Multilateral Comparative Advantage and Trade
Efficient production ensures every country has the comparative advantage in its efficient good relative to every other country in their good. Multilateral comparative advantage rules out arbitrage between other countries that can undercut comparative advantage between two countries, explaining multilateral trade.
A Physical Production Function of the US Economy, 1951 – 2008
A production function motivated by the concept of work separates interaction of energy and labor with capital. Estimates outperform estimates of log linear and translog production functions for US aggregate output. Misspecification bias is apparent when energy is excluded. Energy has a larger effect than labor on output as well as marginal cost, and is underpaid. In contrast, labor is overpaid.
A Nonrenewable Resource in the Factor Proportions Model
Consider a small open economy producing a nonrenewable resource intensive export. Optimal depletion implies the resource price rises at the rate of the capital return. Labor grows at a steady rate while capital grows with investment out of income. Factor prices, depletion, and outputs continuously adjust making the steady state irrelevant. The effects of taxes are examined and illustrated by Cobb-Douglas simulations. The paper also considers a constant depletion rate, tragedy of the commons, and myopic resource owner.
Specialization in Services and Income Redistribution inside TPP Countries
A series of specific factors models for countries entering the Trans-Pacific Partnership estimate the income redistribution to regional trade in services. Labor is separated into three skill groups. The potential income redistribution is substantial suggesting a good deal is at stake as the Pacific Rim moves toward free trade and investment.