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11577 results in Macroeconomics

Page 436 of 579

  • 8 - Industrial Agglomeration under Marshallian Externalities

  • Masahisa Fujita, Kyoto University, Japan, Jacques-Francois Thisse, Université Catholique de Louvain, Belgium
  • Book:
    Economics of Agglomeration
    Published online:
    05 June 2012
    Print publication:
    02 May 2002, pp 267-302

  • Summary

    INTRODUCTION

    The work of Marshall has been very influential in regional and urban studies and has led to the concept of Marshallian externalities, which aim at accounting for the benefits associated with cluster formation. As seen in Chapter 1, these benefits arise because of

    1. the formation of a highly specialized labor force and the development of new ideas, both based on the accumulation of human capital and face-to-face communications (the latter has been analyzed in Chapter 6);

    2. the availability of specialized input services (see Chapter 4); and

    3. the existence of modern infrastructure (see Chapter 5).

    From the point of view of this chapter, the main distinctive feature of these externalities is that they affect only the agents belonging to the same geographical area. They do not spread over other regions or, more precisely, their impact on distant regions may be considered negligible.

    The now standard classification of Marshallian externalities is attributed to Hoover (1936, chap. 6): (1) the localization economies, which are defined as the benefits generated by the proximity of firms producing similar goods; and (2) the urbanization economies, which are defined by all the advantages associated with the overall level of activity prevailing in a particular area. These external effects have been studied extensively from the empirical standpoint (see, e.g., Henderson 1988, chap. 5, and the references therein). For example, Hanson (1996, 1266) accurately points out that “the fact that New York City remains a major apparel producer is perhaps the most persuasive evidence one can find of localization economies.”

  • 11 - On the Relationship between Agglomeration and Growth

  • Masahisa Fujita, Kyoto University, Japan, Jacques-Francois Thisse, Université Catholique de Louvain, Belgium
  • Book:
    Economics of Agglomeration
    Published online:
    05 June 2012
    Print publication:
    02 May 2002, pp 388-432

  • Summary

    INTRODUCTION

    The likely main effect of interregional and international integration is to increase economic efficiency within the space-economy. However, as seen in Chapter 9, market expansion may well be accompanied by the development of some core regions whose wealth is, in part, obtained at the expense of peripheral regions: the average welfare in the region accommodating the modern sector rises but decreases in the other region. So far, however, such a result has been obtained using static models in which the total number of firms and varieties, which is determined by the parameters of the economy, is constant. It is, therefore, of fundamental importance to determine what the core–periphery property becomes in a dynamic setting in which the number of firms grows over time. In other words, we want to deal with the following question: How do growth and location affect each other? More precisely, we want to know whether regional discrepancies widen or fall over time, as well as the main reasons for such a possible divergence or convergence. Because in the context of human history, the current disparities between rich and poor regions are recent (Bairoch 1993, chap. 9), it is important to understand how they may change over time. Regional discrepancies are often considered socially undesirable, and the issue is consequently critical from the policy standpoint. If compelling evidence is found that the existing disparities are likely to persist or, worse, that growth and agglomeration will make those living in the periphery worse off, then governments and international bodies should become more active in designing policies to foster a more equitable distribution of wealth across nations and regions.

Economics of Agglomeration
  • Cities, Industrial Location, and Regional Growth
  • Masahisa Fujita, Jacques-Francois Thisse
  • Published online:
    05 June 2012
    Print publication:
    02 May 2002
  • This book provides the first unifying treatment of the range of economic reasons for the clustering of firms and households. Its goal is to explain further the trade-off between various forms of increasing returns and different types of mobility costs. Although referring to agglomeration as a generic term is convenient, it should be noted that the concept of economic agglomeration refers to distinct real world situations. The main focus of the treatment is on cities, but it also explores the formation of agglomerations, such as commercial districts within cities, industrial clusters at the regional level, and the existence of imbalance between regions. The book is rooted within the realm of modern economics and borrows concepts from geography and regional science, which makes it accessible to a broad audience formed by economists, geographers, regional planners, and other scientists. It may be used in coursework for graduate students and upper-level undergraduates.

  • 9 - Industrial Agglomeration under Monopolistic Competition

  • Masahisa Fujita, Kyoto University, Japan, Jacques-Francois Thisse, Université Catholique de Louvain, Belgium
  • Book:
    Economics of Agglomeration
    Published online:
    05 June 2012
    Print publication:
    02 May 2002, pp 303-348

  • Summary

    INTRODUCTION

    The spatial economy is replete with pecuniary externalities. For example, when some workers (firms) choose to migrate, they are likely to affect both the labor and product markets in their region of origin as well those in their region of destination. Such pecuniary externalities are especially relevant in the context of imperfectly competitive markets because prices do not perfectly reflect the social values of individual decisions. Pecuniary externalities are also better studied within a general equilibrium framework to account for the interactions between the product and labor markets. Among other things, this allows one to study the dual role of individuals as workers and consumers. At first sight, this seems to be a formidable task. Yet, as shown by Krugman (1991a), several of these various effects can be combined and studied within a relatively simple general equilibrium model of monopolistic competition, which has come to be known as the core–periphery model.

    Recall that monopolistic competition à la Chamberlin (1933) involves consumers with a preference for variety (varietas delectat), whereas firms producing these varieties compete for a limited amount of resources because they face increasing returns. The prototype that has emerged from the industrial organization literature is the model developed by Spence (1976) and Dixit and Stiglitz (1977), which is sometimes called the S-D-S model. These authors assumed that each firm is negligible in the sense that it may ignore its impact on, and hence reactions from, other firms, but retains enough market power for pricing above marginal cost regardless of the total number of firms (like a monopolist).

  • 1 - Agglomeration and Economic Theory

  • Masahisa Fujita, Kyoto University, Japan, Jacques-Francois Thisse, Université Catholique de Louvain, Belgium
  • Book:
    Economics of Agglomeration
    Published online:
    05 June 2012
    Print publication:
    02 May 2002, pp 1-22

  • Summary

    INTRODUCTION

    Just as matter in the solar system is concentrated in a small number of bodies (the planets and their satellites), economic life is concentrated in a fairly limited number of human settlements (cities and clusters). Furthermore, paralleling large and small planets, there are large and small settlements with very different combinations of firms and households. This book is a study of the reasons for the existence of a large variety of economic agglomerations. Even though economic activities are, to some extent, spatially concentrated because of natural features (think of rivers and harbors), our goal is to focus on economic mechanisms yielding agglomeration by relying on the trade-off between various forms of increasing returns and different types of mobility costs.

    One should keep in mind that the concept of economic agglomeration refers to very distinct real-world situations. At one extreme lies the core-periphery structure corresponding to North-South dualism. For example, Hall and Jones (1999) observed that high-income nations are clustered in small industrial cores in the Northern Hemisphere and that productivity per capita steadily declines with distance from these cores.

    As noted by many historians and development theorists, economic growth tends to be localized. This is especially well illustrated by the rapid growth of East Asia during the last few decades. We view East Asia here as comprising Japan and nine other countries, that is, Republic of South Korea, Taiwan, Hong Kong, Singapore, Philippines, Thailand, Malaysia, Indonesia, and China.

  • Canada - Measures Affecting the Importation of Milk and the Exportation of Dairy Products (WT/DS103): Report of the Panel

  • Edited by World Trade Organization
  • Book:
    Dispute Settlement Reports 1999
    Published online:
    22 December 2017
    Print publication:
    11 April 2002, pp 2097-2344

  • Summary

    INTRODUCTION

    This proceeding has been initiated by two complaining parties, the United States and New Zealand.

    In a communication dated 8 October 1997 (WT/DS103/1), the United States requested consultations with Canada in accordance with Article 4 of the Under- standing on Rules and Procedures Governing the Settlement of Disputes (“DSU”), pursuant to Article XXII:1 of the General Agreement on Tariffs and Trade 1994 (“GATT 1994”), Article 19 of the Agreement on Agriculture, Article 30 of the Agreement on Subsidies and Countervailing Duties (“the SCM Agreement”) and Article 6 of the Agreement on Import Licensing Procedures with respect to export subsidies of Canada on dairy products and the administration by Canada of its tariff- rate quota for fluid milk and cream. The United States and Canada held consultations in Geneva on 19 November 1997 but these consultations did not result in a resolution of the dispute.

    On 29 December 1997 New Zealand requested consultations with Canada pursuant to Article 4 of the DSU, under Article 19 of the Agreement on Agriculture and Article XXII:1 of the GATT 1994 with regard to Canada's Special Milk Classes Scheme. New Zealand and Canada held consultations on 28 January 1998 but these consultations did not result in a resolution of the dispute.

    On 2 February 1998, the United States (WT/DS103/4) and on 12 March 1998, New Zealand (WT/DS113/4), each requested the establishment of a panel with standard terms of reference.

    In its request, the United States claims that:

  • (a) “The Government of Canada is providing subsidies, and in particular export subsidies, on dairy products through its national and provincial pricing arrangements for milk and other dairy products without regard to the export subsidy reduction and other WTO commitments under- taken by Canada. Specifically, the Government of Canada established and maintains a system of special milk classes through which it maintains high domestic prices, promotes import substitution, and provides export subsidies for dairy products going into world markets. These practices distort markets for dairy products and adversely affect US sales of dairy products.”

  • (b) “In addition, although Canada committed under the Marrakesh Agreement Establishing the World Trade Organization to permit access to an in-quota quantity of 64,500 tonnes (product weight basis) under a tariff-rate quota for imports of fluid milk and cream, Canada has refused to permit commercial import shipments within the quota.

  • Canada - Measures Affecting the Importation of Milk and the Exportation of Dairy Products (WT/DS103) Report of the Appellate Body

  • Edited by World Trade Organization
  • Book:
    Dispute Settlement Reports 1999
    Published online:
    22 December 2017
    Print publication:
    11 April 2002, pp 2057-2094

  • Summary

    INTRODUCTION

    Canada appeals from certain issues of law and legal interpretations developed by the Panel in Canada - Measures Affecting the Importation of Milk and the Exportation of Dairy Products (the “Panel Report”) Following their requests for consultations, the United States and New Zealand requested that the Dispute Settlement Body (the “DSB”) establish panels to examine certain alleged export subsidies that they contended Canada or its provinces had granted, through the Special Milk Classes Scheme, to support the export of dairy products and to examine a claim by the United States regarding imports into Canada of fluid milk and cream within the 64,500 tonnes tariff-rate quota committed in Canada's Schedule of Commitments under the Marrakesh Agreement Establishing the World Trade Organization (the “WTO Agreement”). On 25 March 1998, the DSB agreed to establish two panels in accordance with these requests and further agreed that the two panels would be consolidated into a single panel pur- suant to Article 9.1 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”) with standard terms of reference.

    The Panel considered claims made by the United States and New Zealand that Canada's measures are inconsistent with Articles II, X, XI and XIII of the General Agreement on Tariffs and Trade 1994 (the “GATT 1994”); Articles 3, 4, 8, 9, and 10 of the Agreement on Agriculture; Article 3 of the Agreement on Subsidies and Countervailing Measures (the “SCM Agreement”); and Articles 1, 2 and 3 of the Agreement on Import Licensing Procedures. The Panel Report was circulated to Members of the World Trade Organization (the “WTO”) on 17 May 1999. In paragraph 8.1 of its Report, the Panel concluded that Canada:

  • (a) through Special Milk Classes 5(d) and (e) - and this for all of the dairy products in dispute (butter, cheese and “other milk products”) and for both marketing years at issue (1995/1996 and 1996/1997) - has acted inconsistently with its obligations under Article 3.3 and Article 8 of the Agreement on Agriculture by providing export subsidies as listed in Article 9.1(a) and Article 9.1(c) of that Agreement in excess of the quantity commitment levels specified in Canada's Schedule; and

  • Turkey - Restrictions on Imports of Textile and Clothing Products (WT/DS34): Report of the Panel

  • Edited by World Trade Organization
  • Book:
    Dispute Settlement Reports 1999
    Published online:
    22 December 2017
    Print publication:
    11 April 2002, pp 2363-2556

  • Summary

    INTRODUCTION

    On 21 March 1996, India requested consultations with Turkey pursuant to Article 4.4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”) and Article XXIII:1 of the General Agreement on Tariffs and Trade 1994 (“GATT”) regarding the unilateral imposition of quantitative restrictions (“QRs”) by Turkey on imports of a broad range of textile and clothing products from India as from 1 January 1996 (WT/DS34/1).

    India and Turkey did not enter into consultations, due to disagreement on the appropriateness of participation of the European Communities in such consultations, and consequently the dispute could not be resolved at that stage. The Dispute Settlement Body (“DSB”) was informed accordingly on 24 April 1996.

    In a communication dated 2 February 1998, India requested the DSB to establish a panel to examine the matter in the light of GATT and the Agreement on Textiles and Clothing (“ATC”), in accordance with Article 6.2 of the DSU (WT/DS34/2). In its communication, India claimed that the restrictions imposed by Turkey were inconsistent with Turkey's obligations under Articles XI and XIII of GATT and were not justified by Article XXIV of GATT, which did not authorize the imposition of discriminatory QRs, and that the restrictions were inconsistent with Turkey's obligations under Article 2 of the ATC. India also claimed that the restrictions appeared to nullify or impair benefits accruing to it directly or indirectly under GATT and the ATC.

    On 13 March 1998, the DSB established a panel pursuant to the request of India, with the following standard terms of reference (Article 7.1 of the DSU):

    “To examine, in the light of the relevant provisions of the covered agreements cited by India in document WT/DS34/2, the matter referred to the DSB by India in that document and to make such findings as will assist the DSB in making recommendations or in giving the rulings provided for in those agreements.”

    On 11 June 1998, the parties to the dispute agreed on the following composition of the Panel (WT/DS34/3):

    Chairman: Ambassador Wade Armstrong

    Members: Dr. Luzius Wasescha

    Prof. Robert Hudec

Dispute Settlement Reports 1999
  • Volume 5, Pages 1797-2094
  • Edited by World Trade Organization
  • Published online:
    22 December 2017
    Print publication:
    11 April 2002
  • The Dispute Settlement Reports of the World Trade Organization (WTO) include Panel and Appellate Body reports, as well as arbitration awards, in disputes concerning the rights and obligations of WTO members under the provisions of the Marrakesh Agreement. These are the WTO authorized and paginated reports in English. An essential addition to the library of all practising and academic trade lawyers, and needed by students worldwide taking courses in international economic or trade law. DSR 1999: V reports on quantitative restrictions on imports of agricultural, textile and industrial products (India) and measures affecting the importation of milk and the exportation of dairy products (Canada).

  • Turkey - Restrictions on Imports of Textile and Clothing Products (WT/DS34): Report of the Appellate Body

  • Edited by World Trade Organization
  • Book:
    Dispute Settlement Reports 1999
    Published online:
    22 December 2017
    Print publication:
    11 April 2002, pp 2345-2362

  • Summary

    INTRODUCTION

    Turkey appeals from certain issues of law and legal interpretations in the Panel Report, Turkey - Restrictions on Imports of Textile and Clothing Products (the “Panel Report”). The Panel was established to consider a complaint by India regarding quantitative restrictions introduced by Turkey on imports of Indian textile and clothing products.

    On 6 March 1995, the Turkey-EC Association Council adopted Decision 1/95, which sets out the rules for implementing the final phase of the customs union between Turkey and the European Communities. Article 12(2) of this Decision states:

    In conformity with the requirements of Article XXIV of the GATT Turkey will apply as from the entry into force of this Decision, substantially the same commercial policy as the Community in the textile sector including the agreements or arrangements on trade in textile and clothing.

    In order to apply what it considered to be “substantially the same commercial policy” as the European Communities on trade in textiles and clothing, Turkey introduced, as of 1 January 1996, quantitative restrictions on imports from India on 19 categories of textile and clothing products.

    The Panel considered claims by India that the quantitative restrictions introduced by Turkey were inconsistent with Articles XI and XIII of the GATT 1994, and Article 2.4 of the Agreement on Textiles and Clothing (the “ATC”). In the Panel Re-port, circulated on 31 May 1999, the Panel reached the conclusion that the quantitative restrictions were inconsistent with the provisions of Articles XI and XIII of the GATT 1994 and consequently with those of Article 2.4 of the ATC, and rejected Turkey's defence that the introduction of any such otherwise GATT/WTO incompatible import restrictions is permitted by Article XXIV of the GATT 1994.

    On 26 July 1999, Turkey notified the Dispute Settlement Body (the “DSB”) of its intention to appeal certain issues of law covered in the Panel Report and legal interpretations developed by the Panel, pursuant to Article 16.4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”), and filed a Notice of Appeal pursuant to Rule 20 of the Working Procedures for Appellate Review (the “Working Procedures”). On 5 August 1999, Turkey filed its appellant's submission. On 20 August 1999, India filed an appellee's submission.

Page 436 of 579