This paper is motivated by the observation that intermediaries play an important role in international trade. The matching role of intermediaries is examined in a pairwise matching model with two-sided information asymmetry, where intermediaries develop contacts. Intermediation expands the set of matching technologies available to traders, while convexity in network-building costs with respect to network size gives rise to both direct and indirect trade in equilibrium. The trade pattern depends on the relative responsiveness of the direct and indirect matching technologies to information costs, which for some parameter values generates a non-monotonic relationship between information frictions and trade.
This paper develops an infinite-horizon, political agency model with a continuum of political districts, in which incumbent politicians can improve their re-election probability by attracting swing voters in key states through strategic trade protection. A unique equilibrium is shown to exist where incumbents build a reputation of protectionism through their policy decisions. We show that strategic trade protection is more likely when protectionist swing voters have a lead over free-trade supporters in states with relatively strong electoral competition that represent a larger proportion of Electoral College votes. US data is used to test the hypothesis that industrial concentration in swing and decisive states is an important determinant of trade protection of that industry. The empirical findings provide support for the theory and highlight an important, and previously overlooked, determinant of trade protection in the US Electoral College.
Regulatory standards that control the quality of vertically differentiated products are becoming increasingly important for industrial production and international trade. There is considerable debate surrounding the possible effects of standards on international trade and social welfare. This paper examines the implications of minimum quality standards (MQSs) in a free trade environment with two countries and two firms competing in prices in an industry characterised by vertical product differentiation. Mild minimum quality standards are shown to raise welfare by increasing the quality, lowering the (quality-adjusted) price of traded goods and increasing market coverage. Nevertheless, cross-country externalities result in governments choosing MQSs above or below the world optimum thereby reducing welfare by inducing exit and reducing competition. The model suggests that international organisations, such as the International Organization for Standardization (ISO), may be better positioned to improve welfare outcomes through the development of product standards.Keywords: International Trade, JEL Classification Numbers: * I would like to thank the ESRC for their financial support and Tony Venables, Alejandro Cunat, Steve Redding, Henry Overman, Gilles Duranton and Kwok Tong Soo for their invaluable comments. Moreover, I would also like to thank all seminar and conference participants at the London School of Economics, and elsewhere, for their feedback. All errors are mine.
Universities are under increasing pressure to equip graduates with a broader set of competencies, such as communication, teamwork and leadership skills, that go beyond subject-specific knowledge. This, alongside growing student numbers in higher education, creates pedagogic challenges, especially with regards to assessment design. Conventional assessment modalities, such as individual essay writing, are costly to scale up and poorly suited for the development of further desired competencies. To address these challenges in the context of a first-year economics module, we replaced a 1,000-word individual written assignment with a group video assignment, where students were required to work in small teams to create a three-minute video on a contemporary economic issue. Focus groups and module evaluation questionnaires were used to elicit students' perceptions of how the group video assessment contributed to their learning experience and skill development, how it compares with other modes of assessment, as well as suggestions for improved implementation. Our analysis generates insights on all these aspects. Students reported a preference for diversity in assessment methods, and found the video assignment to be a positive, engaging but also challenging experience, which provided the opportunity for collaboration and development of diverse skills.
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