Now showing 1 - 10 of 74
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    Neo-Keynesian macroeconomics in an open economy : a survey : part 1
    (University College Dublin. School of Economics, 1986)
  • Publication
    The road less travelled : oligopoly and competition policy in general equilibrium
    (University College Dublin. School of Economics, 2002-10)
    I review previous approaches to modelling oligopoly in general equilibrium, and propose a new view which in principle overcomes their deficiencies: modelling firms as large in their own market but small in the economy as a whole. Implementing this approach requires a tractable specification of preferences. Dixit-Stiglitz preferences (which imply iso-elastic perceived demand functions) could be used, but "continuum-quadratic" preferences (which imply linear perceived demand functions) are more convenient. To illustrate their usefulness, I construct a simple closed-economy model of oligopoly in general equilibrium and derive some surprising implications for competition policy.
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    Determinants of the equilibrium real exchange rate
    (University College Dublin. School of Economics, 1987-04)
    This note presents a compact derivation of the determinants of changes in the equilibrium real exchange rate (the inverse of the price index of nontraded goods relative to traded goods), in a small open economy with any number of goods and factors. It is shown that the change in the real exchange rate equals a simple weighted sum of the differences between marginal propensities to consume and to produce individual nontraded goods. Implications of the result are noted for a variety of applied questions, including the effects of foreign aid, the "Dutch disease" and purchasing power parity comparisions between countries.
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    Competition, trade and wages
    (University College Dublin. School of Economics, 2001-06-05)
    I briefly review the empirical evidence in the trade and wages debate, which overwhelmingly rejects the Heckscher-Ohlin explanation for recent increases in OECD skill premia. I then argue that the same evidence is also difficult to reconcile in general equilibrium with the view that exogenous skill-biased technological progress is the sole culprit. Finally, I present a model of oligopolistic competition which is more consistent with the evidence. Removing quantitative import constraints (a metaphor for increased foreign competition) encourages both home and foreign firms to invest more aggressively, raising their demand for skilled labour even at unchanged relative wages.
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    Measuring competitiveness
    (University College Dublin. School of Economics, 2005-11-11)
    This paper reviews alternative approaches to measuring an economy's cost competitiveness and proposes some new measures derived from the economic theory of index numbers. The indices provide a theoretical benchmark for estimated real effective exchange rates, but differ from standard measures in that they are based on marginal rather than average sectoral shares in GDP or employment. The use of the new indices is illustrated by some simple calculations which highlight the potential exposure of the Irish economy to fluctuations in the euro-sterling exchange rate.
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    Domestic distortions and international trade
    (University College Dublin. School of Economics, 1992-12-15) ;
    In this paper, we investigate techniques for measuring the trade policy equivalent of domestic distortions, using a distance function approach. Our measure, the Trade Restrictiveness Index, is shown to equal the uniform tariff which is welfare-equivalent to a given pattern of domestic taxes and subsidies. We extend the Index to incorporate taxes in markets for non-traded goods and factors of production and illustrates its operationality with an application to liberalisation in Mexican agriculture. We conclude that our Index has considerable potential in empirical work and as an aid to trade negotiations.
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    Factor content functions and theory of international trade
    (University College Dublin. School of Economics, 1983-09) ;
    This paper introduces the concepts of direct and indirect factor trade utility functions and uses them to derive Marshallian and Hicksian factor content functions, which express the quantities of factors embodied in variables. The properties of these functions are discussed and they are used to derive a number of new results. In particualar, it is shown that, in certain circumstances, the existence of gains from trade is necessary and sufficient for the Heckscher-Ohlin theorem to hold in its factor content form.
  • Publication
    A new approach to evaluating trade policy
    (University College Dublin. School of Economics, 1991-11-25) ;
    This paper introduces a new measure, the Trade Restrictiveness Index, which measures the restrictiveness of a system of trade protection. The index is a general equilibrium application of the distance function and answers the question: `What uniform set of trade restrictions is equivalent (in welfare terms) to the initial protective structure?' The index is applicable to both tariffs and quotas and allows international and intertemporal comparisons. The index is operational and we provide an empirical example to illustrate its applicability and to show its superiority to commonly used measures.