Canadian Journal of Economics-Revue Canadienne D Economique最新文献

This paper studies the dynamic evolution of the patterns of Ricardian comparative advantage from the perspective of knowledge diffusion. The theoretical analysis builds knowledge diffusion into a quantifiable model of trade by allowing for industry-level productivity to evolve through a spatial flow of ideas. This theoretical framework yields a law of motion of industry-level productivity across countries, capturing strong interdependence in the evolution of Ricardian comparative advantage. We calibrate the model to 78 economies and 15 manufacturing industries, spanning from 1991 to 2017. Our quantitative framework captures strong convergence in industry-level productivity and facilitates the identification of the key players that contribute most to global productivity growth. We use our model to draw a rich set of quantitative implications, including a welfare analysis of targeted restrictions of technology trade.

To shed light on the causes and consequences of automation decisions, this paper introduces robots replacing workers in a small open economy model with search and matching frictions and capital, estimated for the Canadian economy. A technological factor, the automation-specific technology, drives the probability of a firm to automate and, thereby, generates productivity gains and influences the fluctuations in productivity, investment, and the labour income share. Such a technology triggers a pro-cyclical labour displacement effect that exceeds its job creation effect but the net result on unemployment is quantitatively small, rendering it a small contributing force to unemployment fluctuations. A model with automation decisions fits better the data than models without them, influences the relative importance of supply-side and labour-market sources of business cycles, yields wage rigidity, and amplifies the volatility of productivity.

This paper evaluates the impact of two large export finance support schemes on firm-level export performance. The Export Finance Scheme (EFS) and the Long-Term Finance Facility for Plant & Machinery (LTFF) provide loans at subsidized interest rates for Pakistani exporters to finance working capital and the purchase of machinery and equipment, respectively. We combine customs data with information on firms' participation in each program between 2015 and 2017 and use matching combined with difference-in-differences to estimate the effect of the subsidies on firms' export values, the number of products exported and the number of destinations they serve. We find that both programs deliver a large and positive impact on export growth rates—primarily along the intensive margin—and do so in an effective way relative to the direct financial cost of the subsidies.

This paper examines the long-term impacts of negative health shocks on healthcare utilization and labour market outcomes by applying a dynamic difference-in-differences estimator to a sample of heart attack and stroke survivors in Taiwan. To investigate who is more affected by these health shocks, we estimate differential effects by age, healthcare utilization, and income. We find that low-income individuals are less likely to survive but more likely to utilize healthcare and remain employed after the health shocks, indicating the existence of a socioeconomic health gradient. Moreover, nonemployed workers are more likely to start working, which could be attributed to increased financial needs following the health shocks. Building upon our empirical findings, we conduct counterfactual assessments to evaluate health-enhancing policies from a social perspective.

We examine the macro implications of commodity price shocks in a small open economy model with input–output linkages for a commodity-exporting small open economy. In the model, fluctuations in commodity prices have impacts on aggregate output not only through resource reallocation, currency value changes and monetary policy reaction but also through upstream and downstream input–output linkages (both domestically and with the rest of the world). We show the importance of input–output linkages as a shock transmission mechanism. We find that production linkages with the rest of the world play a significant role in amplifying the shock's aggregate impact.

Personalized medicine remains in its early stages, with expensive genetic tests offering limited actionable insights for prevention. As a result, few individuals undergo testing, and health insurance contracts pool all agents regardless of genetic background. However, as tests become cheaper and more informative, more people may choose to get tested, influencing both insurance pricing and contract types. We examine how the proportion of individuals taking genetic tests and the informativeness of these tests affect whether equilibrium contracts remain pooling or become separating. We find that increasing test uptake can reduce welfare, particularly when it leads to a shift from pooling to separating contracts. Similarly, lower prevention effort costs, reflecting more informative tests, can harm welfare if they induce separation. These findings suggest that policies promoting genetic testing or reducing prevention costs may not always be beneficial, especially when the market equilibrium remains in a pooling state.

We analyze insurance market outcomes and customer utility under asymmetric information when customers have heterogeneous privacy concerns and access to a screening technology that permits their private information to be revealed. If the market outcome without the technology is of the Rothschild–Stiglitz type, so too is the market outcome with the technology for those who do not submit to the screening technology and thus retain their private information. Low-risk customers who reveal their private information are better off and those who do not reveal their risk type are no worse off, resulting in a Pareto improvement. If, however, the market outcome without the technology is of the Wilson–Miyazaki–Spence type, the market may no longer exhibit cross-subsidies after the screening technology is introduced. In this case, low-risk customers who reveal their risk type are better off, but this is at the expense of those who do not reveal their risk type, who are worse off due to intensified adverse selection. The negative externality on those who do not reveal their risk type can outweigh the utility gains of those low-risk customers who do reveal their risk type, resulting in lower expected welfare. In this case, a privacy law would improve expected welfare.

The accumulation of large genetic data is crucial for the scientific advancement of genetic research and precision medicine, but various participation biases threaten the validity of genetic research data sets. To better understand the decision to participate and its relationship with economic incentives and preferences, we studied the stated willingness to donate DNA for science by saliva sample in a representative panel of Dutch households. There were two randomized treatments, varying (i) the information material on benefits and risks and (ii) the intended financial incentive. The first treatment had no detectable effect, suggesting insensitivity to the information material. The higher incentive conditions had modest and diminishing effects, suggesting that offering higher incentives is not cost-effective. Stated reasons not to donate DNA concentrated on personal risks, e.g., privacy violations and data exploitation. Accordingly, stated risk willingness was found strongly associated, followed by trust and positive reciprocity. Revealed economic preferences were not associated. The results support previous findings for self-rated health, interpersonal trust and confidence in science or societal institutions but not for certain demographic variables (e.g., age, education and religiosity). We conclude by proposing strategies to encourage participation, e.g., to reallocate resources to risk-minimizing or compensatory measures.

We investigate elasticity of policy preferences to information about the economic effects of policy tools. We survey approximately 5,000 people and ask a referendum question about liberalizing supply management in Canada. Supply management regulates production and marketing of dairy and poultry products in Canada through production restrictions, regulated pricing, and import barriers. Support varies widely across political-party affiliation, and across individuals with different views on redistributive fiscal policies, international trade liberalization, and perceptions of how supply management affects food prices. We estimate causal effects of information about personal costs and distributional effects of supply management on support for the policy in a randomized experiment. Treated participants receive personalized information about how supply management affects household grocery costs, and information about the policy's distributional effects. Policy support is responsive to information treatments, but these effects are small relative to differences in support across individuals' views on economic issues such as international trade and fiscal redistribution policies. We find little evidence of heterogenous treatment effects across respondent characteristics, suggesting the effects of our information treatments are not tied to views about political and economic issues.

This study presents a model that relates the efficiency of environmental regulatory competition to excess entry by firms. The two key results are as follows. First, when emissions remain localized, stringent environmental regulation leads to insufficient firm entry owing to negative external effects on the damage caused by emissions in other countries. Second, if emissions spill over globally, akin to CO$��{�\hspace{0.17em}�}_{�2�}�$ causing global warming, the impact of emissions on welfare will be uniform across countries. In this case, the positive and negative external effects of tightening regulation cancel each other out, yielding the second-best levels of regulation and firm entry.