This paper introduces a new methodology for the estimation of income trade elasticities based on an import intensity-adjusted measure of aggregate demand. It provides an empirical illustration of this new approach for a panel of 18 OECD countries, paying particular attention to the 2008-09 Great Trade Collapse, which standard empirical trade models fail to account for. In this paper, we argue that the composition of demand plays a key role in the collapse of trade during crises because of a relatively bigger fall in the most import-intensive categories of expenditure (especially investment, but also private consumption), which has a large downward impact on the quantity of imports from the rest of the world. In addition, the fragmentation of production implies high import content of exports and, in turn, strongly synchronized trade ‡uctuations across countries. We provide evidence in favor of these factors based on the analysis of the new OECD input-output tables and building on a stylized theoretical model. Importantly, we show that our new intensityweighted measure of demand outperforms alternative measures, during crises but also in normal times, providing import elasticities of demand that are much less volatile across the cycle. JEL Codes: F10, F15, F17.

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Abstract:Growing awareness of the wider environmental significance of fine sediment transport by rivers and associated sediment problems linked to sediment-water quality interactions, nutrient and contaminant transfer, and the degradation of aquatic habitats has resulted in the need for an improved understanding of the mobilization and transfer of sediment in catchments to support the development of effective sediment management strategies. The sediment budget provides a key integrating concept for assembling information on the internal functioning of a catchment in terms of its sediment dynamics by providing information on the mobilization, transfer, storage and output of sediment. One key feature of a catchment sediment budget is the relationship between the sediment yield at the catchment outlet and rates of sediment mobilization and transfer within the catchment, which is commonly represented by the sediment delivery ratio. To date, most attempts to derive estimates of this ratio have been based on a comparison of the measured sediment yield from a catchment with an estimate of the erosion occurring within the catchment, derived from an erosion prediction procedure, such as the Universal Soil Loss Equation (USLE) or its revised version, RUSLE. There is a need to obtain more direct and spatially distributed evidence of the erosion rates occurring within a catchment and to characterize the links between sediment mobilization, transfer, storage and output more explicitly. In this context, fallout radionuclides have proved particularly useful as sediment tracers. This paper reports the results of a study aimed at exploring the use of caesium-137 ( 137 Cs) measurements to establish sediment budgets for three catchments of different sizes and contrasting land use located in Calabria, southern Italy. Long-term measurements of sediment output were available for the catchments, and, by using the estimates of gross and net rates of soil loss within the catchments provided by 137 Cs measurements, it was possible to establish the key components of the sediment budget for each catchment. By documenting the sediment budgets of three catchments of different sizes, the study provides a basis for exploring the effects of scale on catchment sediment budgets and, in particular, the increasing importance of catchment storage as the size of the catchment increases. The results of this study demonstrate a reduction in the sediment delivery ratio from 98 to 2% as catchment area increases from 1Ð47 ha to 31Ð2 km 2 .

12We investigate the effects of fiscal policy communication on the propagation of government spending shocks. To this aim, we propose a new index measuring the coordination effects of policy communication on private agents' expectations. This index is based on the disagreement amongst US professional forecasters about future government spending. The underlying intuition is that a clear fiscal policy communication can coalesce expectations, reducing disagreement. Results indicate that, in times of low disagreement, the output response to fiscal spending innovations is positive and large, mainly due to private investment response. Conversely, periods of elevated disagreement are characterised by muted output response.

This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.This paper shows that increasing government social expenditures can make a substantive contribution to increasing household consumption in China. The paper first undertakes an empirical study of the relationship between the savings rate and social expenditures for a panel of OECD countries and provides illustrative estimates of their implications for China. It then applies a generational accounting framework to Chinese household income survey data. This analysis suggests that a sustained 1 percent of GDP increase in public expenditures, distributed equally across education, health, and pensions, would result in a permanent increase the household consumption ratio of 1¼ percentage points of GDP.

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Concern for the sustainability of the soil resource and for the detrimental impacts of fine sediment on downstream river systems and aquatic ecosystems has directed attention to the need for information on the suspended sediment loads of rivers. However, traditional measurement programmes focus primarily on quantifying the sediment load at a catchment outlet. Such information, although useful, may be of limited value in establishing rates of soil degradation, because much of the sediment mobilized within a catchment may be deposited before reaching the catchment outlet. Furthermore, it may also be of limited value in the design and implementation of sediment management and control programmes, because this requires an understanding of the key sources of mobilized sediment, the transport pathways involved and the importance of storage within the catchment. Information on the sediment budget of a catchment must be seen as an increasingly important requirement. However, such information is difficult to obtain using conventional traditional monitoring techniques. Fallout radionuclides, including caesium-137 ( 137 Cs) and unsupported or excess lead-210 ( 210 Pb ex ), have been shown to offer considerable potential for use as sediment tracers in sediment budget investigations. They are able to provide distributed information on rates of soil and sediment redistribution within the catchment, which represents a valuable complement to information on sediment output. This contribution reports the results of a study aimed at exploring the use of both 137 Cs and 210 Pb ex measurements to establish the sediment budget for the small (1.39 km 2 ) forested Bonis catchment, located in southern Italy. The results confirm that 137 Cs and 210 Pb ex measurements can provide a valuable tool for quantifying both erosion and sediment redistribution within a catchment and therefore for establishing its sediment budget.

Recent concern about the many environmental problems associated with the transport of fine sediment by rivers has generated a need to obtain spatially distributed evidence of the erosion rates operating within a catchment and to explore more explicitly the links between sediment mobilisation, transfer, storage and output. In the past few decades, the fallout radionuclides caesium-137 (137Cs) and unsupported lead-210 (210Pbex) have been successfully used as tracers to estimate soil erosion and deposition rates in many areas of the world. However, to date, most studies using this approach have focussed on relatively small areas, such as individual fields or small catchments. There is a need to explore the potential for upscaling the approach to larger areas or catchments. The present paper reports an attempt to use the fallout radionuclides 137Cs and 210Pbex to explore further the relationship between sediment mobilisation, sediment transfer and storage, and sediment yield for a medium-scale (31.61 km2) catchment located in Calabria, southern Italy. The results emphasise that the low value of specific sediment yield derived for the study catchment from measurements of the suspended sediment flux at the catchment outlet obscure the existence of appreciable erosion rates in many areas of the catchment. Much of this erosion is balanced by deposition and sediment storage, resulting in a relatively low sediment delivery ratio for the catchment.