New Uses for Sensitivity Analysis: How Different Movement Tasks Effect Limb Model Parameter Sensitivity

Original results for a newly developed eight-order nonlinear limb antagonistic muscle model of elbow flexion and extension are presented. A wider variety of sensitivity analysis techniques are used and a systematic protocol is established that shows how the different methods can be used efficiently to complement one another for maximum insight into model sensitivity. It is explicitly shown how the sensitivity of output behaviors to model parameters is a function of the controller input sequence, i.e., of the movement task. When the task is changed (for instance, from an input sequence that results in the usual fast movement task to a slower movement that may also involve external loading, etc.) the set of parameters with high sensitivity will in general also change. Such task-specific use of sensitivity analysis techniques identifies the set of parameters most important for a given task, and even suggests task-specific model reduction possibilities

Transport costs and"natural"integration in Mercosur

The authors explore the argument that trade between the Mercosur countries should be stimulated by preferential policies because of their geographic proximity. That is, that the Mercosur countries are candidates for natural integration. They find that, on average, transportation margins on trade within Mercosur and between Mercosur and Chile are about 6 percentage points lower than on trade with the rest of the world. That is a significant margin, and one that was reflected in the countries'trade patterns even before regional trade agreements reduced the policy-based barriers to mutual trade. But it is probably not large enough, in and of itself (without other benefits), to make the introduction of trade preferences desirable. The authors also explore the argument that absolutely high transportation costs between Mercosur and the rest of the world (that is, not relative to intra-Mercosur costs) justify regional trade preferences. For this to apply, the introduction of trade preferences must cause the Mercosur countries to cease importing some goods from the rest of the world completely. While Mercosur --rest-of-the-world transport costs certainly are high, trade patterns suggest that very few goods will cease to be imported from the rest of the world. Finally, the authors find that transport margins on imports are, on average, 2 to 4 percentage points higher for Mercosur countries than for the United States. Further research on why this is so is necessary before one can conclude that avoidable inefficiencies are involved.Development Economics&Aid Effectiveness,Trade Policy,Environmental Economics&Policies,Agribusiness&Markets,Consumption,Economic Theory&Research,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Environmental Economics&Policies,Trade and Regional Integration,Trade Policy

The challenge of reducing international trade and migration barriers

While barriers to trade in most goods and some services including capital flows have been reduced considerably over the past two decades, many remain. Such policies harm most the economies imposing them, but the worst of the merchandise barriers (in agriculture and textiles) are particularly harmful to the world's poorest people, as are barriers to worker migration across borders. This paper focuses on how costly those anti-poor trade policies are, and examines possible strategies to reduce remaining distortions. Two opportunities in particular are addressed: completing the Doha Development Agenda process at the World Trade Organization (WTO), and freeing up the international movement of workers. A review of the economic benefits and adjustment costs associated with these opportunities provides the foundation to undertake benefit/cost analysis required to rank this set of opportunities against those aimed at addressing the world's other key challenges as part of the Copenhagen Consensus project. The paper concludes with key caveats and suggests that taking up these opportunities could generate huge social benefit/cost ratios that are considerably higher than the direct economic ones quantified in this study, even without factoring in their contribution to alleviating several of the other challenges identified by that project, including malnutrition, disease, poor education and air pollution.Economic Theory&Research,Environmental Economics&Policies,Emerging Markets,Free Trade,Trade Policy

Trade and Employment: Stylized Facts and Research Findings

The substantial literature investigating the links between trade, trade policy, and labour market outcomes has generated a number of stylized facts, but many open questions remain. A common finding is that much of the shorter-run impacts of trade and reforms involve reallocation of labour or wage impacts within sectors. Wage responses to trade and trade reforms are generally greater than employment impacts, but trade can only explain a small fraction of the general increase in wage inequality observed in recent decades. A priority area for future research is to study the employment effects of services trade and investment reforms.trade liberalization, labour markets, trade and wages, trade and employment

Trade Shocks and Industrial Location: the Impact of EEC Accession on the UK

This paper combines detailed production data (from the ARD) with international trade data by port to examine the impact of accession to the EEC on the location of UK manufacturing. The paper has two main objectives. The first is to test the implications of models of economic geography for the location of economic activity in a developed economy subject to a significant trade shock. The second is to shed new light on the implications of EEC accession for the UK economy. Our results suggest that accession did eventually encourage UK manufacturing to relocate towards the South-East but that within the aggregate some industries retreated north-westwards in the face of increased import competition. Methodologically we have found that proximity to the ports through which trade occurs is a proxy for export market access and import competition and thus helps to explain industrial location. We have also found that the port-composition of UK trade is partly determined by the country-composition of trade. UK accession changed the country-composition of UK trade and via the port-composition induced an exogenous shock to the relative degrees of export market access and import competition in different UK locations. Our results show that employment responded as predicted to these shocks.UK manufacturing industry, EEC, economic geography

Regional cooperation, and the role of international organizations and regional integration

The authors examine regional cooperation among neighboring countries in the area of regional public goods. These public goods include water basins (such as lakes, rivers, and underground water), infrastructure (such as roads, railways, and dams), energy, and the environment. Their analysis focuses on developing countries and the potentially beneficial role that international organizations and regional integration may play in bringing the relevant countries to a cooperative equilibrium. A major problem in reaching a cooperative solution is likely tobe the lack of trust. If neighboring countries do not trust each other because of past problems, they may fail to reach a cooperative solution as each tries to maximize its gain from the regional public good. These strategies typically do not account for spillover effects and ultimately leads to losses for all parties. Other constraints on reaching a cooperative solution are its complexity and the financial requirements. Two types of institutions may help resolve some or all of these problems. International organizations can help with trust, expertise, and financing. The United Nations and the World Bank have been involved in a number of such projects in Africa, Asia, and elsewhere, and have been successful in helping parties reach cooperative solutions. Regional integration agreements, though not necessary for regional cooperation, may also be helpful by embedding the negotiations on regional cooperation in a broader institutional framework. The authors examine these issues with the support of both analysis and a number of case studies.Environmental Economics&Policies,Water and Industry,Decentralization,Water Conservation,Common Property Resource Development,Water Supply and Sanitation Governance and Institutions,Water and Industry,Water Conservation,Environmental Economics&Policies,Common Property Resource Development

How regional blocs affect excluded countries - the price effects of MERCOSUR

The welfare effects of preferential trading agreements, are most directly linked to changes in trade prices - that is, the terms of trade. The authors use a simple strategic pricing game in segmented markets, to measure the effects of MERCOSUR on the pricing of"non-member"exports to the regional trading bloc. Working with detailed data on unit values, and tariffs, they find that the creation of MERCOSUR is associated with significant declines in the prices of non-members'exports to the bloc. These can be explained largely by tariff preferences offered to a country's partners. Focusing on the Brazilian market (by far the largest in MERCOSUR), they show that non-members'export prices to Brazil respond to both most-favorable-nation, and preferential tariffs. Preferential tariffs induce reductions in non-memberexport prices.Environmental Economics&Policies,Economic Theory&Research,Markets and Market Access,Export Competitiveness,Payment Systems&Infrastructure,Environmental Economics&Policies,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Economic Theory&Research,Markets and Market Access,Access to Markets

Do exporters gain from voluntary export restraints?

Most literature suggests that voluntary export restraints (VER) are not very harmful for the exporting country. This paper argues that this view is misconceived. Most work has focused on the welfare loss to the importing country arising from a loss of income transfer combined with a distortionary loss in efficiency. Implicit is the message that the often large rent transfer to the exporting country is likely to compensate for any induced inefficiency losses. This paper studies the effects on distribution and efficiency when VERs force factors out of industries in which they are most productive. It develops a general theoretical model that establishes qualitative conditions under which a VER will result in industry contraction, spillovers of exports to unrestricted markets, and losses in national welfare. It estimates key parameters of supply and demand for leather footwear exports from Taiwan subject to the U.S. Orderly Marketing Agreement, and explores the implications in a calibrated simulation exercise. The results are a strongindictment of VERs. For most plausible parameter values, VERs redirect exports, reduce the size of the industry, and cause overall economic losses, expecially if the affected industry is large.Economic Theory&Research,Environmental Economics&Policies,Markets and Market Access,Access to Markets,Water and Industry

Trade as an Engine of Creative Destruction: Mexican Experience with Chinese Competition

This paper exploits the surge in Chinese exports from 1994 to 2004 as a natural experiment to evaluate the effects of a unilateral low wage trade and competition shock to producers in Mexico. We find that this shock causes selection at both firm and product levels as its impact is highly heterogeneous both on the intensive and extensive margins. Sales of smaller plants and more marginal products are compressed and are more likely to cease, while larger plants and products exhibit an opposite response. Similar results hold both for the domestic market and for competition facing Mexican exporters in a third market (i.e. the United States).China, Mexico, multi-product-firm, trade shock

More favorable and differential treatment of developing countries : toward a new approach in the World Trade Organization

The authors discuss options that could be considered in the World Trade Organization (WTO) to provide more favorable treatment-so-called special and differential treatment (SDT)-to small and low-income countries. They argue that there is a need both for differentiation across WTO members and for steps that would benefit all developing countries. The authors suggest the following to make the Doha Round more supportive of development: 1) A binding commitment by industrial countries to abolish export subsidies and nontariff barriers (tariff quotas) and to reduce most-favored-nation tariffs on labor-intensive products of export interest to developing countries to no more than 5 percent in 2010, and to no more than 10 percent for agricultural products. All tariffs on manufactures should go to zero by 2015, the target date for the achievement of the Millennium Development Goals. Liberalization should also be undertaken by developing countries on the basis of a formula approach. 2) A binding commitment by industrial countries on services to expand temporary access for service providers by a specific amount-for example, equal to an additional 1 percent of the workforce-and not to restrict cross-border trade (for example, by telecom channels). 3) Unilateral action by all industrial countries to extend preferential market access for less developed countries, and to simplify eligibility criteria, especially rules of origin. 4) Affirmation by the WTO that core disciplines relating to the use of trade policy apply equally to all WTO members. 5) Acceptance of the principle that for small and low-income countries"one size does not fit all"when it comes to domestic regulation and to WTO agreements requiring substantial investment of resources. 6) Recognition that some WTO agreements need to be adapted to make them moresupportive of development, and a consequent willingness by industrial countries to modify them. 7) Expansion of development assistance to bolster trade capacity in poor countries and strengthening of the links between trade-related technical assistance and the mechanisms through which aid priorities are determined in developing countries. In practice, calls for specific types of SDT often appear to be motivated by a perception that a certain WTO rule is"anti-development"and that therefore developing countries should be exempted from the rule in question. The authors suggest that the appropriate solution to such problems is to change the rules rather than seek an opt-out. What should be up front changes in rules and what should be part of the negotiating agenda is a major issue which needs to be addressed at the Cancun Ministerial meeting. The suggestion that SDT should focus primarily on WTO rules and be limited to those countries that need it most-very small and poor economies-implies that criteria should be adopted to differentiate between countries. Leaving this to self-declaration-the current approach-is not feasible, while reliance on case-by-case, agreement-specific negotiation can generate excessive costs, discretion, and associated uncertainty. While the authors'preference is for a simple rule-of-thumb approach to determine eligibility, this is an issue that requires much more thought and discussion. They suggest that WTO members establish a high-level group to consider criteria that could be used for differentiation purposes and to determine the set of agreements to which differentiation will apply.Economic Theory&Research,Rules of Origin,Environmental Economics&Policies,Payment Systems&Infrastructure,Decentralization,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Economic Theory&Research,Environmental Economics&Policies,Poverty Assessment,World Trade Organization