Showing papers by "Kiel Institute for the World Economy published in 1993"

Indirect transfers in trade among former Soviet Union Republics: Sources, patterns and policy responses in the Post‐Soviet period

Abstract: THE FORMER SOVIET UNION (FSU) was composed of 15 republics which were very unevenly endowed with human, physical and natural resources. To contain regional imbalances within the Union and to integrate all republics into a tight and centrally commanded division of labour, the central government operated a scheme of vertical fiscal redistribution between the Union budget and the republican budgets. Through this system poorer republics became net receivers of direct transfers and richer republics became net donors. This scheme, which collapsed with the dissolution of the Union in 1991, channelled sizeable funds to the poorer Central Asian republics relative to their material product. Yet it failed to equilibrate large existing differences between the per capital fiscal revenues of the republics (Orlowski, 1992). Budgetary support through direct transfers, however, was not the only mechanism to redistribute income between the republics. Inter-republican trade flows in which prices for goods were set by the authorities independently from the market mechanism became the second, even more powerful channel of income transfers. Whenever such prices diverge from the level which would be determined by the free interaction of market forces, trade flows include a transfer element. Importers of overpriced goods 'donated' parts of their income to the exporting countries. So did exporters of underpriced products vis-a-vis importers. Such implicit transfers were not unique to trade between centrally planned economies. They have sometimes also been included in trade flows between market economies.' Yet, in contrast to market economies, they were a central element in trade among centrally planned economies and constituted an important mechanism of inter-state income redistribution. To abandon such a system at short notice can result in severe adjustment problems in net recipient countries, especially if import demand is price inelastic and domestic substitutes are not available. More specifically, this is because importers of oil and gas will have to pay much higher prices for their deliveries when low, preferential prices are no longer available to them, since they do not have alternative supply sources. To

Developing countries' terms of trade in manufactures, 1967–87: A note

Abstract: Terms of trade, relating only to manufactured exports and imports, are calculated for a sample of 37 industrialised and developing countries over the 1967 to 1987 period. It is found that the terms of trade movements were significantly more favourable for higher‐income countries. This result highlights the importance of export diversification as part of a development strategy.

Theorie der Strategischen Handelspolitik und Neue Wachstumstheorie als Grundlage für Eine Industrie- und Technologiepolitik

Abstract: Seit den fruhen achtziger Jahren ist es die Theorie der strategischen Handelspolitik, seit den spaten achtziger Jahren die neue Wachstumstheorie, die den traditionellen Konsens unter den Okonomen in Frage stellt, nach dem Freihandel und Verzicht auf staatliche Marktinterventionen in der Regel zur besten aller moglichen Welten fuhren. In der Theorie der strategischen Handelspolitik wurde gezeigt, das es in oligopolistisch strukturierten internationalen Markten unter bestimmten Bedingungen moglich ist, durch gezielte Protektionsmasnahmen die nationale Wohlfahrt zu erhohen; in den Modellen der neuen Wachstumstheorie hangt es ganz entscheidend von den produktionstechni­schen Parametern ab, ob staatliche Markteingriffe zur Realisierung der gesamtwirt­schaftlich optimalen Wachstumsrate erforderlich sind oder nicht.

Indirect transfers in trade among former Soviet Union Republics: Sources, patterns and policy responses in the post-Soviet period

Abstract: THE FORMER SOVIET UNION (FSU) was composed of 15 republics which were very unevenly endowed with human, physical and natural resources. To contain regional imbalances within the Union and to integrate all republics into a tight and centrally commanded division of labour, the central government operated a scheme of vertical fiscal redistribution between the Union budget and the republican budgets. Through this system poorer republics became net receivers of direct transfers and richer republics became net donors. This scheme, which collapsed with the dissolution of the Union in 1991, channelled sizeable funds to the poorer Central Asian republics relative to their material product. Yet it failed to equilibrate large existing differences between the per capital fiscal revenues of the republics (Orlowski, 1992). Budgetary support through direct transfers, however, was not the only mechanism to redistribute income between the republics. Inter-republican trade flows in which prices for goods were set by the authorities independently from the market mechanism became the second, even more powerful channel of income transfers. Whenever such prices diverge from the level which would be determined by the free interaction of market forces, trade flows include a transfer element. Importers of overpriced goods 'donated' parts of their income to the exporting countries. So did exporters of underpriced products vis-a-vis importers. Such implicit transfers were not unique to trade between centrally planned economies. They have sometimes also been included in trade flows between market economies.' Yet, in contrast to market economies, they were a central element in trade among centrally planned economies and constituted an important mechanism of inter-state income redistribution. To abandon such a system at short notice can result in severe adjustment problems in net recipient countries, especially if import demand is price inelastic and domestic substitutes are not available. More specifically, this is because importers of oil and gas will have to pay much higher prices for their deliveries when low, preferential prices are no longer available to them, since they do not have alternative supply sources. To