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  • Author: Victor H. Aguiar, Roy Allen, Nail Kashaev
  • Publication Date: 03-2020
  • Content Type: Working Paper
  • Institution: Centre for Human Capital and Productivity (CHCP), Western University
  • Abstract: This paper studies nonparametric identification and counterfactual bounds for heterogeneous firms that can be ranked in terms of productivity. Our approach works when quantities and prices are latent rendering standard approaches inapplicable. Instead, we require observation of profits or other optimizing-values such as costs or revenues, and either prices or price proxies of flexibly chosen variables. We extend classical duality results for price-taking firms to a setup with discrete heterogeneity, endogeneity, and limited variation in possibly latent prices. Finally, we show that convergence results for nonparametric estimators may be directly converted to convergence results for production sets.
  • Topic: Economics, Human Capital, Profit, Productivity, Price
  • Political Geography: Canada, Global Focus
  • Author: Yifan Gong, Todd Stinebrickner, Ralph Stinebrickner
  • Publication Date: 04-2020
  • Content Type: Working Paper
  • Institution: Centre for Human Capital and Productivity (CHCP), Western University
  • Abstract: While a large literature is interested in the relationship between family and labor supply outcomes, little is known about the expectations of these objects at earlier stages. We examine these expectations, taking advantage of unique data from the Berea Panel Study. In addition to characterizing expectations, starting during college, the data details outcomes for ten years after graduation. Methodological contributions come from approaches to validate quality of survey expectations data and the recognition that expectations data, along with longitudinal data, can potentially help address endogeneity issues arising in the estimation of the causal effect of family on labor supply.
  • Topic: Economics, Labor Issues, Human Capital, Family, Labor Market, Productivity
  • Political Geography: Canada, Global Focus
  • Author: Tamara Gurevitch, Peter R. Herman, Farid Toubal, Yoto V. Yotov
  • Publication Date: 12-2020
  • Content Type: Working Paper
  • Institution: Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
  • Abstract: Using new data on linguistic diversity across and within countries, we examine novel channels though which language affects trade patterns and economic welfare. We find that linguistic similarity within a country accounts for about 10 percent of estimated `home bias', demonstrating the importance of shared languages for domestic integration. To highlight the general equilibrium implications of domestic language proximity, we simulate the repeal of Quebec's Bill 101, which made French an official language in Canada and established fundamental language rights for Frenchspeakers. The analysis demonstrates that domestic language diversity has significant implications for Canada's welfare but also sizable economic consequences that stretch far beyond its borders.
  • Topic: Economics, Global Political Economy, Economic Growth, Linguistics, Trade
  • Political Geography: Canada, Quebec
  • Publication Date: 09-2019
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Canada’s Arctic Agenda: Into the Vortex brings together leading Arctic thinkers to examine key elements of Canadian Arctic and Northern policy. These experts reflect on the progress that has been made in the past few years in Arctic policies and programs and consider the impact of powerful forces of change and division, both within Canada and abroad, which have produced a vortex of economic, security, environmental and identity challenges for the Canadian Arctic. Addressing the intense, if understated, debate on Canada’s Arctic agenda, this report’s contributors share the consistent message that Northerners must play a leadership role in creating and implementing the policies that affect them. The report also includes a collection of interviews with Jane Glassco Northern Fellows. These thoughtful Indigenous women from across the North in Canada share their perspectives and ideas on the policy issues that require urgent attention to ensure the prosperity of their Northern communities. The well-informed essays and interviews in this report will spark conversation about Canada’s Arctic policy priorities and provide concrete advice to inform the work of Canada’s policy makers moving forward.
  • Topic: Security, Economics, Environment, Identities
  • Political Geography: Canada, North America, Arctic
  • Author: François Vallancourt, Jesús Ruiz-Huerta, Violeta Ruiz Almendral
  • Publication Date: 01-2018
  • Content Type: Working Paper
  • Institution: Fundación Alternativas
  • Abstract: Since 2009 Autonomous Communities have started to set their own Personal Income Tax rates for the first time. This is both the result of the 2009 rule change and the difficulties to get other public revenues during the years of the Great Recession. We will examine what the Autonomous Communitie s explicit choices have been and see how they compare to what Canadian Provinces have done. Before 2000, these provinces other than Québec were required to use a surtax approach that saw provinces collect personal income tax as a% of federal taxes (tax on tax) using the same number of brackets, boundaries of brackets and progressivity structure. Since 2000 they can and have chosen to use a tax on income approach as noted above. Thus they must make similar choices to those of Autonomous Communities for their Personal Income Tax since 2000.
  • Topic: Economics, Global Recession, Tax Systems, Recovery
  • Political Geography: Europe, Canada, Spain, North America, Western Europe
  • Author: Lance Lochner, Todd Stinebrickner, Utku Suleymanoglu
  • Publication Date: 07-2018
  • Content Type: Working Paper
  • Institution: Centre for Human Capital and Productivity (CHCP), Western University
  • Abstract: Using unique survey and administrative data from the Canada Student Loans Program, we document that parental support and personal savings substantially lower student loan repayment problems. We develop a theoretical model for studying student borrowing and repayment in the presence of risky labor market outcomes, moral hazard, and costly earnings verification. This framework demonstrates that non-monetary costs of applying for income-based repayment assistance are critical to understanding why resources other than earnings lead to greater repayment. We further show that eliminating these non-monetary costs may be inefficient and lead to undesirable redistribution. Empirically, we demonstrate that expanding Canada’s income-based Repayment Assistance Plan to automatically cover all borrowers would likely reduce program revenue by nearly one-half over early years of repayment. Finally, we show how student loan programs can be more efficiently designed to address heterogeneity in parental transfers in the presence of non-monetary earnings verification costs and moral hazard.
  • Topic: Debt, Economics, Human Capital, Higher Education, Productivity, Student Loans
  • Political Geography: United States, Canada
  • Author: Todd Stinebrickner, Ralph Stinebrickner, Paul Sullivan
  • Publication Date: 06-2018
  • Content Type: Working Paper
  • Institution: Centre for Human Capital and Productivity (CHCP), Western University
  • Abstract: Gender differences in current and past job tasks may be crucial for understanding the gender wage gap. We use novel task data to address well-known measurement concerns, including that standard task measures assume away within-occupation gender differences in tasks. We find that unique measures of task-specific experience, in particular high-skilled information experience, are of particular importance for understanding the substantial widening of the wage gap early in the career. Highlighting the importance of these measures, traditional work-related proxies for gender differences in human capital accumulation are not informative because general work experience is similar by gender for our recent graduates.
  • Topic: Economics, Gender Issues, Labor Issues, Human Capital, Higher Education, Productivity
  • Political Geography: United States, Canada
  • Author: Yifan Gong, Todd Stinebrickner, Ralph Stinebrickner
  • Publication Date: 03-2018
  • Content Type: Working Paper
  • Institution: Centre for Human Capital and Productivity (CHCP), Western University
  • Abstract: Uncertainty about future income plays a conceptually important role in college decisions. Unfortunately, characterizing how much earnings uncertainty is present for students at college entrance and how quickly this uncertainty is resolved has proven to be difficult. This paper takes advantage of unique expectations data from the Berea Panel Study to provide new evidence about this issue. We characterize initial uncertainty using survey questions that elicit the entire distribution describing one’s beliefs about future earnings at an ideal time - immediately before students began their first year courses. We characterize the amount of uncertainty that is resolved during college by taking advantage of the longitudinal nature of the expectations data. Taking advantage of a variety of additional survey questions, we provide evidence about how the resolution of income uncertainty is influenced by factors such as college GPA and college major, and also examine why much income uncertainty remains unresolved at the end of college.
  • Topic: Economics, Income Inequality, Human Capital, Higher Education, Productivity
  • Political Geography: United States, Canada
  • Author: Samah Rahman, Shashanth Shetty
  • Publication Date: 07-2015
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Canada is lagging behind in research and development (R&D) commercialization, ranking fifteenth in the World Economic Forum’s 2015 Global Competitiveness Report. One of the most important contributing factors to the gap between R&D and competitiveness is that new entrepreneurs lack the monetary and informational resources to access intellectual property (IP) legal expertise. The authors of this brief argue that the Canadian government’s strategies have been ineffective, and its current policy initiatives have failed to consider the importance of disseminating IP legal knowledge directly to innovators. It is recommended that the government look to the models used by the United States and South Korea to mobilize IP legal knowledge within the entrepreneurial community. This can be achieved by establishing a national IP legal clinic at the university level — as well as increasing funding for existing programs and creating a virtual clinic — and including an IP rights application course in select university programs, targeting innovators who will require IP legal advice in the future.
  • Topic: Economics, Intellectual Property/Copyright
  • Political Geography: United States, Canada, South Korea
  • Author: Oonagh Fitzgerald, Karima Bawa, David Estrin, Kent Howe, Dean MacDougall, Myra J. Tawfik, Basil Ugochukwu, Bassem Awad
  • Publication Date: 04-2015
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The International Law Research Program (ILRP) of the Centre for International Governance Innovation (CIGI) congratulates the Province of Ontario’s Ministry of the Environment and Climate Change for launching a province-wide public consultation process — Ontario’s Climate Change Discussion Paper 2015 — in relation to an issue of global importance and urgency for Ontarians and Canadians alike, at a time when nations need to galvanize their subnationals, climate experts, civil society, business and industry to commit to intended nationally determined contributions (INDCs) to reduce carbon emissions and mitigate the effects of climate change. The CIGI ILRP is optimistic that through this provincial consultation process and implementation of the best ideas it generates, as well as through Ontario’s initiatives undertaken in collaboration with other provinces and foreign subnationals, Canadians will be able to prove to the world our commitment to make a meaningful contribution to achieving an ambitious, verifiable and enforceable international agreement on climate change in December 2015 in Paris. By proactively addressing climate change now, the Government of Ontario positions this province, its citizens, universities and businesses to be innovators for sustainable prosperity rather than victims of global environmental and economic crisis.
  • Topic: Civil Society, Climate Change, Economics, Energy Policy, Environment, Markets, Natural Resources
  • Political Geography: Canada
  • Author: Marius Grinius
  • Publication Date: 06-2015
  • Content Type: Working Paper
  • Institution: Canadian Global Affairs Institute (CGAI)
  • Abstract: Arguably the mid-1990s were Canada’s “Golden Age of Asia”, highlighted by the Team Canada trade visits by Prime Minister Jean Chretien and the provincial Premiers to China, India, Pakistan and Japan, as well as to Indonesia, Malaysia, the Philippines, Vietnam and Thailand. At the same time Canada played a prominent role in Asian security matters. This included Canadian expert participation in multilateral discussions on the South China Sea and in the North Pacific Cooperative Security Dialogue, a Canadian initiative. That particular Golden Age culminated with the Government proclaiming 1997 as “Canada’s Year of Asia Pacific”. Trade statistics indicate that Canada has once again rediscovered Asia, at least in terms of commercial prospects. What is less clear, however, is Canada’s commitment to the security and stability challenges that Asia continues to face. Notwithstanding all of the positive indicators of economic success in the Asia-Pacific region and all of the incentives for even greater prosperity within a predictable and peaceful environment, there are still many instances of potential military conflict that could jeopardize Asia’s economic successes. While Canada has considerable economic interests in Asia Pacific, its security record there is modest. Now, when China is our number two trading partner and Japan is number three, when we have our first Asian Free Trade Agreement, when we are looking to closer economic ties with the Asia-Pacific region, it would make sense for Canada to contribute more substantially to Asia Pacific’s long-term stability and security architecture. It has in the past. Canada has expressed its desire to join the East Asia Summit and the ASEAN Defence Ministers Meeting Plus Forum. It appears, however, that ASEAN is still not quite convinced of Canada’s commitment to Southeast Asia, or to Asia, and continues politely to stall until such time as Canada can show a serious, long-term track record of participation in ASEAN strategic and security priorities. The Asian way requires frequent and consistent face-time. Relationships matter. The regular message from polite ASEAN interlocutors remains the same: where is Canada? From the late 1980s and to about 2006, Canadian academic experts were closely involved in all relevant Asian fora, including the Pacific Economic Cooperation Council, the Council for Security Cooperation in Asia Pacific and the North Pacific Cooperative Security Dialogue. The Canadian Consortium on Asia Pacific Security, a group of some one hundred researchers across Canada, was highly active in Track II diplomacy (informal, non-governmental and unofficial) on Asian security issues. This included Canadian Law of the Sea experts who addressed South China Sea issues, a ten-year effort co-hosted and funded by Indonesia and CIDA. Government of Canada funding for this type of work, however, has dried up. All current Canadian Track II efforts are funded by private institutions. Just when China is taking an aggressive stance in the South China Sea, Canada is absent. Canada must demonstrate a stronger and more consistent commitment to Asia that goes well beyond the economic-commercial dimension. It must include a robust defence and security dimension. Canada has, for now, chosen to emphasize a mercantile foreign policy. Such an approach, however, must not ignore the need for a strong defence policy anchored within a vigorous foreign policy that is able to meet the challenges of the twenty-first century. This applies to Canada’s approach to the Asia-Pacific region as much as to the rest of the world. Neither a “Global Markets Action Plan” nor a separate “Canada First Defence Strategy”, both formulated in a policy vacuum, is sufficient. There is a serious need for a Foreign Policy and complementary Defence Policy review, one where the Asia-Pacific region will be prominent.
  • Topic: International Relations, Security, Economics, Military Affairs, Trade
  • Political Geography: Canada, Asia, North America
  • Author: Francesco Duina
  • Publication Date: 02-2014
  • Content Type: Working Paper
  • Institution: Collaborative Research Center (SFB) 700
  • Abstract: While NAFTA itself does not contain any provisions for governance transfer, its two side agreements (NAALC, NAAEC) prescribe standards in the realm of human rights (labor, environment), the rule of law, and good governance and create a number of instruments for their (indirect) promotion. Through technical assistance, fora for dialogue and exchange, monitoring, and complaints procedures that can result in monetary sanctions, the side agreements aim at promoting the effective enforcement of national law rather than regional standards. These provisions reflect the same concerns in the United States and Canada that lead to the conclusion of the two side agreements in the first place: creating conditions for fair competition in light of Mexico's failure to effectively enforce national laws, resulting in de facto lower labor and environmental standards and thus lower costs compared to the northern neighbours. Beyond formal governance transfer, NAFTA has had an impact on domestic governance reforms in Mexico since the early 1990s as it was used as leverage in both international negotiations and Mexican domestic politics.
  • Topic: Economics, International Trade and Finance, Treaties and Agreements
  • Political Geography: United States, America, Canada, North America, Mexico
  • Author: Michael Clemens
  • Publication Date: 03-2014
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: The most basic economic theory suggests that rising incomes in developing countries will deter emigration from those countries, an idea that captivates policymakers in international aid and trade diplomacy. A lengthy literature and recent data suggest something quite different: that over the course of a "mobility transition", emigration generally rises with economic development until countries reach upper-middle income, and only thereafter falls. This note quantifies the shape of the mobility transition in every decade since 1960. It then briefly surveys 45 years of research, which has yielded six classes of theory to explain the mobility transition and numerous tests of its existence and characteristics in both macro- and micro-level data. The note concludes by suggesting five questions that require further study.
  • Topic: Economics, Migration, Social Stratification, Social Movement, Developing World
  • Political Geography: United States, Canada, Mexico
  • Author: Derek M. Scissors
  • Publication Date: 07-2014
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Chinese foreign investment declined through mid-2014 for the first time since the financial crisis. By sector, energy draws the most investment, but a slump in energy spending means that metals and real estate have been more prominent so far in 2014. The United States has received the most Chinese investment since 2005, followed by Australia, Canada, and Brazil. China invests first in large, resource-rich nations but has also diversified by spending more than $200 billion elsewhere. Chinese investment benefits both China and the recipient nation, but host countries must consider thorny issues like Chinese cyberespionage and subsidies.
  • Topic: Economics, Human Rights, International Trade and Finance, Terrorism, Foreign Direct Investment
  • Political Geography: United States, China, Canada, Asia, Brazil, Australia
  • Author: Daniel H. Rosen, Thilo Hanemann
  • Publication Date: 04-2014
  • Content Type: Working Paper
  • Institution: Asia Society
  • Abstract: WHILE CHINA STARTED INVESTING AROUND THE WORLD in the early 2000s, the first waves of Chinese overseas investment targeted mostly extractive mining activities in developing countries and resource-rich advanced economies such as Australia and Canada. Over the past five years, however, Chinese capital has begun to flow into non-extractive sectors in advanced economies, increasingly targeting technology- and innovation-intensive industries. Initially, the surge of Chinese outward foreign direct investment (OFDI) in the United States largely responded to opportunities in energy and real estate, but access to technology and innovation is now becoming an important driver. In the first quarter of 2014 alone, Chinese investors announced high-tech deals worth more than $6 billion, including the takeovers of Motorola Mobility, IBM's x86 server unit, and electric carmaker Fisker.
  • Topic: Economics, International Trade and Finance, Foreign Direct Investment
  • Political Geography: China, America, Canada, Asia, Australia
  • Author: Leonard Edwards, Peter Jennings
  • Publication Date: 02-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Canada and Australia have shared interests in bolstering economic prosperity and security cooperation across East Asia. The focus of the world economy has shifted to Asia; Canada should follow the path Australia has taken for decades and orient itself — in economic and security terms — toward the emerging economies of East Asia. The risk of regional instability is growing, however, due to China's re-emergence, continued speculation about US strategic engagement in Asia and increased competition over disputed maritime boundaries. These developments provide opportunities for collaboration between countries like Canada and Australia. Non-traditional security threats, including natural disasters, climate change, food security and cyber security, point to a range of areas where the two countries can work more closely together.
  • Topic: Security, Diplomacy, Economics, International Trade and Finance, Bilateral Relations, Governance
  • Political Geography: America, Canada, Australia
  • Author: James M. Boughton
  • Publication Date: 03-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Canadians have long harboured a desire to "punch above their weight" in international diplomacy, an aspiration justified by Canada's position in the world both geographically and culturally. This paper examines one aspect of that effort: Canada's role in international financial governance, particularly within the International Monetary Fund. The key issue for the future is whether Canada will continue to have the capacity and the will to take leading positions and actions in the face of increasing competition from the rapidly growing emerging market countries.
  • Topic: Economics, Emerging Markets, International Trade and Finance, International Monetary Fund, Governance
  • Political Geography: United States, Canada
  • Author: Bruce Muirhead
  • Publication Date: 04-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Canada's system of dairy supply management, where domestic supply is matched with domestic demand, has come under fire in recent years, criticized for being a regulated model in an increasingly deregulated world. This background paper explores the historical evolution of dairy in Canada, and why supply management was eventually implemented in the 1960s, bringing rationality and organization to an industry where none had existed before. It also examines the role of international trade negotiations, largely sponsored by the General Agreement on Tariffs and Trade (GATT) and, after 1995, by the World Trade Organization (WTO), in addressing issues of agricultural protectionism and exceptionalism. It was not until the Uruguay Round (1986–1993), however, that agriculture was included in these negotiations, as neither the European Union (and its antecedents) nor the United States demonstrated any interest. While Uruguay was a tentative beginning, the subsequent Doha Round has dissolved over agricultural problems. In all these venues, supply management has been protected by Canadian governments, but rising international pressure has led Canada to begin to reconsider its support, especially as bilateral trade negotiations and partners are unequivocally opposed to dairy supply management.
  • Topic: Agriculture, Economics, International Trade and Finance, World Trade Organization, Bilateral Relations
  • Political Geography: Canada, North America
  • Author: Patricia M. Goff
  • Publication Date: 07-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: In October 2013, Prime Minister Stephen Harper announced that the Government of Canada had reached a "political agreement" with the European Union on the Comprehensive Economic and Trade Agreement (CETA). The timing of Mr. Harper's statement was not coincidental. Evidence suggests that talks between Canada and the European Union are actually continuing several months after his announcement, if only on technical elements. Nonetheless, it seems the Government of Canada wanted to signal that a successful end to Canada-EU talks was in sight, just as talks between the United States and the European Union were getting under way towards the Trans-Atlantic Trade and Investment Partnership (TTIP). The Canadian government did not want to risk a redirection of European energies away from the Canadian negotiation toward their American counterparts.
  • Topic: Economics, International Trade and Finance
  • Political Geography: Europe, Canada
  • Author: Bill White(Chair), Leonard Coburn(Rapporteur)
  • Publication Date: 09-2013
  • Content Type: Working Paper
  • Institution: Aspen Institute
  • Abstract: Improved technology has led to enhanced oil and gas productivity at lower cost and significant production increases in the United States and Canada, dramatically changing energy perspectives. The shift from energy scarcity toward abundance is requiring new energy policies. The potential for the United States to become a net exporter of oil and gas changes American views of energy dependency. Shifts in global energy demand growth from developed to less developed countries, and especially to the Asia-Pacific region, require understanding of changing global energy trade. American energy will flow to markets where scarcity is the largest. Canada and the United States are reaping the benefits of this new world of oil and gas. Mexico will lag behind unless it addresses its chronic problems. Without reform, Mexico could become a net importer of all its hydrocarbons, a fundamental change from its current status. Responding to these changes will require knowledge, foresight, and strategies that are bold and comprehensive.
  • Topic: Economics, Energy Policy, Environment, Oil, Natural Resources
  • Political Geography: United States, America, Canada, Mexico
  • Publication Date: 08-2013
  • Content Type: Working Paper
  • Institution: Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
  • Abstract: The ASEAN-Canada Enhanced Partnership Plan of Action (2010- 2015) represents the latest effort in a relationship that dates back to 1977, the year that Canada became one of the first countries to be designated a Dialogue Partner of ASEAN. According to the Plan of Action, ASEAN and Canada will 'work and consult closely in responding to regional and international challenges, and in building an ASEAN-centred regional architecture which is open and inclusive'. They will also 'promote the development of enhanced ASEAN connectivity which will help foster the building of an ASEAN Community by 2015'.
  • Topic: Development, Economics, Treaties and Agreements
  • Political Geography: Canada, Asia
  • Author: James Manicom
  • Publication Date: 08-2013
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: There are a number of strategic challenges currently affecting the Asia-Pacific. In a period of global uncertainty, China has emerged as a confident and powerful actor, while the ability of the United States to remain the region's hegemonic power has come into question. Maritime boundary claims, regionalism and unresolved Cold War sovereignty disputes are a source of considerable uncertainty. A number of non-traditional security challenges are also emerging, including energy and food insecurity, cyber security and the threat of a climate catastrophe-related humanitarian crisis. Canada and Australia — resource-based economies with a record of bilateral and institutional engagement in the region, and important US allies — have an interest in these challenges, and in ensuring regional strategic stability that promotes economic growth.
  • Topic: Development, Economics, Governance
  • Political Geography: United States, China, Canada, Israel, Australia, Australia/Pacific, Asia-Pacific
  • Author: Sarah Norgrove
  • Publication Date: 09-2013
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The possibilities for future Asia-Pacific security cooperation between Australia and Canada are promising. Economic development and population growth mean that security challenges present themselves as opportunities. Australia and Canada are well positioned to influence regional approaches to transnational challenges such as crime, terrorism, piracy and environmental degradation, and to contribute to food, energy and cyber security. This paper explores the current state of security cooperation between Australia and Canada in the Asia-Pacific, and identifies opportunities to extend the relationship, focussing on collaborative efforts like economic and maritime cooperation, which may help tackle transnational security challenges.
  • Topic: Security, Development, Economics, International Trade and Finance, Treaties and Agreements
  • Political Geography: Canada, Asia, Australia
  • Author: Pierre Siklos, Martin T. Bohl, Arne C. Klein
  • Publication Date: 12-2013
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Existing models of market herding suffer from several drawbacks. Measures that assume herd behaviour is constant over time or independent of the economy are not only economically unreasonable, but describe the data poorly. First, if returns are stationary, then a two-regime model is required to describe the data. Second, existing models of time-varying herding cannot be estimated from daily or weekly data, and are unable to accommodate factors that explain changes in this behaviour. To overcome these deficiencies, this paper proposes a Markov switching herding model. By means of time-varying transition probabilities, the model is able to link variations in herding behaviour to proxies for sentiment or the macroeconomic environment. The evidence for the US stock market reveals that during periods of high volatility, investors disproportionately rely on fundamentals rather than on market consensus.
  • Topic: Economics, Globalization, International Trade and Finance, Markets, Financial Crisis
  • Political Geography: United States, Canada
  • Author: Christopher Sands, Duncan Wood, Laura Dawson
  • Publication Date: 11-2013
  • Content Type: Working Paper
  • Institution: Hudson Institute
  • Abstract: The 1994 North American Free Trade Agreement (NAFTA) among Canada, Mexico, and the United States was a bold experiment in economic integration and regional cooperation. To be successful, the initiative demanded political leadership and a commitment to regionalism. It required a vision that extended beyond short-term national interest and it demanded creative thinking about how three large countries could integrate their markets in a meaningful way.
  • Topic: Economics, International Trade and Finance, Treaties and Agreements
  • Political Geography: United States, Canada, North America, Mexico
  • Author: Theodore H. Moran, Julia Muir, Barbara Kotschwar
  • Publication Date: 02-2012
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: China's need for vast amounts of minerals to sustain its high economic growth rate has led Chinese investors to acquire stakes in natural resource companies, extend loans to mining and petroleum investors, and write long-term procurement contracts for oil and minerals in Africa, Latin America, Australia, Canada, and other resource-rich regions. These efforts to procure raw materials might be exacerbating the problems of strong demand; "locking up" natural resource supplies, gaining preferential access to available output, and extending control over the world's extractive industries. But Chinese investment need not have a zero-sum effect if Chinese procurement arrangements expand, diversify, and make more competitive the global supplier system. Previous Peterson Institute research (see Moran 2010) and new research undertaken in this paper, show that the majority of Chinese investments and procurement arrangements serve to help diversify and make more competitive the portion of the world natural resource base located in Latin America. For a more comprehensive analysis, the authors conduct a structured comparison of four Peruvian mines with foreign ownership: two Organization for Economic Cooperation and Development-based, and two Chinese. They examine what conditions or policy measures are most effective in inducing Chinese investors to adopt international industry standards and best-practices, and which are not. They distill from this case study some lessons for other countries in Latin America, Africa, and elsewhere that intend to use Chinese investment to develop their extractive sectors: first, that financial markets bring accountability; second, that the host country regulatory environment makes a significant difference; and third, that foreign investment is a catalyst for change.
  • Topic: Economics, International Trade and Finance, Natural Resources
  • Political Geography: China, Canada, Latin America, Australia
  • Author: Jeremy A. Leonard
  • Publication Date: 03-2012
  • Content Type: Working Paper
  • Institution: Aspen Institute
  • Abstract: As the United States struggles to find a politically acceptable and economically sensible solution to its severe fiscal crisis, hidden in plain sight just North of the 49th parallel is an example that ought to be considered more carefully. Quietly, but steadily, under governments of all political stripes, Canada has profoundly re-structured its economy, gotten its fiscal house in order, created a competitive business tax environment, and come into its own as a strong economic player in North America and beyond.
  • Topic: Debt, Economics, International Trade and Finance, Markets, Bilateral Relations
  • Political Geography: United States, Canada
  • Author: Deborah Elms, C. L. Lim
  • Publication Date: 02-2012
  • Content Type: Working Paper
  • Institution: Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
  • Abstract: The Trans-Pacific Partnership (TPP) is a trade agreement currently under negotiation between nine countries in three continents, including Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, United States and Vietnam. In late 2011 three additional countries--Japan, Canada and Mexico--announced their intention to join as well. The TPP has always been called a "high quality, 21st century" agreement that covers a range of topics not always found in free trade agreements. This includes not just trade in goods, services and investment, but also intellectual property rights, government procurement, labor, environment, regulations, and small and medium enterprises. This paper traces the complex negotiations and evolution of the talks since the early 2000s to the present.
  • Topic: Economics, Environment, International Trade and Finance, Treaties and Agreements, Labor Issues, Intellectual Property/Copyright
  • Political Geography: United States, Japan, Malaysia, Canada, Israel, Vietnam, Latin America, Australia, Australia/Pacific, Mexico, Singapore, Chile, Peru, New Zealand, Brunei
  • Author: Perrin Beatty, Andrés Rozental
  • Publication Date: 11-2012
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Both Canada and Mexico are recovering well from the global economic recession of 2008-2009, but must work harder to make their bilateral relationship work to their mutual benefit. Bilateral trade and investment have grown steadily from very low pre-North American Free Trade Agreement (NAFTA) levels, but there remains enormous, untapped potential, particularly in Mexico. Student, tourist, investor and temporary worker exchanges are enhancing familiarity with each other, but unhelpful stereotypes remain common. New investment and trade opportunities should flow from the new Mexican administration's commitment to open up the energy sector to foreign participation. The assessment and recommendations contained in this special report point to the benefit of efforts that will intensify bilateral partnerships, not only in their own right, but also in strengthening the two countries' ability to deal more effectively with the United States in pursuing matters of mutual concern.
  • Topic: Economics, International Trade and Finance, Markets, Bilateral Relations
  • Political Geography: United States, Canada, Latin America, North America, Mexico