Search Results

Showing results 1 to 9 of approximately 9.

(refine search)
SORT BY: PREVIOUS / NEXT
Author:Baxter, Marianne 

Working Paper
IKEA: product, pricing, and pass-through
With over 300 stores in 40 countries, IKEA is a major international presence in retail housewares and furnishings. IKEA publishes country-specific catalogs with local-currency prices guaranteed to hold for 1 year. This paper explores a new dataset of IKEA products and catalog prices covering six countries for the time period 1994?2010. The dataset, with over 140,000 observations, is uniquely poised to shed light on the way in which a large multinational retailer operates in a setting characterized by a very large number of goods, distributed and priced in many countries. Thus, the goal of this paper is to document the choices made by IKEA in several related decision areas. In doing so, this paper provides evidence against which existing theories can be evaluated and revised in the light of this new information.
AUTHORS: Baxter, Marianne; Landry, Anthony E.
DATE: 2012

Conference Paper
IKEA: product, pricing, and pass-through
With over 300 stores in 40 countries, IKEA is a major international presence in retail housewares and furnishings. IKEA publishes country-specific catalogs with local-currency prices guaranteed to hold for 1 year. This paper explores a new dataset of IKEA products and catalog prices covering six countries for the time period 1994-2010. The dataset, with over 140,000 observations, is uniquely poised to shed light on the way in which a large multinational retailer operates in a setting characterized by a very large number of goods, distributed and priced in many countries. Thus, the goal of this paper is to document the choices made by IKEA in several related decision areas. In doing so, this paper provides evidence against which existing theories can be evaluated and revised in the light of this new information.
AUTHORS: Baxter, Marianne; Landry, Anthony E.
DATE: 2012-11

Working Paper
What determines bilateral trade flows?
This paper undertakes an exhaustive search for robust determinants of international trade, where "robustness" is tested using three popular empirical methods. The paper is frankly atheoretical: our goal is solely to establish statistically robust relationships. Along the way, however, we relate our results to the empirical results obtained by prior researchers and to the received theory of international trade. We find that robust variables include a measure of the scale of factor endowments; fixed exchange rates; the level of development; and current account restrictions. Variables that are robust under certain methods and sample periods include exchange rate volatility, an index of sectoral similarity, and currency union. However, the estimated coefficient on currency union is much smaller than estimates obtained by prior researchers.
AUTHORS: Baxter, Marianne; Kouparitsas, Michael A.
DATE: 2005

Working Paper
Trade structure, industrial structure, and international business cycles
This paper examines the extent to which the composition of a country's production and trade differs among its trade partners. For example, does the US export the same bundle of goods to the UK as it does to Japan? If we find high dispersion in a country's export and import bundles with its various trading partners, can this be linked to identifiable country characteristics? These findings are important for two reasons. First, they enrich our empirical understanding of the nature of trade. Second, they will stand as a guide for further development of economic theories of the international transmission of business cycles.
AUTHORS: Baxter, Marianne; Kouparitsas, Michael A.
DATE: 2002

Working Paper
What can account for fluctuations in the terms of trade?
Fluctuations in the terms of trade the price of a country?s exports relative to the price of its imports are a source of perennial concern to policymakers in developing countries and industrialized nations alike. Terms of trade growth is extremely volatile and can lead to sudden changes in a country?s economic health. This paper seeks to understand the sources of fluctuations in the terms of trade. We decompose a country?s terms of trade volatility into a component stemming from differences in the composition of import baskets and export baskets, which we define as a goods price effect, and a component due to cross-country differences in the price of a particular class of goods, which we call a country price effect. We ask whether the decomposition depends in a clear way on country characteristics-developed vs. less-developed; exporter of manufactured goods vs. exporter of fuels or other commodities? Our goal in this paper is twofold. First, we provide new evidence on the sources of terms of trade volatility that should be of use to policymakers, Seconds, the stylized facts that emerge from this analysis will provide guidance for economists seeking to build better models of interdependent economies.
AUTHORS: Baxter, Marianne; Kouparitsas, Michael A.
DATE: 2000

Discussion Paper
Productive externalities and business cycles
This paper begins with the observation that the volatility of factor input growth is insufficient to explain the volatility in the growth rate of output, and explores the empirical plausibility of the hypothesis that this fact is due to the presence of productive externalities and increasing returns to scale. We construct a quantitative equilibrium macroeconomic model which incorporates these features, and allows for demand shocks operating at the level of the consumer. We employ the method of Hall (1986) and Parkin (1988) to measure these demand shocks, and use these measured disturbances to conduct stochastic simulations of the model. We find that the model with increasing returns, when driven by measured demand shocks, generates time series which replicate the basic stylized facts of U.S. business cycles, although with lower amplitude. However, in the absence of increasing returns the measured demand shocks do not produce a characteristic business cycle response. When preference shocks are combined with productivity shocks, we find that both the increasing returns and the constant returns models correctly predict a weak correlation between hours and wages, while the predictions of the increasing returns model provide the better overall match with the data.
AUTHORS: Baxter, Marianne; King, Robert G.
DATE: 1991

Discussion Paper
Fiscal policy, specialization, and trade in the two-sector model: the return of Ricardo?
This paper develops a two-sector neoclassical model of international trade with endogenous capital accumulation and intertemporal optimization. In contrast to the traditional 2x2x2 model, there is a Ricardian implication that countries specialize according to comparative advantage. Consequently, the theory predicts that government expenditure policies are unlikely to affect the established pattern of specialization and trade, but that changes in tax policies can result in a dramatic reorganization of world production. Further, the dynamic 2x2x2 model can explain many of the salient features of international trade that are problematic for the standard Heckscher-Ohlin-Samuelson model.
AUTHORS: Baxter, Marianne
DATE: 1991

Discussion Paper
Business cycles and the asset structure of foreign trade
Since the primary role of international financial linkages is to facilitate consumption smoothing in the face of country-specific shocks, the degree of international financial integration should play an important role in the international transmission of business cycles. This paper therefore studies the business cycle implications of restricting international trade in financial assets. The key restriction is that domestic residents must hold all risky claims to domestic output, trading only noncontingent bonds on the international asset markets. We find that restricting asset trade may or may not change the business cycle implications of the model relative to complete markets, depending on the parameterization of the stochastic process for productivity. When there are important differences, these stem largely from differential wealth effects. We also find that restricting asset trade can resolve the chief problem inherent in complete markets models, which is their predictions of too-high consumption correlations and too-low output correlations. When technology follows a random walk process, the restricted asset markets model predicts that cross-country output correlations are positive, and cross-country consumption correlations are smaller than the output correlations, as is typically observed in the data.
AUTHORS: Crucini, Mario J.; Baxter, Marianne
DATE: 1992

Working Paper
Determinants of business cycle comovement: a robust analysis
This paper investigates the determinants of business cycle comovement between countries. Our dataset includes over 100 countries, both developed and developing. We search for variables that are ?robust? in explaining comovement, using the approach of Leamer (1983). Variables considered are (i) bilateral trade between countries; (ii) total trade in each country; (iii) sectoral structure; (iv) similarity in export and import baskets; (v) factor endowments; and (vi) gravity variables. We find that bilateral trade is robust. However, two variables that the literature has argued are important for business cycles - industrial structure and currency unions - are found not to be robust.
AUTHORS: Baxter, Marianne; Kouparitsas, Michael A.
DATE: 2004

PREVIOUS / NEXT