EC304 Revision (3)

amarjotsidhu's version from 2017-05-26 12:36

Trade (economics)


Question Answer
Are countries that trade richer?Frankel and Romer (1999) - countries with 1% higher trade as a % of gdp have 0.5%-2% higher income (use geography as an instrument for trade)
Govt. tools for tradeimport tariffs, import quotas, export subsidies and NTBs
Optimal import taxuniform tax (on all sales of good) = less distorting than tariff and will generate more tax revenue vs. deadweight losses of tariff
Negative aspects of tariffthey benefit domestic producers only (they are more likely to be organised than domestic consumers - collective action olson) + they affect low and middle income consumers disproportionately
Industry contributions and protectionGoldberg and Maggi (1995) - industries that made more contributions receive more protection
HO Model predictioncountry will specialise in production of the good which uses its abundant factor of production (will export it). The price of this goes up
SS resultincrease in relative price of product that is exported will increase the returns on the factor used intensively in production
Impact of HO model and SS result for countriesit will increase wage inequality and returns to capital in developed countries
Why hasn't distribtional effects of trade received significant attention until recentlychanges in technology, taxes, regulaitons have had greater distributional effects + given overall gains from trade, losers can be compensated
Distributional impact in US of increased chinese competitionAutor, et al (2013) - data 1990 - 2007 ; large geographic differences in exposure based on where industries that are more exposed to import competition are clustered; areas with more exposure to import competition = had higher unemployment, lower wages and more govt. transfers ; effects do not dissipate nationally (workers do not move + local markets impacted for nearly a decade)
German response to higher import competitonDauth et al 2014 - german facing increased import competition from china and Eastern europe. it ended up exporting more to these areas = compensated for import competition losses
Alternative policies to tariffssafety net + springboard
Protectionist support vs. import ccompetitionFeigenbaum and Hall (2015) - politicians from areas more exposed to trade with China more likely to support protectionist bills
Election impact of import competitionAutor et al 2016 - congressional districts with higher exposure to chinese imports more likely to elect more ideologically extreme candidates on either side of political spectrum e.g. areas who were more exposed to import competition gave trump a higher vote share vs. Bush
Political influence and trade during cold warBerger et al 2013. - countries in which the US intervened saw a big increase in US imports but no associated increase in exports. US able to export more particularly in areas where it had a comparative advantage
Unequal gains from trade in populationFaigelbaum and Khandewal - 2014 - gains from tradeare typically biased towards the poor who tend to concentrate expenditures in sectors that are more trades
Trade and skill premiumincreased trade accounts for about 10-20% of the rising skill premium in the US
Trade and demand for social insuranceRodrik - 2007 - increase in shares of trade as a % of gdp in OECD countries since mid 60s by 5% points leads to a 0.3% decline in social spending
Inequality in developing countriesexpected to go down when they initially enter but has been going up due to MNCs (The Economist)
Globalisation and within country inequalityDreher and Gaston 2008 - in OECD countries, a one point increase in globalisation index increases wage inequality by 26%
Strength of party and preferences for tradeHankla 2006 - democracies with strong parties will choose freer trade policies - have stablr connection to electorate and consider long time horizsons = support open policies that provide long run economic benefits

Media (economics)


Question Answer
Role of media vs. individualsinformation acquisition and trasmission has high fixed cost and lower marginal cost
How much is media support worth vs. other groups?McMillan and Zoido (2004) - consider 2000 Peru election where president bribed politicians, media, cabinet, etc. findings: bribes given to media owners > anyone else. Why? - higher incomes of media owners = need higher bribe to match proportionality; marginal value of tv station > marginal value of politician; all stations must be bribed
Influence of politics on mediaDjankov et al (2003 ) - 97 countries, state owns about 30% of press and 64% of tv (more common in autocratic regimes)
Media biasGentzkow and Shapiro (2006) - media can introduce bias into coverage. competition has reduce bias if prob. of bias being discovered is higher or can lead to segmentation of market according to bias ; people adjust their consumption on the basis of beliefs about bias
Does slanted media affect voting?Kaplan (2007) - considers entry of fox news on republican vote share between 1996 and 2000 US presidential eleciton. Fox news increased voter turnout by 1.78% and increased republican vote share by 0.4-0.7%
Do people change their views more if media reports contrary to bias?Chiang and Knight (2008) - considered endorsements of presidential candidates in newspapers that are surprises i.e. contrary to bias of newspaper. Found that endorsements do have influence but that influence depends on credibility - less influence if democratic bias paper endorses democratic candidate
Resource poor dictators and media freedomEgerov et al 2009 - in resource rich countries, value of staying in office = greater and need to provide incentives to bureaucracy to generate positive outcomes is less = less media freedom; in resource poor countries, dictator needs an independent source of info so he can judge impact of policy outcomes which is needed to provide incentives for bureaucracy. Condition in this case: media cannot leak to citizens

Media (politics)


Question Answer
Need for framinginfo is raw and 1 dimensional
Propaganda modele.g. chomsky. media survive to propagandize on behalf of powerful interests; selection of sympathetic journalists + 'experts' to confirm slant on policies
Media can shape view of historye.g. US in Indochina
Era ot meta-coverageGitlin 1991 - every political move and word is planned, rehearsed and delivered by a pervasive media
Tabloidisation of news coverage of politicsEsser 1999 - coverage less focused on facts and more on interpretation
Social medialacks actual power - more needs that are unmet, rests on free riders, tiny part of internet tarffic (1-2%), act as a distraction e.g. pornography
Social media and representationHay 2007 - shift from institutionalised to non-instiutionalised forms of participation
Social media and protestgives dissidents cheap, secure tools of communication, makes bloody crackdowns riskier and reduces marginal cost of protest
Recreation of traditional media structuressocial media still based around responding to comments on tv/radio/newspapers
Soundbitesmosely 2000 - dumbing down politics to advertising jingle