post-Modernism" Recycled. (Grasping Reality with Both Hands: Brad DeLong's Semi-Daily Journal, Feb 21).
The Congressional Research Service (CRS) released three trade- and FDI-related reports in early February:
I learned about these at Docuticker.
It doesn't seem right that the average tariff on imports from the U.K. is 0.8%, while the average tariffs of imports from Bangladesh is 15.2%, and the average for Cambodia is 16.9%.
The Progressive Policy Institute lays it out: America's Tariffs Hit Cambodia and Bangladesh Hardest (Feb 21).
Is the cavalry on the way?
...Some help may be on the way, though. Last week, Senators Dianne Feinstein (D-California) and Gordon Smith (R-Oregon) introduced a proposal, known as the "Tariff Relief Assistance for Developing Economies Act," to grant 15 low-income countries in Asia, the Pacific, and the Muslim world exemptions from tariffs.... Rep. Joe Crowley is their House partner and founder of the Bangladesh caucus.
Greg Mankiw explains. And, as a bonus, answers the question, "...what are economic policy advisers paid for?": Growth Regressions and Policy Advising. (Feb 18).
The U.S. is better off because of foreign direct investment. However, specific investments can raise security issues. Moreover, they can lead to public anxiety about security, and political opposition to foreign investment. Many security issues can be addressed through changes to the deals being negotiated; residual public anxiety can be addressed in part through a security-vetting process that inspires confidence.
"Marshall Jevons," over at the The Bayesian Heresy, reports that the World Bank has just released a country economic memorandum (CEM) on Mauritius: A New CEM on Mauritius (Feb 19, 2007). You can access it through his post.
This report was apparently finalized in May 2006, but its preface notes that it may already be somewhat out of date.
Of course, nothing is the last word for long. The FY 2006/2007 budget announced bold and sweeping reforms. In light of these, parts o f the CEM may already be out of date. Indeed, the budget measures curbing tax expenditures, reforming the pension system, simplifying business registration procedures and dismantling the EPZ went far beyond anything envisaged by the CEM. However, many o f the CEM’s ideas are still pertinent and in some areas such as education and science and technology policy, the agenda has not yet begun to be addressed.
Never have economic ideas found such resonance in a Mauritian Budget as in the one presented on June 9 by Finance Minister, Mr Sithanen, for fiscal year 2006-2007. Good Economics offers the right incentives, recognises the importance and limits of the State, realises the constraints, threats and possibilities of modern times. Bad Economics yields the wrong incentives, delves into ideological debates, attempts to perpetuate the rents and privileges associated with bygone eras. Good Economics has finally arrived....
Rahim's post goes into the budget in some detail.
Note: post revised Feb 21. Originally said "out of date" rather than "somewhat out of date." I didn't mean to imply that this wasn't a useful report.
Bridges Trade BioRes reports, "BELUGA CAVIAR BACK ON THE MARKET"
House Ways and Means Committee leaders are developing legislation to (a) push the Administration to take a stronger line on Chinese subsidies, and (b) address allegations of currency manipulation for competitive advantage (Ways and Means is the key House committee dealing with trade). Gregg Hitt reports (House Leaders to Push Tariffs on China Exports, Wall Street Journal, Feb 15):
On February 7, the House Financial Services Committee held hearings on the process the U.S. uses to review potential foreign direct investments (FDI) for security implications.
Here is the web page with links to testimony and Congressional statements: House Financial Services Committee: Committee on Foreign Investment in the United States (CFIUS), One Year After Dubai Ports World.
Yesterday, Greg Ip pointed to recent Administration efforts to highlight the importance of FDI to the U.S. economy (U.S. May Be Losing Its Appeal To Foreign Investors, Report Warns, Wall Street Jounal, February 12 - subscription required).
Ip specifically points to Chapter 8 in this year's Economic Report of the President (International Trade and Investment), and a speech by Deputy Treasury Secretary Robert M. Kimmitt in Frankfurt: On Open Investment: The Foundation of the German-American Economic Relationship (Feb 12).
Alaska's exports reached $4 billion last year, reports Bill White: Alaska 2006 exports could top $4 billion (Anchorage Daily News, Feb 6 - free registration required):
Seafood (~$2 billion), minerals, especially zinc (~$1 billion), energy a distant third, and fertilizer way behind.
Exports to China have quadrupled since 2001, topping $470 million last year through November, Wolf [Greg Wolf, Executive Director of the World Trade Center Alaska - Ben] said.
"China's economic rise and its voracious appetite for natural resources have been the predominant force influencing Alaska's export growth over the past five or six years," he said...
Japan got about 25 percent of the exports, based on value, followed by South Korea at 18 percent, China at 12 percent and Canada at 11 percent...
European countries getting Alaska products include Germany, Spain, the Netherlands, Switzerland and Belgium.
Doug Campbell examines anti-dumping for the Richmond Fed's Region Focus: Trade Wars (Spring, 2006). Campbell's paper is a nice overview, and uses an anti-dumping petition on wooden bedroom furniture for a case study. This industry has been hammered by foreign competition, but dumping doesn't appear to have been central to its problems.
Anti-dumping measures have been costly:
Rachel Dodes has a story in this weekend's Wall Street Journal about the impact of globalization on modeling wages: Strike a Pose, Count Your Pennies (Feb 3 - subscription required).
The supply of models to European and American markets is shifting out:
The Bush Administration released its proposals for the 2007 Farm Bill today: Bush Farm Proposal May Snag On Congressional Roadblocks (Greg Hitt, Wall Street Journal, Feb 1):