Showing papers by "Óscar Afonso published in 2021"

The effects of offshoring on wages: a meta-analysis

Abstract: Offshoring, either as FDI or offshore outsourcing, is a phenomenon of increasing importance that has been widely studied in the economics literature Studies analysing the impact of offshoring on the labour market report divergent results In this paper we develop a meta-analysis of the empirical literature that estimates the effect of offshoring on wages We find that, after correcting for the presence of publication bias, the average effect is not significantly different from zero in either the origin or the destination countries We also find that the wage impact of offshoring depends on methodological characteristics of the primary studies, such as the way offshoring is measured, the nature of goods/services that are offshored, the workers’ skill level, the unit of analysis, the structure of the data, and the estimation technique

Directed technical change and environmental quality

Abstract: We propose a directed technical change model with two sectors, clean and dirty, to analyze the impact of the degree of substitutability between sectors and the degree of scale effects on the environmental quality. The technological knowledge is biased towards the clean sector; i.e., the environmental quality is improved whenever the elasticity of substitution between inputs in both sectors increases and, along with that, the economy: (i) is rich in renewable capital, (ii) has higher relative supply of clean labor under scale effects, and (iii) enjoys higher relative R&D productivity in the clean sector. The improvement in the environmental quality benefits the welfare. Moreover, the growth rate is higher in the presence of scale effects.

Inflation, Complexity and Endogenous Growth

Abstract: In this article, we argue that inflation increases complexity pertaining to knowledge production (or R&D). Then, we expand a recently developed complexity index based on entropy to include the effe...

Decoupling economic growth from emissions: the case of policies promoting resource substitution

Abstract: The relationship between the economy and the environment is not straightforward and is influenced by a multitude of factors. Ideally, economic growth would not damage environmental quality and environmental protection would not hinder economic growth. Achieving this decoupling often requires environmental policy, but the analysis of specific policy instruments and their necessary levels to achieve it is rare. In this paper, we use a stylized equilibrium model to explore distinct policy instruments under which relative decoupling and absolute decoupling between economic growth and emissions occur. In our model, final-goods production uses polluting (non-renewable) and non-polluting (renewable) resources. The government taxes emissions and subsidizes renewables production. In the empirical application, we focus on the case of electricity generation. Results show that, with a growing subsidy, relative decoupling exists. Achieving absolute decoupling is harder, but it occurs for a certain interval of the subsidy growth rate. For that purpose, the choice of the tax and subsidy growth rates is more important than the choice of the initial levels for these instruments. The choice of the subsidy growth rate indicates the prioritization between the economy and the environment. A lower subsidy growth rate favors the environment, while a higher one favors the economy. The tax growth rate dictates the distance between the output growth rate and the emissions growth rate. The higher the tax growth rate, the higher the difference between them. In sum, the government can decide between attaining higher output growth rates, higher emissions decreasing rates, or an intermediate situation.

Assessing the double dividend of a third-generation environmental tax reform with resource substitution

Abstract: Taxes often face public opposition, which hinders their implementation since people envision them as costs without a return. Taxes on emissions are one of the most common instruments to tackle environmental problems. If their revenues are used to subsidize renewables, and a double dividend is achieved, public opposition may decrease. Focusing solely on total emissions and total output to measure the first and the second dividend of a combination of policies may be misleading. Indeed, total emissions may increase with economic growth, but relative emissions may decrease, indicating the generation sector’s desired decarbonization. Hence, a wider group of indicators can provide a better insight into the desirability of environmental policies. Our work discusses alternative indicators for the first and the second dividends in the context of a third-generation Environmental Tax Reform (ETR) where emissions tax revenues are used to finance renewable energy sources. The results of our simulation model highlight the relevance of the choice of the indicators for each dividend. Considering alternative indicators provides a better insight into policy impacts. If emissions per output indicate the environmental dividend and consumers’ utility/welfare indicates the economic dividend, the ETR always provides a double dividend. If we choose the traditional indicators, the ETR may not seem particularly interesting. However, with alternative indicators, which still reflect crucial aspects of the environment-economy relationship, the ETR is desirable. Hence, we argue that the attractiveness of a certain ETR and its double dividend should be evaluated under a broader range of indicators.

The Oscar goes to … robots or humans? Competition in a directed technical change model with monetary policy

Abstract: In this paper, the Directed Technical Change model was extended to consider robotics and the monetary authority. Production, in two sectors, uses human labor and robotic labor, in addition to the i...