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This paper is a preliminary attempt to analyze information as a factor of production in international trade. It is a first attempt to get a handle on the direction and balance of information flows. We have obtained quantitative data about Web-related data flows between countries, and we explore how those flows are correlated to trade in goods . Using Telegeography data on “Server Location as a Percentage of Top Websites,” we found that 2/3 of all web traffic is transnational. More than half of the top 100 web sites in 9 of the world’s 13 sub-regions are hosted in the United States. Central Asia and Eastern Europe, for whom 37% and 41% of their most popular websites, respectively, are requested from the US. Even well-developed Western Europe makes almost half of its top 100 web site requests to US-based sites. For US users, on the other hand, only about 26 of the top 100 websites are hosted outside the country, and 20 of them are in Europe.Ironically, East Asia, which has a huge goods trade surplus with the developed economies, particularly with the US, has the largest negative balance in the relationship between incoming and outgoing Web requests. Indeed, we found a very strong negative correlation (-0.878) between web traffic balances and the balance of trade in goods across all subregions. Once these aspects of transnational data flows are quantified, the paper discusses the implications of these findings for policy, especially trade policy. It raises the question whether the goal of a free and open digital economy is best advanced by placing information exchanges in the trade paradigm and pushing for free trade, or by asserting a more general human right to free and open information exchanges across borders, which has social and political as well as economic consequences. These two approaches are not mutually exclusive, of course, but by making these distinctions we clarify the debate over international policy in the digital world.

German Abstract: Die soziale "Hangematte" -, wer hat nicht bereits solche Argumente gehort? Obwohl die ILO in ihrem jungsten "ILO-Weltsozialschutzbericht 2014/2015" deutlich darauf hingewiesen hat, dass der Sozialschutz eine wichtige Rolle bei der Verwirklichung des Menschenrechts auf soziale Sicherheit fur alle spielt, fur die Verringerung der Armut und Ungleichheit, und dass er integratives Wachstum unterstutzt, gibt es eine nicht enden wollende Diskussion um angeblich zu groszugige Sozialschutzausgaben, insbesondere in Europa. Die deutsche Bundeskanzlerin Angela Merkel hat vor kurzem diese Argumente geausert, indem sie behauptete, dass die Europaische Union einen Anteil von nur sieben Prozent der Weltbevolkerung habe, aber zur gleichen Zeit mehr als 40 Prozent der weltweiten Sozialausgaben ausgebe. Solche Perspektiven ubersehen die Erfolgsgeschichte der kleinen, weltmarktorientierten Sozialstaaten, die eine Kombination von Sozialpartnerschaft, umfassenden Gewerkschaften und Lohnzuruckhaltung mit einem engen sozialen Netz nach 1945 bedeuteten. 16 der 20 weltweit fuhrenden Lander nach dem Weltbank Regulatory Quality Index entsprechen diesem Modell. Basierend auf der veroffentlichten Literatur uber die Effizienz und Effektivitat der Sozialausgaben entwickeln wir eine klare empirische Methode, basierend auf der Analyse von Daten der ILO, von Eurostat und der OECD, die die Berechnung der Regressionsresiduen aus der Armut vor und nach Sozialtransfers als Mas fur die Effizienz der Verringerung der Armut interpretiert, und die Berechnung der Regressions-Residuen aus Sozialschutzausgaben und diesem neu abgeleiteten Mas fur die Effizienz der Armutsbekampfung als neues, endgultiges Mas fur die Effizienz der Sozialschutzausgaben in der Armutsbekampfung. Die empirischen Ergebnisse unserer Bemuhungen kann man/frau dann in den folgenden sechs Hauptthesen zusammenfassen: 1) Unsere Re-Analyse der Angela Merkel-Hypothese auf der Grundlage von 169 Landern, fur die wir die letzten ILO Sozialschutz-Daten und Weltbank uber das GNI nach Kaufkraft verwendeten, zeigt, dass die 27 EU-Lander mit vollstandigen Daten nur 33% der globalen Weltsozialschutzausgaben ausgeben, wahrend die 13 nicht-EU-OECD-Mitglieder, darunter die grosen anderen westlichen Demokratien, 40% der weltweiten Sozialschutzausgaben ausgeben, die BRICS 18% und der Rest der Welt 9%. Ein Thema fur die Reflexion auf der Tagesordnung von Bundeskanzlerin Merkel konnte somit der relativ erfolgreiche Sozial-Keynesianismus der angelsachsischen Demokratien in Ubersee sein, die im krassem Gegensatz zur Sparpolitik im Rahmen des europaischen "Fiskalpakt" stehen. 2) In diesem Artikel werden wir auch einige empirische Bestatigungen fur die ILO-Thesen finden, nach denen die soziale Sicherheit eine wichtige Rolle bei der Verwirklichung des Menschenrechts auf soziale Sicherheit fur alle spielt, fur die Verringerung von Armut und Ungleichheit und zur Forderung eines breitenwirksamen Wachstums. Er verbessert Humankapital und Produktivitat, unterstutzt die Binnennachfrage und erleichtert den Strukturwandel in den Volkswirtschaften. 3) Unsere Ergebnisse zeigen, dass die folgenden Mitglieder der EU zurzeit (2012) die effizienteste Nutzung der Sozialschutzausgaben in der Armutsbekampfung hatten: Tschechische Republik; Irland; Ungarn; Niederlande; Slowakei; Slowenien; Luxemburg; Finnland; Danemark; und Malta. Dies repliziert die in fruheren Studien des Verfassers beschriebene Rangliste und insbesondere betont die Untersuchung erneut, dass die Tschechische Republik ein sehr effizientes Sozialmodells hat. Der "kranke Mann am Bosporus" der Sozialpolitik in Europa war dagegen Griechenland; Italien; Spanien; Bulgarien; Portugal; Kroatien; Deutschland; Lettland; Polen; und Frankreich, auch teilweise in Replikation der Ergebnisse aus fruheren Studien. 4) Ausreichende Datenwahrend der Zeitspanne von 2005 bis 2013 in der Zeitreihe stehen nun zur Verfugung um zuverlassige Ergebnisse uber jene Lander zu erzielen, die die Effizienz in diesem Zeitraum verbesserten. Die Superstars der Verbesserung der Effizienz des Sozialschutzes in der Armutsbekampfung uber die Zeit waren Osterreich; Litauen; und die Niederlande. 5) Unsere makro-quantitativen Vergleiche zeigen, dass ein effizienter Sozialschutz in der Tat ein wichtiger Garant fur eine zufrieden stellende Gesamtentwicklung in den Bereichen Geschlecht, Bildung, EU-2020 Performance, Demokratie, gesellschaftliche Toleranz, Lebenszufriedenheit, Happy Life Jahre, Stabilitat der Demokratie, und Verringerung der Differenz zwischen den armsten und den reichsten Schichten darstellt. 6) Unsere Ergebnisse zeigen eine grose Ubereinstimmung zwischen den Ergebnissen, basierend auf Daten von Eurostat, und denen der OECD.English Abstract: The "welfare hammock" - who didn't hear already such arguments? Although the ILO in its recent "ILO World Social Protection Report 2014/2015" has clearly pointed out that social protection plays an important role in the realization of the human right to social security for all, for the reduction of poverty and inequality and that it supports inclusive growth, there is a never-ending debate about supposedly too generous social protection expenditures, especially in Europe. The German chancellor, Angela Merkel, has recently taken up these arguments, by claiming that the European Union accounts for only seven percent of the world population, but at the same time it consumes more than 40 percent of global social spending. Such perspectives overlook the analysis of the success story of the small, world-market oriented welfare states, combining social partnership, fairly encompassing trade unions and wage restraint with a fairly tight social net after 1945. 16 of the 20 global leading countries according to the World Bank Regulatory Quality Index correspond to this model. Based on the published literature on the efficiency and effectiveness of social spending, we develop a clear empirical method based on the analysis of data from ILO, Eurostat and the OECD data, calculating the residuals from poverty before and after social transfers as the measure of the efficiency of poverty reduction, and calculating then the residuals from social protection expenditures and this newly derived measure of the efficiency of poverty reduction as the new final measure of the efficiency of social protection expenditures in poverty reduction.The empirical results of our efforts then can be summarized in the following six main theses:1) Our re-analysis of the Angela Merkel hypothesis based on 169 countries for which we have recent ILO Social Protection data and World Bank GNI PPP data reveals that the 27 EU countries with complete data spend only 33% of global world social protection expenditures, while the 13 non-EU-OECD members, among them the major other Western democracies, spend 40% of global social protection expenditures, the BRICS 18% and the Rest of the World 9% of global social protection expenditures. A theme for reflection on the agenda of Chancellor Merkel thus could be the current relatively successful social Keynesianism of the Anglo-Saxon overseas democracies, which are in stark contrast to the savings agenda in the framework of the European "fiscal pact".2) In this article we will also find some empirical confirmation for the ILO's thesis according to which social security plays an important role in the realization of the human right to social security for all, for reducing poverty and inequality and for the support of inclusive growth. It indeed improves human capital and productivity, supports domestic demand and facilitates structural change in economies.3) Our results show that the following members of the EU currently (2012) had the most efficient use of social protection expenditures in poverty reduction: Czech Republic; Ireland; Hungary; Netherlands; Slovakia; Slovenia; Luxembourg; Finland; Denmark; and Malta. This replicates the ranking described in earlier studies by the present author, and in particular emphasizes again that the Czech Republic has a very efficient social model. The "sick man on the Bosporus" of social policy in Europe by contrast was Greece; Italy; Spain; Bulgaria; Portugal; Croatia; Germany; Latvia; Poland; and France, also partially replicating results from earlier studies.4) Sufficient data are now available in the time series in order to present reliable results on which countries improved their efficiency and which countries did not during the time period from 2005 to 2013. The superstars of improving efficiency of social protection in poverty reduction over time were Austria; Lithuania; and the Netherlands.5) Our macro-quantitative comparisons show that an efficient social protection is indeed an important guarantee for a satisfactory overall development in the areas of gender, education, EU-2020 Performance, democracy, societal tolerance, life satisfaction, Happy Life Years, stability of democracy, and reducing the difference between the poorest and the richest strata. 6) Our results show a large concordance between findings, based on data from Eurostat and from the OECD.

Since their opening up to international capital markets, the economies of Estonia, Latvia and Lithuania have experienced large and persistent capital inflows and trade deficits. This paper investigates whether a calibrated two-sector neoclassical growth model can explain the magnitudes and the timing of the trade flows in the Baltic countries. The model is calibrated for each of the three countries, which we simulate as small closed economies that suddenly open up to international trade and capital flows. The results show that the model can account for the observed magnitudes of the trade deficits in the 1995-2004 period. Introducing a real interest rate risk premium in the model increases its explanatory power. The model indicates that trade balances will turn positive in the Baltic states around 2010. (Copyright: Elsevier)

Spain's 1986 entry into the European Community was followed by a dismantling of restrictions on international capital flows. Initial trade deficits and real exchange rate appreciation were followed by trade surpluses and real exchange rate depreciation. This paper analyzes Spain's financial liberalization using a dynamic general equilibrium model with a traded and nontraded good where a capital poor country opens itself to its capital rich neighbors. A carefully calibrated model has trouble accounting for the large changes in relative prices observed given the small changes in quantities. Variants of the model with frictions in factor mobility between sectors fare better.

This paper investigates convergence for a group of seven countries during the period 1870–1914. A standard empirical growth model which includes physical and human capital accumulation proves unsatisfactory in this setting. An alternative neoclassical open-economy factor accumulation model is proposed, which admits capital and labor migration, and may be extended to include a moving frontier. The model explains the observed convergence pattern in the sample and suggests that factor accumulation patterns were the prime sources of labor productivity convergence from 1870 to 1914.

We introduce international labor mobility in a three-sector general equilibrium model with rural-urban migration. We demonstrate that under some reasonable conditions an inflow of foreign skilled labor (capital) can reduce skilled-unskilled wage inequality.

This paper examines the optimal taxation of factor movements in a three factor model where two factors are potentially mobile. Results emphasize the role of substitutability or complementarity between factors in determining the optimal pattern of factor flows. In particular, a result analogous to the Ramaswami result on the desirability of factor-importing over factor-exporting will hold if factors are complements, but may not hold if they are substitutes. Also, a capitalexporting country that cannot tax imported labor should allow labor imports when capital and labor are substitutes, but may not allow labor imports if they are complements.

Two events in the decade of the 1970s had a major impact on world trade and factor movements: the collapse of the Bretton-Woods fixed-exchange rate system and OPEC’s success in raising petroleum prices. The enormous current account surplus accruing to some of the OPEC members was successfully recycled by the international capital markets to, among others, the oil-importing developing countries. In addition, the vastly increased tempo of investment in the capital-rich labour-poor OPEC members in West Asia attracted migration of labour (skilled as well as unskilled) to these countries from some of the oil-importing developing countries. The remittances from these workers in turn eased the problem of the labourexporting countries in adjusting to the increased cost of oil imports. Thus, both borrowing from private capital markets and export of labour became very important elements in cushioning the oil shock for a number of countries. The post-OPEC movements of labour and financial capital, while dramatic, are only the more recent instances of a phenomenon of much greater antiquity. The seventeenth and eighteenth centuries saw vast migration of people out of Europe, though these movements were the result of conquests and colonization rather than movements from one sovereign state into another. But the nineteenth century, particularly the latter half, saw migration of the latter kind from Europe to countries of North and South America, as well as capital investment by residents of Europe in these

To the basic model of international factor mobility is added a third, immobile factor. Unlike the basic model, the factor flows that result from a policy of free mobility are now uniquely determined. Additionally, a large variety of privately optimal national policies is predicted, each dependent upon the country's endowment pattern and the fiscal instruments available to it. Several of the predicted policies, e.g. subsidies paid to migrant factors and simultaneous restrictions on the export of both factors, are incompatible with the basic model.

In this paper I study the welfare gains from free and restricted international movement of factors in the presence of free and restricted trade in goods. In moving from an equilibrium with trade in ...

This paper analyzes two different ways of allowing foreign capital inflow: introducing it into the domestic economy and introducing it into a duty-free zone. It shows how the ranking of the two policies depends on the production patterns in the duty-free zone and the rules of factor income repatriation. The result can be used to explain the discrepancy between the rankings of these policies in two recent papers. The analysis also shows how the way of repatriating factor income could affect the equilibrium of factor movement, the welfare of the factor owners and the welfare of the countries concerned.