Knowledge that Transforms

Japanese input coefficients are used to investigate the pattern of comparative advantage in the exportation of manufactured products in a cross-country framework. Estimates are made for the imports of manufactured products as well as for net exports. Also, alternative techniques of estimation are utilized and an attempt to explain the residuals in the regression equations and to indicate the predictive power of these equations is made. The paper shows that patterns of comparative advantage in manufactured goods can be explained by reference to commodity characteristics and country characteristics. In turn, intercountry differences in the extent of trade orientation, the concentration of exports, and foreign direct investment explain part of the residuals of the cross-country regression equations. Finally, it has been found that the method applied permits projecting the factor intensity of trade for individual countries.

Recent research by David Lilien shows that a significant fraction of aggregate unemployment can be explained by the dispersion of employment growth across industries. This paper presents two new results in this area. First, it is shown that a significant fraction of the variation in Lilien's dispersion index is due to the differential impact of oil shocks across industries. Second, and more important, it is shown that, once the dispersion in employment growth due to oil shocks is accounted for, the residual dispersion has no explanatory power for unemployment.

Robert A. Connolly, Barry T. Hirsch, Mark Hirschey, Union Rent Seeking, Intangible Capital, and Market Value of the Firm, The Review of Economics and Statistics, Vol. 68, No. 4 (Nov., 1986), pp. 567-577

Badi H. Baltagi, Dan Levin, Estimating Dynamic Demand for Cigarettes Using Panel Data: The Effects of Bootlegging, Taxation and Advertising Reconsidered, The Review of Economics and Statistics, Vol. 68, No. 1 (Feb., 1986), pp. 148-155

This paper examines short-term volatility in the real effective exchange rates of industrial countries and its impact on their imports. It yields three conclusions. First, volatility has not diminished as markets have gained experience with floating exchange rates; the trend appears to be in the opposite direction for some countries. Second, exposure to short-term volatility has differed among countries; Japan and Sweden have experienced much more than most other industrial countries. Third, volatility appears to depress the volume of international trade. This third finding is consistent with results reported by Cushman and by Akhtar and Hilton and challenges earlier findings by Hooper and Kohlhagen.

Empirical studies of consumer demand or of factor demand have now moved far beyond the Cobb-Douglas functional form and elasticities of interest are no longer estimated as parameters of the system. Instead, such elasticities are typically non-linear functions of the parameters that have been estimated and it is natural to want to be able to say something about the statistical properties of such elasticities. One way of dealing with this is to linearly approximate the elasticity formulas (in terms of the estimated parameters) and use classical statistical procedures to get approximations to the underlying variances. If y-f(x) and x has a variance covariance matrix V, the linear approximation is given by: Var(y) (8f/8x)V(8f/8x). The data needed for such an approximation are estimates of the parameters and of the associated variance-covariance matrix. Some of the earliest references that we have found to uses of this approximation technique in the elasticity context are to Griffin and Gregory (1976), Griffin (1977), and Fuss (1977), while the earliest references to

Partha Dasgupta, Eric Maskin; The Existence of Equilibrium in Discontinuous Economic Games, I: Theory, The Review of Economic Studies, Volume 53, Issue 1, 1 Jan