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4021. Building a North American Community

Publication Date:
05-2005
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
The security and well-being of its citizens stand at the very pinnacle of any government's responsibilities. At the beginning of the twenty-first century, the futures of Canada, Mexico, and the United States are shared as never before. As a result, all three countries face a historic challenge: Do they continue on the path of cooperation in promoting more secure and more prosperous North American societies or do they pursue divergent and ultimately less secure and less prosperous courses? To ask the question is to answer it; and yet, if important decisions are not pursued and implemented, the three countries may well find themselves on divergent paths. Such a development would be a tragic mistake, one that can be readily avoided if they stay the course and pursue a series of deliberate and cooperative steps that will enhance both the security and prosperity of their citizens.
Topic:
Foreign Policy, Economics, and Regional Cooperation
Political Geography:
United States, Canada, North America, and Mexico

4022. The Current State of the Japanese Economy

Author:
Edward J. Lincoln
Publication Date:
04-2005
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
No abstract is available.
Topic:
Development, Economics, and Government
Political Geography:
Japan, Israel, and East Asia

4023. From Bound Duties to Actual Protection: Industrial Liberalisation in the Doha Round

Author:
Mohamed Hedi Bchir, Lionel Fontagné, and Sébastien Jean
Publication Date:
11-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
In the background of the Doha Round of trade negotiations, this study proposes a CGE assessment of multilateral liberalisation of market access for non-agricultural products. The scenarios considered include the so-called 'Girard proposal' (with alternative choices for the coefficient involved), the removal of tariff peaks and complete liberalisation. This study is the first to take into account the difference between bound and applied tariffs, while considering all the enforced preferential trade arrangements and computing tariff cuts at the detailed product level (HS-6 classification). Although the liberalisation of market access for non-agricultural products is found to be welfare-enhancing at the world level, cross-country distributive effects prove significant. A soft liberalisation would not significantly reduce applied duties in developing countries, owing to their considerable binding overhang. By contrast, a deep liberalisation would entail fierce price competition among those developing countries that are largely specialised in similar sectors and in the same product quality range.
Topic:
Economics, International Trade and Finance, and Treaties and Agreements
Political Geography:
Eastern Europe

4024. Modelling the Effects of Trade Policy Scenarios on Multifunctionality in Greek Agriculture: A Social Accounting Matrix Approach

Author:
Dimitris Psaltopoulos and Eudokia Balamou
Publication Date:
09-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper presents a Social Accounting Matrix (SAM) model for conducting an assessment on the potential impacts of trade agreements on several multifunctionality indicators in Greek agriculture. More specifically, two SAM models were constructed, one for Greece and one for local economy of Archanes (Crete), an agriculturally dependent NUTS IV area, which has demonstrated a noticeable record in terms of the implementation of Pillar 2 policies. Along these lines, five alternative scenarios were specified with regards to anticipated EU policy reactions under different future outcomes of the Doha round negotiations. In broad terms these scenarios range from a status quo (2003 CAP reform) hypothesis to full decoupling, taking also into account the possibility of further reductions in domestic (EU) support as well as developments on Pillar 2 funding. Results suggest that under the scenarios examined, the effects of policy reform upon multifunctionality indicators are rather mixed and surely not extremely worrying. Effects of the status quo scenarios seem to be optimistic in terms of projected economy-wide output and employment at both national and regional level. On the other hand, Scenario 1(bis) generates negative results in terms of farm output and employment (for Archanes), land-use abandonment projections are marginal at the national and rather moderate at the regional level, while environmental repercussions are negative at the national level. The regional analysis has also shown that the impacts of Scenarios 2, 2b and 3 are rather worrying in terms of all categories of projections, with the exception of “Total Output”. Taking account of the specification of Scenario 3, this finding generates rather justified reservations on the “ability” of Pillar 2 policies to ameliorate for economic activity contraction caused by a decrease in Pillar 1 support in Archanes economy.
Topic:
Agriculture, Economics, and International Trade and Finance
Political Geography:
Europe

4025. Impact of Public R Financing on Employment

Author:
Jyrki Ali-Yrkkö
Publication Date:
08-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This study analyses how public R financing impacts the labour demand of companies. To our knowledge, no previous studies have distinguished the impact between a firm's global and domestic employment. Our company-level panel data covers a period from 1997 to 2002. The statistical method employed in the study takes into account the possibility that receiving public support may be an endogenous factor. Our results suggest that public R financing increases both group-level and domestic R employment. We also analysed the impact of public R funding on employment other than in the R area, and found that it is not affected by public funding. It is possible, however, that such funding has an impact in the longer term.
Topic:
International Relations, Civil Society, Economics, and International Trade and Finance

4026. Human Capital, R and Competition in Macroeconomic Analysis

Author:
Erik Canton, Bert Minne, Ate Nieuwenhuis, Bert Smid, and Mark van der Steeg
Publication Date:
08-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Long-run per capita economic growth is driven by productivity growth. Major determinants of productivity are investments in education and research, and the intensity of competition on product markets. While these ideas have been incorporated into modern growth theories and tested in empirical analyses, they have not yet found their way to applied macroeconomic models used to forecast economic developments. In this paper, we discuss various options to include human capital, R and product market competition in a macroeconomic framework. We also study how policy can affect the decisions to build human capital or to perform research, and how competition policy impacts on macroeconomic outcomes. We finally sketch how these mechanisms can be implemented into the large models used at the Netherlands Bureau for Economic Policy Analysis (CPB).
Topic:
Development, Economics, Education, and Emerging Markets
Political Geography:
Netherlands

4027. Evaluating the Impact of Alternative Policy Scenarios on Multifunctionality: A Case Study of Finland

Author:
Heikki Lehtonen, Jussi Lankoski, and Jyrki Niemi
Publication Date:
07-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper provides first results of the sector-model approach to analysing the effects of alternative policy scenarios on the multifunctional role of Finnish agriculture. In terms of environmental non-commodity outputs, this study focuses on nutrient runoffs, landscape diversity and biodiversity. As regards other non-commodity outputs, the paper considers rural socio-economic viability. The results suggest that, on the whole, reform of the common agricultural policy is not likely to result in any drastic decline of agricultural production in Finland. The amount of green fallow will increase considerably when agricultural support payments are decoupled from production, and as a result the remaining cultivated agricultural land will become biologically richer. The agricultural labour force is likely to decrease substantially irrespective of agricultural policy. The study concludes that the credibility of the production economics and biological relationships of the economic model determine the validity of the results of the many indicators examined. Further, the economic logic of microeconomic simulation models provides a consistent assessment of the many aspects of multifunctionality.
Topic:
Agriculture, Economics, and Environment
Political Geography:
Europe and Finland

4028. Economic Effects of Free Trade between the EU and Russia

Author:
Pekka Sulamaa and Mika Widgrén
Publication Date:
05-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This study simulates the economic effects of eastern enlargement of the EU and an EU-Russian free trade area. The main emphasis of the paper is on the effect this would have on the Russian economy. The simulations were carried out with a GTAP computable general equilibrium model, using the most recent GTAP database 6.0 beta, which takes the former Europe agreements between the EU-15 and the eight new Central and Eastern European member states into account. The results confirm the earlier findings that a free trade agreement with the EU is beneficial for Russia in terms of total output but not necessarily in terms of economic welfare when measured by equivalent variation. The main reason behind this is the deterioration that would occur in Russia's terms of trade. Improved productivity in Russia would, however, make the free trade agreement with the EU advantageous.
Topic:
Economics and International Trade and Finance
Political Geography:
Russia, Europe, and Asia

4029. Is the European Economy a Patient and the Union its Doctor? On Jobs and Growth in Europe

Author:
Sjef Ederveen, Albert van der Hoorst, and Paul Tang
Publication Date:
04-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
A stronger focus on jobs and growth is part of an effort to renew the Lisbon strategy. Yet the view that economic expansion contributes to maintaining Lisbon's other goals of social cohesion as well as the environment is somewhat optimistic. First, there are structural trade-offs among the central elements of the Lisbon strategy. Escaping these trade-offs temporarily is sometimes possible but requires policy changes. Second, higher productivity (growth) may not provide more structural room for governments to manoeuvre. It leads to higher tax receipts but also to higher public expenditures since public sector wages and social security benefits are linked to productivity. In contrast, more employment (jobs) is associated with a smaller public sector. But to engineer the increase in employment, changes in welfare state arrangements are needed. In other words, focussing solely on the sick child will probably harm the other children.
Topic:
Security, Development, Economics, and Human Welfare
Political Geography:
Europe and Lisbon

4030. Speed of Convergence and Relocation: New EU Member Countries Catching up with the Old

Author:
Kari E. O. Alho, Ville Kaitili, and Mike Widgrén
Publication Date:
04-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Economic convergence of the EU's new member countries (NMCs) towards the incumbent EU countries (EU-15) is of paramount importance for both partners, not only in terms of real income but also in nominal terms. In this study we build a dynamic, computable general equilibrium model, starting from the Balassa-Samuelson two-sector framework, then modify and enlarge it (with, among other things, endogenous capital formation, consumption behaviour and labour mobility) to address several other issues such as uncertainty, welfare and sustainability in terms of foreign indebtedness. At the same time we make flows of foreign direct investment (FDI) endogenous in order to evaluate the impact convergence has on the EU-15 and the inter action between the two regions through FDI. We find that in a general equilibrium setting, fears of adverse effects resulting from a relocation of EU-15 manufacturing to the NMCs are not well founded.
Topic:
International Relations, Development, Economics, and Foreign Direct Investment
Political Geography:
Europe