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

Canada plans to phase out internal combustion engine vehicle (ICEV) sales in favour of electric vehicles (EVs) by 2035 as part of its climate policy. Herein I examine the economic implications of a phased-in electric vehicle mandate. I show using partial equilibrium analysis that when both types of cars are available, auto companies will overproduce electric vehicles and earn scarcity rents on internal combustion engine vehicles that partially offset the revenue loss on electric vehicles. I then present a numerical general equilibrium model of the Canadian economy to assess the overall macroeconomic consequences of the policy. The results depend critically on the assumed pace at which electric vehicles achieve cost parity with internal combustion engine vehicles on a quality-adjusted basis. An electric vehicle mandate will have manageable economic consequences if technology improves so rapidly that the mandate is unnecessary. If the mandate outpaces achievement of cost parity the economic consequences can be severe and would likely cause the auto manufacturing sector to shut down. The cost per tonne of emission reductions are at least 10 times the Canadian carbon tax rate while the mandate is binding. The analysis provides insight into why automakers have been willing hitherto to develop and sell electric vehicles even though they currently lose money on them.

This paper investigates whether evaluation outcomes are influenced by private information and subjective biases when appraisers and appraisees are socially connected. In the Korean Basketball League, school ties between referees and players are commonplace because a large proportion of referees were previously basketball players. Using data from six basketball seasons, we analyze the degree to which referees' decisions are affected when players and referees attended the same school. Our results suggest that players who play under referees with school ties are called for fewer fouls. We also find that the results are driven mainly by high school ties.

I develop and implement a methodology for cohort life expectancy using a panel of administrative tax data on a large sample born between 1930 and 1964. Over these 35 years, cohort life expectancy after age 54 grew by five years for women and seven years for men. The income–longevity gradient for the top 5% vs. bottom 5% of incomes is nine years of post-54 life for men and seven years for women. The life expectancy improvements arise across the income distribution in Canada, unlike the United States. Large differences across neighbourhoods emerge that cannot be explained by income differences alone.

This paper examines the role of home production in gender-based responses of time use to the COVID-19 pandemic. We develop a tractable model featuring time allocation choices and susceptible-infected-susceptible epidemiological dynamics. The model economy has two steady states, and an outbreak can trigger a transition from a disease-free steady state to an epidemic steady state, accompanied by a shift in economic activity toward the home. Our parameterized model well reproduces pandemic-driven variations in time allocation in the US. This stems largely from the combination of three key features of home production: the high substitutability between market goods and home goods, the asymmetric immunity of home production to the epidemic and the comparative advantage of women in household work. Our decomposition analysis finds that elevated home production accounts for a sizable share of changes in market work and its gender gap during the pandemic. Remote work limits fluctuations in time use but worsens gender inequality in market work.

We consider an international cartel whose members interact repeatedly in their own as well as in third-country markets. Cartel discipline—an inverse measure of the degree of competition between firms—is endogenously determined by the cartel's incentive compatibility constraint, which strategically links markets that are otherwise independent. This linkage implies that trade cost reductions induce cartel members to adjust their sales, not only because of direct but also because of spillover effects. We apply these ideas to preferential trade agreements and show that the indirect effects can give rise to trade diversion. We also characterize the welfare effects of preferential tariff cuts for all countries and identify circumstances under which preferential trade liberalization is welfare-reducing.

If a profit-maximizing firm credibly commits to an employment-enhancing corporate social responsibility objective in negotiations with a trade union, the union can reduce its wage demands. Lower wages, ceteris paribus, raise profits, while the increase in employment enhances the payoff of a wage-setting trade union. Therefore, both the firm and the trade union can be better off in the presence of a collectively bargained corporate social responsibility objective than in its absence. Accordingly, establishing a corporate social responsibility objective can give rise to a Pareto improvement and mitigate the inefficiency resulting from collective wage negotiations.

We develop a spatial equilibrium model to quantify welfare losses from land market distortions in China. In the model, heterogeneous firms in various sectors choose their locations across regions with costly trade, frictional labour migration and land market distortions. We match land transaction and firm-level survey data to estimate land market distortions for firms. Misallocation arises when similar firms are faced with land prices that effectively prevent productive firms from establishing in large cities where they can benefit from agglomeration forces and access higher productivity. Our framework incorporating land market distortions also sheds light on the mystery of China's undersized big cities, a phenomenon noted by Au and Henderson (2006) and Chauvin et al. (2017). Our estimates suggest large negative effects of land policies on the economic welfare in China. We end with a counterfactual exercise revealing that a coordinated land and labour migration reform would generate welfare gains and reduce regional inequality.

This article investigates the implications of observational learning for firm dynamics. Because consumers learn through past purchase decisions, monopolistic firms can induce information cascades through prices. We characterize when cascades arise and argue that the fragile nature of cascades is reflected in firm-level data. We measure fragility using reversals: periods when a firm with historically stable revenues experiences a large, sudden change in earnings. We document a robust pattern that the frequency of reversals among stable firms declines with age, and show a calibration exercise delivers an untargeted age profile in line with the data. Finally, efficiency is discussed.

In this paper, we show that a reduction in capital goods prices induced by trade policies can stimulate both investment and labour. We exploit a quasi-natural experiment in the form of a trade reform in Colombia to study how firms with differential exposure to reductions in capital goods tariffs react in terms of their investment and labour decision. Firms that see a larger decline in the input tariff for capital goods increase investment and labour for production, as well as their labour share. Reductions in input tariffs are passed through to input prices for all goods. However, only lower prices for capital, not for other goods, translate into more investment and employment of production workers.

In this paper, we investigate the impact of the announcement in 1952 of a change in Canadian cultural policy, namely the reorganization of the National Film Board (NFB) and the move of its headquarters from Ottawa to Montréal, on movie demand. Using weekly box office revenue data for a subsample of movie theatres in Toronto and Montréal from 1945 to 1955, we estimate the impact of this policy change with a triple difference estimator and find that the NFB headquarters move in Canada was followed by a decrease in movie attendance for movies produced in anglophone countries and an increase in movie attendance for French movies in Montréal. We complement our analysis with Odesi public poll Canadian data from 1949 to 1959 and find that poll respondents from Quebec held a more negative opinion about the decisions of the Canadian government and the tide of Americanization, relative to respondents elsewhere, and that their opinion deteriorated further after the relocation announcement and the relocation itself took place. This finding is consistent with our hypothesis that the relocation of NFB headquarters caused political backlash and triggered a boycott against anglophone, especially American, movies in Quebec.