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Costly Revenue-Raising and the Case for Favoring Import-Competing Industries
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In this article, the authors show how the costliness of raising revenue via taxation may make export subsidies less desirable and import tariffs more desirable, and their model is then estimated and its predictions are tested using U.S. tariff data.Abstract:
A standard finding in the political economy of trade policy literature is that we should expect export-oriented industries to attract more assistance than import-competing industries. In reality, however, trade policy is heavily biased toward supporting import industries. This paper shows within a standard protection for sale framework, how the costliness of raising revenue via taxation may make export subsidies less desirable and import tariffs more desirable. The model is then estimated and its predictions are tested using U.S. tariff data. An empirical estimate of the costliness of revenue-raising is also obtained.read more
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Why is Fiscal Policy Often Procyclical
TL;DR: The authors provided an explanation for this suboptimal fiscal policy based upon political distortions and incentives for less-than-benevolent government to appropriate rents, and tested this argument against more traditional explanations based purely on borrowing constraints with a reasonable amount of success.
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Trade and business cycle synchronization in OECD countries: A re-examination
TL;DR: In this paper, the authors re-examine the relationship between trade intensity and business cycle synchronization for 21 OECD countries in the period 1970-2003 and confirm that trade intensity affects synchronization, but the effect is much smaller than previously reported.
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Looking for Multiple Equilibria when Geography Matters: German City Growth and the WWII Shock
Erik Maarten Bosker,Erik Maarten Bosker,Steven Brakman,Steven Brakman,Harry Garretsen,Harry Garretsen,Harry Garretsen,Marc Schramm +7 more
TL;DR: In this article, a model of German city growth was developed based on the methodology developed by Davis and Weinstein (2004) for the case of Japanese cities and WWII, and the authors assessed the empirical relevance of multiple equilibria in the model of city-growth.
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Gatekeeping in health care
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Efficient Competitive Equilibria with Adverse Selection
Alberto Bisin,Piero Gottardi +1 more
TL;DR: In this article, the authors consider the case of adverse selection in the context of a Rothschild-Stiglitz insurance market and show that competitive equilibria always exist but are not typically incentive efficient.
References
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ReportDOI
Protection For Sale
Gene M. Grossman,Elhanan Helpman +1 more
TL;DR: In this paper, the authors developed a model in which special interest groups make political contributions in order to influence an incumbent government's choice of trade policy, and studied the structure of protection that emerges in the political equilibrium and the contributions by different lobbies that support the policy outcome.
Posted Content
Protection for Sale
TL;DR: In this paper, the authors develop a model in which special interest groups make political contributions in order to influence an incumbent government's choice of trade policy, and show why these groups may in some cases prefer to have the government use trade policy to transfer income rather than more efficient means.
Journal ArticleDOI
Culture and institutions: economic development in the regions of europe
TL;DR: The authors found that the exogenous component of culture due to history is strongly correlated with current regional economic development, after controlling for contemporaneous education, urbanization rates around 1850, and national effects.
Posted ContentDOI
Testing Slope Homogeneity in Large Panels
TL;DR: The authors proposed a modified version of Swamy's test of slope homogeneity for panel data models where the cross section dimension (N) could be large relative to the time series dimension (T).
Journal ArticleDOI
Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy
TL;DR: This paper found that when trade protection is modeled endogenously, its restrictive impact on imports is large, 10 times the size obtained from treating protection exogenously. But the level of trade protection was not exogenous.
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