Several papers have recently underlined the relationship between institutional quality and international trade. Institutions are in charge of the enforcement of contracts: good institutions are those which punish the part that breaks the contract, and implement this activity with a high probability of success. Goods can be more or less complex, according to the number of intermediate inputs nee...

In the face of anti-globalization trend and shrinking global value chain, ensuring safety layout industrial chain sustainability each country’s internal intermediate product production cycle has become an important new development strategy for all countries. The external cycles systems is closely related to chains. Based on world input-output model, we define trade pattern goods in various coun...

This paper demonstrates that intermediate goods should not be taxed even in the presence of dividend payments to households, thus clarifying previous results. We also …nd that optimal government policy in a second best world may include stockpiles of output — private supply exceeds private demand, and the government purchases the surplus. This may provide a possible explanation for some agricul...

Over the past several years, two points made by authors in Classroom Expernomics have changed the way I teach my Intermediate Microeconomic Theory students about the free-rider paradox. First, Hoaas and Drouillard [1994, p. 6] warned that participation in a public goods experiment was not sufficient to understand the paradox, and advised "postexperiment explanation." Second, Stodder [1994, pp. ...

Global value chains (GVCs) have led to a growing interconnectedness between economies through the segmentation of the production processes and specialisation of countries into tasks activities within those value chains. Today, more than 70% of global trade is made of intermediate goods and services. This evolution of the production process is the result of technological progress, cheaper transp...

We show that offshore outsourcing can occur even when there are no economies of scale or cost advantages for the foreign firms. What drives the phenomenon is that domestic firms, by accepting orders for intermediate goods, incur the disadvantage of becoming Stackelberg followers in the ensuing competition to sell the final good. Thus they have incentive to quote high provider prices to ward off...

We set up an endogenous growth model with physical capital, human capital and blueprints for intermediate goods. The model can generate steady-state growth or stagnation. Along the adjustment path for a developing economy we can distinguish di!erent stages of development. The "rst stage is characterized by physical factor accumulation. At the second stage the economy follows a growth path which...

In an Enterprise network, several companies interact to produce families of goods. Each member company seeks to optimize his own production and inventory policy to maximize his profit. These objectives are generally antagonistic and can lead to contradictory choices in the context of a network with a high degree of local decisional autonomy. To avoid a global loss of economic efficiency, the ne...