Multilateral Comparative Advantage
Bilateral comparative advantage fails to identify the trade pattern when there are many countries and goods. Multilateral comparative advantage rules out trade with third countries that could undercut bilateral comparative advantage, identifying the pattern of multilateral trade.
A Nonrenewable Resource in the Factor Proportions Model
For a small open economy with a nonrenewable resource intensive export, optimal depletion implies the resource price rises at the rate of the capital return. Assume the labor force grows at a steady rate and capital with investment out of income. Wages, the return to capital, the resource price, depletion, and outputs continuously adjust. The effects of taxes on depletion and imports are compared and illustrated with Cobb-Douglas simulations. The paper also considers a constant depletion rate, tragedy of the commons, and myopic resource owner.
A Macroeconomic Model for Greece in its Government Debt Crisis
The IS-LM macroeconomic model is modified for Greece in the Eurozone. Fiscal, monetary, and exchange rate policies are unavailable. The only option to raise income and ease the burden of paying the government debt is to pursue policy to increase investment optimism.
Energy in a Translog Production Function of the US Economy, 1973-2013
Energy is included with capital and labor in direct estimation of an error correction production function for quarterly data. Energy proves a critical factor of production. Estimates support constant returns to scale with smooth technological progress. Results do not, however, support competitive factor markets. Labor is overpaid.
Factor Tariffs and Income
A factor tariff in a competitive small open economy producing two traded goods with capital, labor, and imported energy redistributes income. Suppose export production is energy intensive, and import competing production labor intensive. An energy tariff shifts production toward the import competing good, raising the wage but lowering the capital return. The present paper shows that under some conditions the decrease in import spending can outweigh the decrease in the value of output, raising income.