What tariffs would countries impose if they did not have to fear any retaliation? What would occur if there was a complete breakdown of trade policy cooperation? What would be the outcome if countries engaged in fully efficient trade negotiations? And what would happen to trade policy cooperation if the world trading system had a different institutional design? While such questions feature prominently in the theoretical trade policy literature, they have proven difficult to address empirically, because they refer to what-if scenarios for which direct empirical counterparts are hard to find. In this chapter, I introduce research which suggests overcoming this difficulty by applying quantitative models of commercial policy.
How does a country's productivity growth affect worldwide real incomes through international trade? In this paper, we take this classic question to the data by measuring the spillover effects of China's productivity growth. Using a quantitative trade model, we first estimate China's productivity growth between 1995 and 2007 and then isolate what would have happened to real incomes around the world if only China's productivity had changed. We find that the spillover effects are small for all countries in our sample, ranging from a cumulative real income loss of at most −0.2% to a cumulative real income gain of at most 0.2%.
How large are optimal tariffs? What tariffs would prevail in a worldwide trade war? How costly would a breakdown of international trade policy cooperation be? And what is the scope for future multilateral trade negotiations? I address these and other questions using a unified framework which nests traditional, new trade, and political economy motives for protection. I find that optimal tariffs average 62 percent, world trade war tariffs average 63 percent, the government welfare losses from a breakdown of international trade policy cooperation average 2.9 percent, and the possible government welfare gains from future multilateral trade negotiations average 0.5 percent.
I present a stylized theory of regional development in which regional ‘first nature’
characteristics do not map uniquely into regional outcomes. The ‘second nature’ force
is social learning about fixed but unknown regional characteristics which can bring
about self-reinforcing regional development. The key difference from other agglomeration
economies is that the extent of local economic activity only influences beliefs
about productivity but not actual productivity so that there are no localized external
increasing returns.
I highlight two advantages of adopting a 'new trade' approach to trade negotiations. First, it allows for a view of trade negotiations in which producer interests play a prominent role. And second, it lends itself naturally to quantitative analyses of non-cooperative and cooperative trade policy. My specific focus is on profit shifting effects through which countries can gain at the expense of one another.
Der Einsatz von Maschinen, Computern und Robotern hat nicht zu einem deutlichen Rückgang der Beschäftigung geführt. Hingegen spaltet sich der Arbeitsmarkt in gut und schlecht bezahlte Berufe.
Der Wettlauf der Eitelkeiten kann zu einer höheren kollektiven Wirtschaftsleistung führen. Er kann die Menschen aber auch unglücklich machen und zu fahrlässigem Konsum verleiten.
Ehrlichkeit spielt im sozialen und wirtschaftlichen Leben eine zentrale Rolle. Ohne sie werden Versprechen nicht eingehalten, Verträge nicht erfüllt oder etwa Steuern nicht bezahlt. Trotz dieser gesellschaftlichen Bedeutung sind die biologischen Grundlagen der Ehrlichkeit kaum bekannt. Nun zeigen Forscher vom Institut für Volkswirtschaftslehre gemeinsam mit Kollegen aus Chicago und Boston, dass ehrliches Verhalten durch Hirnstimulation verstärkt werden kann.
In recent years, the banking industry has witnessed several cases of excessive risk-taking that frequently have been attributed to problematic professional norms. We conduct experiments with employees from several banks in which we manipulate the saliency of their professional identity and subsequently measure their risk aversion in a real stakes investment task. If bank employees are exposed to professional norms that favor risk-taking, they should become more willing to take risks when their professional identity is salient. We find, however, that subjects take significantly less risk, challenging the view that the professional norms generally increase bank employees’ willingness to take risks.
Multiple types of reward, such as money, food or social approval, are capable of driving behavior. However, most previous investigations have only focused on one of these reward classes in isolation, as such it is not clear whether different reward classes have a unique influence on instrumental responding or whether the subjective value of the reward, rather than the reward type per se, is most important in driving behavior. Here, we investigate behavior using a well-established reward paradigm, Pavlovian-to-instrumental transfer (PIT), and three different reward types: monetary, food and social rewards. The subjective value of each reward type was matched using a modified Becker-DeGroot-Marschak (BDM) auction where subjective reward value was expressed through physical effort using a bimanual grip force task. We measured the influence of reward-associated stimuli on how participants distributed forces between hands when reaching a target effort range on the screen bimanually and on how much time participants spent in this target range. Participants spent significantly more time in the target range (15% ± 2% maximal voluntary contraction) when a stimulus was presented that was associated with a reward used during instrumental conditioning or Pavlovian conditioning compared to a stimulus associated with a neutral outcome (i.e., general PIT). The strength of the PIT effect was modulated by subjective value (i.e., individuals who showed a stronger PIT effect rated the value of rewards more highly), but not by reward type, demonstrating that stimuli of all reward types were able to act as appetitive reinforcers and influenced instrumental responding, when matched to the same subjective reward value. This is the first demonstration that individually matched monetary, food and social rewards are equally effective as appetitive reinforcers in PIT. These findings strengthen the hypotheses that the subjective value is crucial for how much reward-associated stimuli influence behavior.
