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Empirical research on trade liberalisation with imperfect competition: A survey
J. David Richardson
This paper surveys recent empirical research on the benefits of trade liberalisation with imperfect competition and scale economies. Computable general-equilibrium studies are surveyed, as are a large number of partial-equilibrium studies. The first typical conclusion from the studies surveyed is that calculated gains in national purchasing power are usually two to three times the size of those estimated in traditional frameworks with perfect competition. The second is that calculated adjustment pressures from trade liberalisation are considerably higher than implied in most commentary, and higher also than estimates from traditional models.
Population ageing: Economic effects and some policy implications for financing public pensions
Robert P. Hagemann and Giuseppe Nicoletti
Population ageing in the OECD area is expected to affect labour and product markets, and national rates of saving and capital accumulation. Ageing will also place significant pressures on public finances as the share of future output transferred to a large dependent population rises. This paper discusses some of the potential effects of ageing, with particular emphasis on its implications for financing public pensions in Japan, the Federal Republic of Germany, Sweden, and the United States. Future increases in retirement age and reduction of the ratio of benefits to wage levels could help reduce pressures on public finances, while a trust fund can help smooth the transition.
The economic dynamics of an ageing population: The case of four OECD countries
Alan J. Auerbach, Lauence J. Kotlikoff, Robert P. Hagemann and Giuseppe Nicoletti
Demographic changes such as population ageing have many effects that influence a country's fiscal viability. This paper uses a dynamic general-equilibrium model with overlapping generations to evaluate the macroeconomic and fiscal consequences of population ageing in four OECD countries: Japan, the Federal Republic of Germany, Sweden, and the United States. One of the fundamental lessons is that allowing for general equilibrium adjustments reduces the adverse welfare effects of increasing dependency ratios. Nevertheless, the welfare costs and their distributions acmss cohorts pose serious challenges to policy-makers in some cases.
Structural conditions and macroeconomic responses to shocks: Sensitivity analysis for four european countries
Luca Barbone and Pierre Poret
This paper treats expected macroeconomic payoffs from greater competition in product and labour markets by analysing how the four largest European countries would respond to shocks if they had the same degree of price and wage flexibility as the United States. Based on simulations carried out with the INTERLINK model, the main results are: a) fiscal stimulus is more inflationary andproduces smaller output gains when flexibility is increased; ii) following an adverse external supply shock, greater flexibility serves to stabilise prices and minimise output losses, depending, for some countries, on the stance of monetary policy and the exchange-rate regime.
Deregulation and privatisation in an economy-wide context
Alberto Pera
During the last decade, measures have been taken in many countries to deregulate previously regulated industries and to privatise government-owned enterprises. This paper describes these developments with special focus on the transport and telecommunications industries and reviews the theoretical considerations behind the change in policy approach. It is argued that regulation of prices, restrictions on entry to certain industries and government ownership often lead to inefficiencies which seriously impair the welfare gains expected from such measures. Moreover, regulation is sometimes introduced in markets which left to themselves would have yielded efficient outcomes despite a concentrated production structure.
Revision of the system of national accounts: A note on objectives and key issues
Derek Blades
The United Nations System of National Accounts defines aggregates such as income, production, saving and investment which are the basic concepts of macroeconomics. The present SNA is twenty years old and is now being reviewed by statisticians and economists from national administrations and international organisations. The main aim of the review is to update the System to take account of institutional developments that have occurred in the last two decades, but the review has also touched upon some fundamental questions such as the distinction between current and capital transactions, depletion of natural resources and the boundary of economic production.
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