The schedule MD represents Home import demand curve; MS(FT) represents the import supply curve with free trade; XS(row) and XS(p) are the export supply ...
European Integration 2 Final exam, April 2013 Eleni Iliopulos Answer carefully to ALL the following questions/exercises. Do not write more than the required number of words. Explanations accompanying graphs are mandatory: graphs without explanations won’t be accepted.
Short questions (max 100 words each) - 3 points 1. What are the "automatic stabilisers? Explain. 2. What is the "Stability Growth Pact" (SGP)? Discuss its main elements. 3. What are the main (and general) di¤erences between the 2004 "European Consitution" and the "Treaty of Lisbon", eventually rati…ed by all countries?
Questions (max 200 words each) –5 points 1. The EU structure: pre and post Lisbon (a) Discuss the 3-pillar structure of the Maastricht Treaty. (b) Discuss how the 3-pillar structure has been modi…ed by the Treaty of Lisbon. 2. The public debt crisis in Europe: (a) Explain how the …nancial crisis has evolved into the sovereing debt crisis in Europe. (b) Short term and long term policy responses to the crisis. Explain.
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Exercise 1: the MS/MD diagram - 6 points Consider the MS/MD framework studied in class. Consider the particular situation represented in the graph, where country Home imports from both countries RoW and Partner. The schedule MD represents Home import demand curve; MS(FT) represents the import supply curve with free trade; XS(row) and XS(p) are the export supply curve for country RoW and Partner, respectively; MS (MFN) is the MS curve when exporters are subject to a MFN tari¤, T; MS(PTA) is the MS curve when Home has a PTA agreement with country Partner only.
Describe the di¤erent con…gurations represented in the graph. More in particular: 1. Focus on the free trade equilibrium: (a) Explain how the MS(FT) curve is derived. (b) Draw a graph reproducing the free trade situation. Do not forget to include the quilibrium border price for country RoW and Partner, the domestic equilibrium price for H and equilibrium imported and exported quantities. Explain. 2. Focus on the MFN equilibrium: (a) Explain how the MS(MFN) curve is derived. (b) Draw a separate graph reproducing the MFN situation. Do not forget to include the quilibrium border price for country RoW and Partner, the domestic equilibrium price for H and equilibrium imported or exported quantities for each country. Explain. 3. Focus on the PTA equilibrium: (a) Explain how the MS(PTA) curve is derived and the implications for the equilibrium in the case represented in the graph. (b) Draw a separate graph reproducing the PTA situation. Do not forget to include the quilibrium border price for country RoW and Partner, the domestic equilibrium price for H and equilibrium imported or exported quantities for each country. Explain. (c) Based on your graph, discuss the switching e¤ect and the trade creation e¤ect. 2
Exercise 2: collusion in the BE-COMP diagram – 6 points Consider now the BE-COMP framework studied in class for the case of perfect collusion. Answer to the following questions. 1. Construct the full BE-COMP benchmark framework. Draw the COMP curve and the BE curve in the usual diagram (number of …rms on the x-axis and mark-up on the y-axis) . Include the graph with home demand. Assume that …rms produce with a constant marginal cost (MC) and a …xed cost of production (F). Draw the marginal cost curve (MC) and the average cost curve (AC) in a diagram (sales per …rm on the horizontal-axis and euros on the vertical-axis). Derive the equilibrium E in the Graph. Indicate the mark-up , the equilibrium price p, equilibrium number of …rms n, consumption C and sales of an individual …rm x. 2. Use the graph to analyze the impact of the introduction of a "no-trade-to-free-trade" integration with a Parner that is identical to Home: (a) Explain carefully the dynamics towards the new equilibrium on each graph. Call the new equilibrium variables: E1 ; 1 ; p1 ; C1 ; x1 : (b) What are (if any) the di¤erences from the short and the long term equilibrium following the integration? 3. Analyze the welfare e¤ects of "no-trade-to-free-trade" integration: compare the preintegration with the post integration situation.
firms n, consumption C and sales of an individual firm x. Moreover: ... (a) Suppose now that country H trades with two large countries, F and G, where. F is more ...
i) Varian, Microeconomic Analysis, W. W. Norton. ii) Wickens (2008), Macroeconomic Theory: a general equilibrium approach, Princeton. University Press.
Nov 10, 2014 - By calculating European immigrants' share of the cost of government spending and their contribution to government revenues, the scholars ...
3. Introducing an MFN tariff into the framework. 4. Different types of trade barriers. E. ILIOPULOS (PSE, University of Paris 1). Microeconomics. Lecture 3. 2 / 26 ...
This course aims at providing an introduction to the standard literature on international trade and on the related policy issues. It analyzes the empirical and ...
Common agricultural policy. Eleni ILIOPULOS. PSE, University of Paris 1. Lecture 6. E. ILIOPULOS (PSE, University of Paris 1). CAP. Lecture 6. 1 / 26 ...
Can you show graphically that a small country (no impact of its demand on the world price) always has welfare losses from imposing a tariff? II. 4. Equivalence of ...
also last one or several periods. Models introduce a positive shock today and zero shocks thereafter. (with certainty). The solution does not require linearization, ...
The standard model stochastic setting complete markets: state contingent Arrow'Debreu assets. capital and adjustment costs productivity shocks. E. ILIOPULOS ...
2. State the Rybsczinsky theorem and represent it graphically on a graph with (L,K) ... French people are in favor of free trade with Germany but not with China.
Understand how we can extend the Heckscher$Ohlin model. ... The model: basic assumptions .... Transportation costs do not allow to equalize good prices.
transmission of shocks, the effects of monetary policy when banks are ... A monetary restriction reduces leverage, ... policy can only partly offset this effect. The.
basis for international trade statistics and trade negotiations. (basis to ... OECD: activities recorded depending on the technological intensity. E. ILIOPULOS ...
%2. . However, as firms increase the quantity produced, the marginal costs of production ... Suppose small country H has a comparative advantage in producing.
The Ricardian model: assumptions on PPF. 1 ... Given all assumptions, PPF is linear: from (1),* #. C$. +$,4 ..... Transportation costs: for each unity of good X,.
This course is taught in English and consists of 12 classes of 1.5 hours each. The final grade is based on a written exam. The participation to the class ... Papers, Board of Governors of the Federal Reserve System. Choi, H. , N.H. Mark and D.
analyze simple static models characterized by 3 goods: labor, money and ... of nominal rigidities and set an open economy general equilibrium framework.
house mortgages in the US to risky people: subprime mortgages, which relied on ever increasing house prices. And these loans were sold to banks, which sold ...
ditions on credit markets affect the dynamics of labor markets and can improve ... and firms' stochastic discount factors along the business cycle. ..... and land investments) as well as the costs associated to the working capital within the period.
The financial crisis and the criticism addressed to modern macroeconomics. Here you find in the following a list of mandatory reading concerning the debate on ...
