The existing literature regarding the impact of trade facilitation in terms of export volume, per capita GDP, etc., only considers the market equilibria (before and after trade facilitation) to compare and account for the e¢ciency gains. However, when a trade facilitation measure is introduced by a government, the cost of the foreign producer gets a downward jump to the extent of costs reduced due to trade facilitation policy. This a¤ects the quantity of imports and the market gets out of equilibrium. The market supply and demand of the commodity for which the trade facilitation measure is adopted, gets adjusted over time until the post-policy equilibrium arrives. The mechanism regarding the adjustment of price is based on the lack of coordination among buyers and sellers at the exisiting prices. E¢ciency losses on the adjustment path are not taken into consideration when the e¢ciency gains of trade facilitation are computed in the exisiting literature. In this article, an optimal trade facilitation policy subject to a cost constraint has been derived, which minimizes the e¢ciency losses on the adjustment path, while the gains in the equilibrium, from the trade facilitation policy are accounted for. (JEL F10,
We examine estimation and inference of the ratio of linear trend slopes between two time series. Our methodological results are motivated by recent empirical climate papers that estimate and test hypotheses about the relative warming rate in the lowertroposphere relative to surface warming, i.e. the amplification ratio. We analyze statistical properties of several estimators and test statistics that allow serial correlation. Relative merits of the estimators and test statistics depend on the magnitude of the trend slopes relative to the noise in the data. We make specific recommendations for practitioners. We revisit the empirical findings of Klotzbach et al. (2009Klotzbach et al. ( , 2010 and obtain similar results using our recommended approach. ESTIMATION AND INFERENCE OF TREND SLOPE RATIOS 641Po-Chedley and Fu (2012) and the references cited therein. In this literature, there is an explicit interest in estimating the ratio of trend slopes of lower-troposphere and surface temperature series -the so-called amplification ratio. What is missing from this empirical climate literature are sound statistical methods for computing confidence intervals for trend slope ratios. In fact, most papers in this literature report estimated trend slope ratios without reporting standard errors or confidence intervals. This paper has two goals. First, we develop reliable statistical methods for estimation and inference of trend slope ratios, and we provide practitioners with concrete recommendations. Because temperature series are known to have serial correlation, the inference methods we propose are configured to be robust to serial correlation. Second, we revisit the empirical analysis of Klotzbach et al. (2009Klotzbach et al. ( , 2010 where trend slope ratios (amplification ratios) were estimated between surface and lower-troposphere temperatures. Klotzbach et al. (2009Klotzbach et al. ( , 2010 reported estimated amplification ratios but did not provide confidence intervals given the lack of statistical methodology in this area. The empirical contribution of this paper is to construct serial correlation robust confidence intervals for amplification ratios using the same temperature series as used by Klotzbach et al. (2009Klotzbach et al. ( , 2010 but extending the analysis to 2014 (Klotzbach et al. (2009 used data ending in 2008). Our confidence intervals allow empirical researchers to statistically compare estimated amplification ratios from observed temperature series with amplification ratios of theoretical climate models used for projections of future climate scenarios. We also sketch methods for estimation and inference of amplification ratios when the trend functions are allowed to have a one-time structural change at a given date.While there are well-developed literatures in statistics and biostatistics on estimation and inference of ratios of parameters building on the approach of Fieller (1954), we are unaware of papers in the statistics, econometrics or climate literatures with a specific focus on estimation and infe...
Following Ramsey, the existing literature on optimal quantity taxation only compares the pre and the post-tax market equilibriums in order to account for the efficiency losses. However, when the government imposes a quantity tax on the consumer, the buyer’s price jumps to the pre-tax equilibrium price plus the amount of the tax, and the supply and the demand of the taxed commodity then adjust over time to bring the new post-tax market equilibrium. The existing literature does not take into account the efficiency losses during the adjustment process while computing the optimal quantity taxes. This paper derives an optimal quantity tax path in a dynamic setting minimizing the efficiency losses (output and/ or consumption lost) during the dynamic adjustment process as well as the post-tax market equilibrium.
When the efficiency losses or gains as a result of an ad valorem import tariff are accounted for, the exisiting literature compares the equilibrium states before and after the tariff. However, after the imposition of an ad valorem tariff, the cost of the foreign producer to sell in the domestic market jumps upwards by the extent of the ad valorem tariff. This affects the quantity of imports, and the market is no longer in the initial equilibrium. The market then adjusts and after some efficiency loss, a new equilibrium state is arrived at. The mechanism of price adjustment has a basis of lack of coordination among buyers and sellers at the exisiting prices. The economic efficiency loss when the market is out of equilibrium is not taken into consideration in the literature, while deriving an optimal ad valorem tariff rate. In this article, an optimal ad valorem tariff schedule has been derived. From optimality, it should be construed that the economic efficiency losses get minimised when the market is adjusting and also during the equilibrium. A revenue constraint has to be met in addition.
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