As trade among members of the European Union (EU) is now free of tariffs, the harmonization of technical regulations or standards has become an important issue for deeper integration of the internal market. A previous analysis of the completion of the Single Market calculated that in 1996 about 80% of intra-EU trade was been affected by harmonization of technical regulations. A major objective of this thesis is to examine to what extent harmonization of regulations has reduced the so called border effect. After a brief survey of the gravity literature, we propose and test some economic and econometric extensions of the standard gravity model. This model is then applied to total manufacturing as well as to more detailed levels corresponding to different harmonization approaches. We find that harmonization of technical regulations has a positive impact on imports of total manufacturing. However, this hardly explains the importance of border effects within the EU. This result is supported at a more disaggregated level when we distinguish between manufacturing sectors according to the type of EU harmonization including the category where technical barriers do not apply. In addition, sectors where harmonization is of minor importance exhibit smaller border effects. The last part of the thesis examines, with particular reference to EU and enlargement, how environmental regulations at the national and EU level have collided and affected exports. The major findings are that more harmonization has been accompanied by higher levels of domestic environmental regulations in candidate countries. In addition, the level of domestic environmental regulations - when treated endogenously - has a larger negative effect on EU exports. We employ a newly constructed data set that contains information at the three digit level of manufacturing industries. For each industry we identify the dominant harmonization approach used by the European Commission to the removal of technical barriers to trade in the EU.

On the occasion of the thirtieth anniversary of China's economic transition, this thesis deals with several facets of the integration of Chinese domestic market over such an exciting era. Chapter 1 discusses first a variety of institutional reforms aimed at reinforcing the central control over regional affairs and improving the integration of domestic market. Several stylised facts about the local protectionism, which come from a recent survey implemented by a respected institution, are also illustrated in the chapter. Chapter 2 offers a brief review of the literature relative to China's internal integration. Generally speaking, the studies have proceeded along six major lines: similarity of production structure, price convergence, synchronization of business cycles, domestic trade linkages, interregional capital mobility and population migration. Chapter 3 examines the trade pattern within China. In the spirit of McCallum (1995), we find that after controlling for various traditional gravity factors, the trade flows within a Chinese province are 23 to 28 times as dense as those between provinces over the period of 1992-2003. Such findings suggest a highly fragmented product market within China. A trend toward market integration is, however, derived from the evolution analysis. The regressions by sub-period samples show that since the mid-1990s, the magnitudes of border effects have exhibited a dramatic decline. Chapter 4 investigates the capital mobility and capital allocation efficiency among Chinese provinces. We show first that the provincial savings and investment rates are significantly and positively correlated over the period of 1978-2006. According to the Feldstein-Horioka's argument (1980), this relationship can be interpreted as evidence of low capital mobility. Furthermore, by testing the causality between provincial aggregate investment and income, we fail to provide consistent evidence to support the hypothesis of efficient capital allocation in China. Chapter 5 addresses the labor force migration among Chinese regions. After a short introduction of reforms of hukou system, we derive a simple wage gap equation including education level, market potential and provincial border indicator as explaining variables. In using city and sector-level data, we find that other things being equal, the wage dispersions within provincial borders are significantly less pronounced than those among provinces over the period of 2003-2005. According to the law of one price, such findings imply a weak mobility of labor force among provinces.

Considering the impact of transaction costs on trade volumes and prices in Europe, in our thesis, we carried out an overview of the costs of crossing borders and an assessment of the degree of fragmentation of the product market in this world area. Throughout the analysis, we paid attention to the country and/ or industry dimension and at how country- and sector-specific patterns affect the European product market integration process. A special attention is also devoted to the model specifications and estimation techniques. Having discussed extensively the foundations of the gravity equation and the properties of the gravity model with the aim of empirical works in the first chapter of our dissertation, chapter two provides a first assessment of the extent of the integration in Europe by measuring the trade intensity via an augmented gravity equation. The study measures the impact of regional trade agreements (RTAs) on Members’ trade in the European zone and highlights that despite the ongoing enlargement process of its free trade area, the European zone displays rather weak RTAs impacts - in comparison with what one could expect -. The chapter also highlights a number of caveats and difficulties when one wants to accurately measure the extent of trade creation brought about the RTAs in Europe. In particular, the existence of zero observations (non observed commodity flows) between country pairs might have important drawbacks in the estimations. Since disaggregated trade data can be very insightful, chapter three implements such an analysis. Using a gravity-like equation as well, it provides a border effect estimations carried out in a multi-country and multi-sector context. Our findings reveal that remaining technical barriers to trade, market structure and degree of product differentiation play an important role in the explanation of border effects. Furthermore, our results succeed to derive a strongly negative impact of nominal exchange rate volatility on trade, whereas traditional gravity specifications fail to identify this clearly – when regional dummies are introduced-. Hence, chapter two and three provide an overview, via the trade channel, of the degree of integration of the product market in Europe: While European agreements (EAs) in terms of trade are effective, bilateral trade relationships face steady impediments. As expected, intra-EAs trade increases and exports from Member States to non Member States decline. The trade obstacles have many sources. In particular, volatility of the nominal exchange rate is found to have trade-reducing effects. Our results also underscore the interest of using sector disaggregated date since we find that the degree of product differentiation and the market structure enter in the explanation of border effects. Moreover, the various approaches to harmonize the remaining technical barriers to trade on sector desegregation basis were found to act in reducing on the European Union border effect. As for chapter four, it re-visits the issue of price convergence within the EMU. Specifically, we test whether the Law of One Price (LOOP) can be validated over the period 1984-2004. Our results fail to support the LOOP for a large majority of sectors and countries under examination. Furthermore, our findings reveal half-lives of deviation from the LOOP suggesting a price adjustment which is globally less slow that commonly estimated in the literature. Indeed, the EMU is anticipated to affect the behaviour of trading firms that should result in a faster cross-border transmission of price movements across Member States. When attempting to explain the factors at work in the LOOP failure, we highlight that beside the European convergence process, the arbitrage channel explain a non negligible part of the country mean reversion in terms of relative prices. Nevertheless, mixed evidence is found for the impact of cross- country and cross-sector variables.

Thesis advisor: Ryan Chahrour / Virtual Economies present an excellent opportunity to study Economic concepts and phenomena in a controllable environment where perfect data collection exists. This paper uses Macroeconomic data provided by CCP Games on EVE Online to explore how the Quantity Theory of Money holds in a world without finance. The study supports the Real Business Cycle's effects on prices. Furthermore, a quick look is taken on the effects that player imposed borders have on trade within the EVE universe. It appears that, even in a virtual world, borders tend to reduce patterns of trade among neighboring regions. These findings encourage the further use of virtual economies, particularly Massive Multiplayer Online Role Playing Games (MMORPGs), as petri dishes for the study of macroeconomic theories. / Thesis (BA) — Boston College, 2020. / Submitted to: Boston College. College of Arts and Sciences. / Discipline: Departmental Honors. / Discipline: Economics.

The push for clean energy has caused a rapid growth of renewables in the electricity supply mix of the EU. Although one would assume that the impact of these technologies is entirely positive, recent research and experience indicate that there is reason for concern namely regarding the security of supply. In this context, the concern is how renewable energy sources (RES) affect the business case of conventional power generation. In response to this concern, capacity mechanisms are being considered or have already been implemented by various member states of the EU. However, in a highly interconnected electricity system, such as the one in Europe, there appears to be a risk that the uncoordinated implementation of capacity mechanisms may cause unintended cross-border effects. This research explored the performance of various capacity mechanisms in an electricity system with a strong growth in the portfolio share of variable renewable energy sources (RES). The cross-border effects of implementing various capacity mechanisms in an interconnected power system were also analyzed. In this research, two capacity mechanisms, namely a strategic reserve and a capacity market, were modeled as extensions to the EMLab-Generation agent-based model. Furthermore, two variations of a capacity market were analyzed. The first was a yearly capacity market design and the second was a forward capacity market with long term contracts. A survey of experts on the US capacity markets supplemented the modeling work with practical insights. / <p>QC 20161006</p><p>The Doctoral Degrees issued upon completion of the programme are issued by Comillas Pontifical University, Delft University of Technology and KTH Royal Institute of Technology. The invested degrees are official in Spain, the Netherlands and Sweden, respectively.</p><p>copyright (c) 2016 P. C. Bhagwat</p>

A l'occasion du trentième anniversaire de la transition économique de la Chine, ma thèse traite de plusieurs aspects de l'intégration du marché intérieur chinois au cours de cette époque passionnante. Le chapitre 1 donne d’abord un aperçu des réformes institutionnelles visant à renforcer le contrôle d’Etat à l’égard des affaires régionales et promouvoir l’intégration du marché chinois entreprises depuis 1978. Des faits stylisés récents de la protection locale révélés par une enquête sont ensuite illustrés. Le chapitre 2 présente une revue rapide de la littérature relative à l’intégration économique entre régions chinoises. En général, ces travaux peuvent être regroupés en six volets principaux: similarité de la structure de production; convergence des prix; synchronisation des cycles d’activité; commerce domestique; mobilité inter-régionale des capitaux ; et migration interne. Le chapitre 3 étudie le commerce domestique en Chine. Dans l’esprit de McCallum (1995), nous montrons qu’en contrôlant diverses variables gravitationnelles classiques, les flux commerciaux à l’intérieur d’une province sont 23 à 28 fois plus intenses que les flux inter-provinciaux pendant la période 1992-2003. Ces résultats donnent une indication de la fragmentation du marché des marchandises entre provinces chinoises. Néanmoins, à partir des régressions par sous-période, ces barrières commerciales liées aux frontières provinciales ont connu un déclin manifeste depuis le milieu des années 90. Le chapitre 4 se penche sur la mobilité et l’efficacité allocative des capitaux entre les provinces chinoises. Tout d’abord, nous mettons en évidence que les taux d’épargne et d’investissement provinciaux sont significativement corrélés durant la période 1978-2006. Selon l’argument de Feldstein et Horioka (1980), ces résultats s’interprètent comme une indication de faible mobilité inter-provinciale des capitaux. De surcroît, en détectant la causalité entre l’investissement agrégé et le revenu provinciaux, nous établissons l’efficacité médiocre de l’affectation des capitaux au sein de Chine. Le chapitre 5 porte sur les migrations des mains-d’œuvre entre les régions chinoises. Après une brève présentation des réformes du système de hukou, nous proposons un modèle expliquant les différentiels de salaire avec l’indicateur de frontière provinciale. A partir des statistiques enregistrées par ville et par secteur, nous montrons que la dispersion salariale à l’intérieur d’une province est significativement moins prononcée que la dispersion inter-provinciale durant la période de 2003-2005, toutes choses égales d’ailleurs. Selon la loi du prix unique, telles distorsions liées aux frontières provinciales suggèrent une faible mobilité des mains-d’œuvre entre les provinces chinoises. / On the occasion of the thirtieth anniversary of China’s economic transition, this thesis deals with several facets of the integration of Chinese domestic market over such an exciting era. Chapter 1 discusses first a variety of institutional reforms aimed at reinforcing the central control over regional affairs and improving the integration of domestic market. Several stylised facts about the local protectionism, which come from a recent survey implemented by a respected institution, are also illustrated in the chapter. Chapter 2 offers a brief review of the literature relative to China’s internal integration. Generally speaking, the studies have proceeded along six major lines: similarity of production structure, price convergence, synchronization of business cycles, domestic trade linkages, interregional capital mobility and population migration. Chapter 3 examines the trade pattern within China. In the spirit of McCallum (1995), we find that after controlling for various traditional gravity factors, the trade flows within a Chinese province are 23 to 28 times as dense as those between provinces over the period of 1992-2003. Such findings suggest a highly fragmented product market within China. A trend toward market integration is, however, derived from the evolution analysis. The regressions by sub-period samples show that since the mid-1990s, the magnitudes of border effects have exhibited a dramatic decline. Chapter 4 investigates the capital mobility and capital allocation efficiency among Chinese provinces. We show first that the provincial savings and investment rates are significantly and positively correlated over the period of 1978-2006. According to the Feldstein-Horioka’s argument (1980), this relationship can be interpreted as evidence of low capital mobility. Furthermore, by testing the causality between provincial aggregate investment and income, we fail to provide consistent evidence to support the hypothesis of efficient capital allocation in China. Chapter 5 addresses the labor force migration among Chinese regions. After a short introduction of reforms of hukou system, we derive a simple wage gap equation including education level, market potential and provincial border indicator as explaining variables. In using city and sector-level data, we find that other things being equal, the wage dispersions within provincial borders are significantly less pronounced than those among provinces over the period of 2003-2005. According to the law of one price, such findings imply a weak mobility of labor force among provinces.

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Dans le premier chapitre, nous avons travaillé sur l’impact d’une réévaluation réelle de la monnaie chinoise sur ses excédents commerciaux. Nous avons suggéré une nouvelle approche pour mesurer cet impact, en utilisant des données de panel relatives aux exportations et aux importations des entreprises à capitaux étrangers et domestiques implantées dans vingt-et-huit provinces chinoises. Nous avons constaté que l’effet d’une réévaluation du Yuan sur les exportations et les importations était plus accentué après l’accession de la Chine à l’OMC. Enfin, d’autres facteurs comme le taux de change nominal et les prix relatifs entrent en jeu dans l’explication de la dynamique des exportations et des importations de la Chine.Dans le deuxième chapitre, nous avons étudié les effets spatiaux sur les exportations et les importations provinciales des entreprises multinationales et domestiques. Nous avons utilisé trois différentes matrices de poids spatiales et maintenu la même division de période qu’au premier chapitre. La méthodologie d’estimation spatiale utilisée a révélé des effets spatiaux importants sur les exportations et les importations des deux types d’entreprises, mais a aussi permis de faire un état des lieux sur l’intégration du marché domestique de la Chine. Dans le troisième chapitre, nous avons étudié les flux de capitaux vers la Chine déguisés en valeur d’échanges commerciaux. Nous avons proposé une nouvelle approche en utilisant les prix des produits échangés les plus susceptibles à la manipulation et étudié leur sensibilité à l’anticipation d’une réévaluation future de la monnaie chinoise. Nous avons trouvé que la balance commerciale de la Chine était surestimée. / In the first chapter, we investigate the impact of a revaluation of the China’s Yuan on its trade balance. We use panel data on export and import of multinational and domestic firms, disaggregated at a regional level in the period 1996-2012.We find significant impact of a revaluation of the Yuan on export and import, the impact differs regionally, time period, and by firms. We also find that other factors like nominal exchange rate and relative prices play significant role in explaining China’s trade balance.In the second chapter, we investigate the spatial effects on China’s trade performance. In fact, we use the same data as in the first essay.We use three different weight matrices to take into account the dynamism in the China’s decentralization policies.We find significant spatial effects on export and import, varying between firms, regions and time period. This essay also reveals important facts on the China’s domestic market integration. In the last chapter, we put forth a new approach to measure capital inflows into China hidden in the regular trade flows. This phenomenon known as trade misinvoicing is suspected to actually overstate China’s trade surpluses.We measure the sensitivity of the prices for some commodities which are the most susceptible to trade misinvoicing to the non-deliverable forward exchange rate for the Yuan in Hong-Kong. We find that, in fact China’s trade balance is relatively overestimated.