Impact of Exports on the Exporter’s Domestic Market

This paper developed a theoretical model of partial equilibrium of the export-oriented market for a short-term period, as well as outlined the main approaches to modeling equilibrium in a long-term period. Thus, the competition between the producers of the selected exporting country and its global competitor in the external import-dependent market is considered. In the partial equilibrium model, for the first time, the domestic and foreign sales markets are presented together. The analysis of the theoretical model made it possible to obtain the following results for the short-term period: in a state close to equilibrium, external supplies of the exporting country are positively related to their own production volumes and negatively – ​with the production volumes of the global exporter; the price of the domestic market of the exporting country is negatively related to the volume of its own production and the volume of production of the global exporter. The paper analyzes three scenarios that allow checking the adequacy of the partial equilibrium model for different conditions of its application. The first scenario considers a negative supply shock associated with a drop in production in a global exporter. The second analyzes the impact of the pandemic on the global exporter and exporting country. The third scenario is devoted to assessing the impact of a demand shock on a designated exporting country. The scenarios confirmed the adequacy of the model. The approach to modeling an export-oriented market for a long-term period is based on the assumption that the exporter's price will converge with the price of the domestic market over time and, ultimately, will differ from it only by the amount of additional costs associated with the export of a unit of production. It was established that, while maintaining exogenous conditions for positive long-term export dynamics, the price of the domestic market of the exporting country will decrease in case of an increase in the incremental values of exports and production volumes of the global exporter. The consequences of the positive dynamics of exports for the domestic demand of the exporting country are considered. The established relationships between exports and sales in the exporter's domestic market were empirically confirmed by the example of the Russian sunflower oil market.

Public Provision of Goods and Services under Cost Uncertainty: The Government’s Bureaucratic Organization

The digital transition is a challenge that developed countries are currently facing. The transition process is associated with different degrees of uncertainty, which are particularly relevant for changes that have to do with the provision of goods and services produced by public administrations. Our paper uses a partial equilibrium model to study the effects of uncertainty on the public provision of goods and services produced by bureaucratic agencies, including the incentive of the government to consolidate production. We assume that bureaucratic agencies may play either a cooperative game with each other and a non-cooperative game against the government (i.e., a consolidated bureaucracy) or a non-cooperative game with each other and against the government (i.e., competing bureaus). Both the government and the bureaus face tradeoffs between maximizing the electorate preferences and extracting some political and/or bureaucratic rents. We find that a cooperative (competitive) bureaucratic solution depends on the nature of the goods produced. We find that costs’ uncertainty affects the level of public production and the way the policymakers extract their rents.

Global Liquified Natural Gas Trade under Energy Transition

With the recent rising attention and debates on the role of natural gas, especially liquid natural gas, in energy transition, it is critical to have a consistent approach in assessing uncertainties and dynamics in the global gas market during the next two to three decades. There are two objectives of this paper. The first one is to estimate and discuss the impacts of the global liquified natural gas (LNG) trade under a low-carbon scenario using a partial equilibrium model. The second objective is to discuss the role of a structural economic model in empirical analysis and strategy design under a regime shift, such as an energy transition, for the global natural gas market.

Modelling the Impact of Energy Subsidies Reform in the Republic of Moldova

This article presents the methodology and results of modelling for the analysis on energy affordability and assessing the impact of a possible value added tax increase on the affordability of households to consume adequate levels of natural gas, electricity and heat. The analysis of the reform impact of the subsidy schemes is based on a partial equilibrium model which measures the impact of reforms on energy affordability of different householder groups and budgetary revenue and expenditure, but also on greenhouse gas emissions. Using of targeted social policies generates a budget surplus that can be allocated to energy

Market power and urban housing development

This paper investigates the relationship between market power and urban housing development in a two-period, partial equilibrium model of a durable rental housing market with a fixed stock of homogeneous land, a convex housing construction technology, and no externalities. We contrast the planning solution and the monopoly solution. Since we employ social surplus analysis, the competitive equilibrium coincides with the planning solution. Thus, we contrast the competitive equilibrium and the monopoly solution. On a priori grounds, one expects less housing to be produced under monopoly than under competition. The monopolist can produce less housing by constructing housing at lower density, holding land off the market, or developing his land later. We show that the monopolist: (i) will never hold land off the market for both periods, (ii) may develop either a higher or lower proportion of her land in the first period than under competition, and (iii) in both periods will construct at lower density than under competition.

Extreme Events, Entrepreneurial Start-Ups, and Innovation: Theoretical Conjectures

In light of the COVID-19 pandemic, we scrutinize what has been established in the literature on whether entrepreneurship can cause and resolve extreme events, the immediate and long-run impacts of extreme events on entrepreneurship, and whether extreme events can positively impact (some) entrepreneurship and innovation. Based on this, we utilize a partial equilibrium model to provide several conjectures on the impact of COVID-19 on entrepreneurship, and to derive policy recommendations for recovery. We illustrate that while entrepreneurship recovery will benefit from measures such as direct subsidies for start-ups, firms’ revenue losses, and loan liabilities, it will also benefit from aggregate demand-side support and income redistribution measures, as well as from measures that facilitate the innovation-response to the Keynesian supply-shock caused by the pandemic, such as access to online retail and well-functioning global transportation and logistics.

COVID-19 and Policy Impacts on the Bangladeshi Rice Market and Food Security

This research employs a partial equilibrium model to estimate the short- and long-run effects of COVID-19 and rice policies on Bangladesh’s rice market and food security. We also analyze the impact of relevant policies in terms of their effectiveness in mitigating stresses stemming from a hypothetical pandemic with a COVID-19-like impact. The results indicate that the effect of COVID-19 on Bangladeshi food security during FY 2019/20 was mixed, as the indicators of food availability improved by 5%, and decreased by 17% for food stability, relative to what they would have been otherwise. Policy simulation results indicate that a higher import tariff improves self-sufficiency status, but undermines rice availability and accessibility by bending the market toward a restrictive trade regime. Results also indicate that unlike stock enhancement policy, closing the existing yield gap improves rice availability, accessibility, and moderates the depressing effect of a future event with repercussions similar to COVID-19, although the yield policy appears more speculative and could be too costly. The insights generated contribute to the understanding of policies that aim to achieve sustainable development goals related to aggregate food security, and build resilience against future shocks akin to COVID-19.

Food Trade Openness and Enhancement of Food Security—Partial Equilibrium Model Simulations for Selected Countries

This research measured the welfare impacts of food trade liberalization in India, Egypt, Pakistan, Saudi Arabia, and the United Arab Emirates (UAE) using the partial equilibrium model—World Integrated Trade Solution (WITS). Macroeconomic settings, domestic policy objectives, and food security indicator data are used to assess the implications of the simulations on food availability and stability. Simulation results for India, Egypt, and Pakistan indicate annual welfare gains (consumer surplus) of 2571, 340, and 25 million USD, respectively, while Saudi Arabia and the UAE have gains of 14 and 17 million USD. Results show that tariff elimination would have wide-ranging welfare impacts across food commodities within these countries. Moreover, reductions for specific commodities directly relevant to food energy and protein availability would have a greater direct impact on the poor. Lowering the highest tariffs on those commodities might raise the real incomes of more than 350 million persons by 7.5% or more and could create shifts in consumption towards more diversified and nutritionally sound diets.

Measuring the Value of Softwood Log Exports: Evidence from Oregon

Oregon softwood log exports experienced a resurgence during years after the Great Recession. Using an empirically grounded partial equilibrium model, the purpose of this study is to assess the net effects of log exports on total economic surplus by measuring the effects of a hypothetical absence of export markets from 2010:Q1 to 2015:Q4. Based on our modeling results, the net economic losses would have amounted to $248 million during the study period in total. Oregon mills would have gained $1.66 billion in total, whereas landowners would have lost $1.91 billion in total had there not been export markets. Furthermore, additional losses would have occurred from the forgone export premium. Our modeling results suggest that harvests would have been 1.97 billion board feet lower in the absence of export markets. However, Oregon mills would have used an additional 3.0 billion board feet. We also provide estimates for potential employment effects. Study Implications The purpose of our study is to compute how much Oregon mills would have gained from the absence of export competition during the six years after the Great Recession and how much landowners would have lost if they did not have the opportunity to export softwood logs. We also assess how many additional jobs domestic mills would have sustained and how many jobs would have disappeared from logging and transportation activities if exports were absent. Our results inform policymakers and stakeholders about the net benefits of softwood log exports in Oregon, as well as about the distributional consequences of exports.