Essays on international and environmental economics
Date
2012-09
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University of Western Ontario
Abstract
This thesis consists of three chapters employing quantitative open economy
models to study international trade transmission, the economic impacts of climate
change, and remittance transfers.
The first chapter examines the role of production sharing and trade in the
transmission of the 2008-2009 recession. In the model, production sharing is
represented by a tradable sector that produces a composite good exclusively for
the foreign market. The results suggest that trade transmission can account
for 72% of the fall in output in Canada, 19% of the fall in output in Mexico,
and about two-thirds of the fall in trade for both countries. The counterfactual
experiments find that production sharing can account for about 40% of the fall
in international trade, and 12% of the fall in output.
The second chapter quantifies the net economic impact of climate change
and climate change policy on the Canadian economy. We combine a small open
economy model of Canada with the ANEMI model, an integrated assessment
model developed at Western University. We find that while a carbon tax that
holds the stock of global emissions below the 550 ppm level would yield positive
net benefits for the world economy, the impact of such a tax on the Canadian
economy would be negative. (Joint with Jim MacGee and Jim Davies). The third chapter examines the impact of remittance transfers on the allocation
of productive factors across sectors in Latin American and Caribbean
countries. It extends a two-sector open economy model to include an endogenous
migration decision. Key findings are that net recipients of remittance
payments experience a reallocation of productive factors from the tradable sector
to the non-tradable sector, and that the benefit from remittance inflows is
lower for countries which have a relatively less productive non-tradable sector.
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Keywords
ECONOMICS, INTERNATIONAL TRADE, CLIMATE CHANGE, REMITTANCES, CARBON TAX