Trade, Growth, and Economic Policy in Open Economies

by Koch, Karl-Josef; Jaeger, Klaus; Vosgerau, Hans-Jurgen

• ISBN13: 9783540637103
• ISBN10: 3540637109
• Format: Hardcover
• Copyright: 1998-04-01
• Publisher: Springer Verlag

Table of Contents

Preface	v
Part I. International Trade	3	(98)
Globalization and the Gains from Trade	3	(10)
Sven W. Arndt
1. Introduction	4	(1)
2. Specialization in the Context of Multi-Stage Production	4	(8)
3. Conclusion	12	(1)
International Competitiveness, Multinational Enterprise Technology Clubs and the Government Interface	13	(18)
Bernard Michael Gilroy
1. Introduction	13	(1)
2. Free Trade, Competitiveness and the Role of Governments in International Markets	14	(3)
3. A Brief Primer On Club Theory	17	(1)
4. International Production and Technology Clubs	18	(4)
5. Global Federalism versus Centralized Decision Making	22	(3)
6. Conclusions	25	(6)
Dual Labour Markets, Unemployment and Trade Gains/Losses in Developing Countries	31	(16)
Albert G. Schweinberger
1. Introduction	31	(2)
2. Harris-Todaro and Efficiency Wage Unemployment	33	(3)
3. The Equivalence Theorem	36	(5)
4. Unemployment and the Gains from Trade	41	(6)
Employment Policy and Real Wages	47	(6)
Ronald W. Jones
Sectoral Structure and Unemployment in Open Economies	53	(12)
Max Albert
Jurgen Meckl
1. Introduction	53	(1)
2. Efficiency Wages and Unemployment in the Short Run	54	(5)
3. Capital Accumulation and Long-Run Unemployment	59	(2)
4. Conclusions	61	(4)
Welfare Effects of Trade-Diverting Customs Unions: A Quantitative Approach	65	(18)
John S. Chipman
1. Introduction	65	(2)
2. The Formal Model	67	(7)
3. The Case of CES Utility Functions	74	(9)
Dumping and Predatory Pricing in an International Duopoly	83	(10)
Thusnelda Tivig
1. Introduction	83	(3)
2. The Model	86	(5)
3. Conclusions	91	(2)
Intra-Firm Trade and Exchange Rate Risk	93	(8)
Udo Broll
1. Introduction	93	(1)
2. A Multinational Firm	94	(1)
3. Intra-Firm Trade and Exchange Rate Risk	95	(2)
4. Concluding Remarks	97	(4)
Part II. Economic Growth	101	(66)
On the Evaluation of Social Income in a Dynamic Economy: Generalizations	101	(10)
Murray C. Kemp
Ngo Van Long
1. Introduction	101	(1)
2. A Closed Economy	102	(3)
3. Open Economies	105	(5)
4. A Final Remark	110	(1)
Intergenerational Transfers, Economic Growth and Income Distribution	111	(12)
Itzhak Zilcha
1. Introduction	111	(1)
2. The Model	112	(4)
3. Altruism and Economic Growth	116	(2)
4. Altruism and Income Distribution	118	(2)
5. Concluding Remarks	120	(3)
On the Pareto-Improving Abolition of Unfunded Public Pension Systems: An Application of Growth Theory	123	(16)
Friedrich Breyer
1. Introduction	123	(1)
2. The Basic Framework	124	(2)
3. The Results	126	(8)
4. Concluding Remarks	134	(5)
An Overlapping-Generations Model with Heterogeneous Bequest and Gift Motives	139	(28)
Klaus Jaeger
1. Introduction	139	(3)
2. The Model	142	(5)
3. The Bequest Case	147	(7)
4. The Gift Case and the Outcome of the Homogeneous- and the Heterogeneous-Taste Case	154	(7)
5. Concluding Remarks	161	(6)
Part III. Economic Policy	167	(148)
Resisting Migration: Wage Rigidity and Income Distribution	167	(14)
Assaf Razin
Efraim Sadka
1. Introduction	167	(1)
2. Wage Flexibility and Migration	168	(7)
3. The Welfare State and Migration	175	(3)
4. Conclusion	178	(3)
Effects of Monetary Policy in a Macroeconometric Disequilibrium Model for the West German Economy	181	(12)
Wolfgang Franz
Klaus Goggelmann
1. Introduction	181	(1)
2. Theory and Estimation of the Disequilibrium Model: An Introduction	182	(3)
3. Simulation of an Alternative Monetary Policy	185	(6)
4. Conclusions	191	(2)
Impact of German Discount and Lombard Policy on Financial Markets	193	(26)
Gunter Franke
Bernd Meyer
1. Introduction	193	(1)
2. Review of the Literature	194	(2)
3. The Bundesbank's Policy	196	(2)
4. Hypotheses and Test Methodology	198	(6)
5. Empirical Analysis	204	(12)
6. Conclusion	216	(3)
Bank Behavior, an Options View of Rediscount Quotas, and the Theory of Money Supply	219	(30)
Nikolaus K.A. Laufer
1. Introduction	219	(2)
2. Theoretical Framework	221	(10)
3. Main Comparative Static Results	231	(2)
4. Further Extensions and Comments	233	(3)
5. Macro-theoretical and Policy Implications	236	(2)
6. Conclusion	238	(1)
7. Mathematical Appendix	239	(10)
Global Capital Movements, Exchange Rate Risks and Monetary Policy	249	(20)
Bernd Braasch
Helmut Hesse
1. The Change in the Monetary Environment	249	(2)
2. Difficulties for National Monetary Policy	251	(7)
3. Monetary Policy and "Asset Price Inflation"	258	(3)
4. Requirements of Monetary Policy	261	(4)
5. Final Conclusions	265	(4)
Tax Policy and the Location Decision of Firms	269	(12)
Bernd Genser
Andreas Haufler
1. Introduction	269	(2)
2. An Optimal Taxation Model for a Small Open Economy	271	(4)
3. The Optimal Tax Structure	275	(2)
4. Trade Balance and Labour Market Effects	277	(1)
5. Conclusions	278	(3)
Equilibria in Tax Competition Models	281	(34)
Karl-Josef Koch
Gunther G. Schulze
1. Introduction	281	(1)
2. The Standard Tax Competition Model	282	(4)
3. Extensions	286	(8)
4. Heterogeneity and Indivisibility of Capital	294	(10)
5. Conclusion	304	(1)
6. Appendix	305	(10)
Part IV. Economic Systems and Institutions	315	(82)
Institutional Competition and Globalization	315	(16)
Carsten-Thomas Ebenroth
1. Introduction	315	(1)
2. The Interplay Between Law and Economics	316	(1)
3. The Importance of Assisting the Transformation in Eastern Europe within the Overall Context of Globalizing the Economy	317	(5)
4. The Key Role of Institutions	322	(4)
5. How Institutions Should Be Formed and Modified	326	(3)
6. Conclusion	329	(2)
An Institutional Order for a Globalizing World Economy	331	(20)
Horst Siebert
1. In the Center: Rules for the Exchange of Goods	332	(7)
2. New in the Foreground: Rules for Factor Migrations	339	(2)
3. An Old Acquaintance: Rules for the Monetary Domain	341	(2)
4. Tasks for the Future: Rules for the Use of Nature	343	(4)
5. On the Stability and Interdependence of the Orders	347	(4)
Western Economic Theory and The Transition: The Public-Choice Perspective	351	(18)
Arye L. Hillman
1. Introduction	351	(1)
2. The Orthodox Western Model: A Very Brief Overview	351	(2)
3. The Elements of the Public-choice Approach	353	(7)
4. Rents and Rent Seeking	360	(6)
5. Public Choice and Hope for a Better Future	366	(3)
The Social Cost of Rent Seeking When Victories are Potentially Transient and Losses Final	369	(12)
Joerg Stephan
Heinrich W. Ursprung
1. Introduction	369	(3)
2. The Model	372	(2)
3. Results	374	(5)
4. Static Asymmetry	379	(1)
5. Conclusions	379	(2)
Social Institutions and Local Interaction Structure	381	(16)
Siegfried K. Berninghaus
1. Introduction	381	(2)
2. Social Norms and Social Institutions	383	(2)
3. Social Institutions and Local Interaction: A Simple Example	385	(4)
4. Automata Networks as Models of Local Interaction	389	(2)
5. Stability of Norms: General Results	391	(6)
List of Contributors	397