Yomogida Morihiro

We examine the welfare consequences of an emission tax with and without a border tax adjustment (BTA) for an imperfectly competitive industry, where intra-industry trade arises between countries. BTA allows a government to impose a pollution-content tariff on imports and refund an emission tax for export sales. We analyse the structure of an optimal emission tax with BTA when a government chooses its emission tax rate to maximize its national welfare. We show that the optimal emission tax policy with BTA achieves greater national welfare and higher environmental quality than the optimal policy without BTA.

We develop a two-country (North and South), two-good, general equilibrium model of international trade in goods and explore the effects of domestic and international emission trading under free trade in goods. Whereas domestic emission trading in the North may result in carbon leakage by expanding the South's production of the emission-intensive good, international emission trading may induce the North to expand the production of the emission-intensive good by importing emission permits. Emission trading may deteriorate the global environment. The North's (South's) emission trading may not benefit the South (North). International emission trading improves global efficiency but may not benefit both countries.

We examine the welfare effect of fragmentation with a general-equilibrium model of monopolistic competition. Using the efficiency property of monopolistic competition models, we develop a diagram that is used to show that fragmentation of production arises, i.e. firms in a country specialize in developing blueprints and out-source the manufacturing of their products to the other country. Such fragmentation allows countries to benefit from trade due to two different sources: comparative advantage and product diversity. We show how these two sources result in gains from trade induced by this production fragmentation.

This article develops a general equilibrium model with a vertical production structure to examine the relationship between offshore outsourcing and international migration, especially emphasizing their effects on the wages of skilled and unskilled workers. Two-way outsourcing (simultaneous insourcing and outsourcing) in skilled-labor-intensive services arises because of product differentiation and scale economies, and outsourcing in unskilled-labor-intensive processing occurs because of factor endowment differences. The tractability of the model allows us to rank outsourcing and migration, according to the wages of both types of workers. Finally, we also analyze under what conditions outsourcing and international migration are complements or substitutes.

In this chapter, I explore the impacts of international capital movements on income distribution within countries and the value of trade in goods. Jones (1980) introduces sector-specific capital into a simple Ricardian setting and examines the role of comparative and absolute advantage in determining the allocation of capital between countries. I introduce a simple structure of the demand for commodities into Jones (1980) so that commodity prices are determined endogenously in commodity markets. This extension allows us to show how the pattern of demand plays a crucial role in the effects of capital movements on income distribution and goods trade.

In this paper, I examine the role of oligopolistic competition in international trade when countries have different technologies. I look at a Situation in which countries have the same demand structure with constant elasticity, markets are segmented between countries, and transport costs are required for trade. In oligopoly, each county can have the critical level of competition. With those critical levels, I show when two-way trade is promoted or vanishes in the cases of small or large technology gaps. I also investigate a possibility that antitrust policy can backfire in an open economy. (c) 2006 Elsevier Inc. All rights reserved.

In this paper, we explore the effect of fragmentation of production processes on social welfare in the imperfectly competitive market. We consider a situation in which firms located in a country strategically decide whether they produce at home or move their production overseas. We show that, in such a situation, there exists a Nash equilibrium in which all of the firms move production overseas although domestic production is socially desirable. This implies that "reverse imports" do not necessarily benefit the country. We also discuss the effectiveness of a subsidy for domestic production in improving the social welfare of the country.

This paper explores the nature of vertical intra-industry trade: the exchange of an intermediate good and a final good that requires the intermediate good in the same industry. A factor endowment model is extended to a setting with a technological difference in the production of the intermediate good between countries. Unlike the result of the existing work, the share of intra-industry trade does not reach a peak when countries have identical factor endowment ratios. This paper shows that a difference in factor intensities between intra-industry goods plays a crucial role in deriving this result.