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We estimate the elasticity of private-sector employment to non-oil GDP in the Gulf Cooperation Council (GCC) for GCC nationals and expatriates using a Seemingly Unrelated Error Correction (SUREC) model. Our results indicate that the employment response is lower for nationals, who have an estimated short-run elasticity of only 0.15 and a long-run response of 0.7 or less. The elasticity is almost unity for expatriates in the long run and 0.35 in the short run. We interpret low elasticities as indirect evidence of labor market adjustment costs, which could include hiring and firing rigidities, skills mismatches, and reluctance to accept private sector jobs. Forecasts suggest that, absent measures to reduce adjustment costs, the private sector will only be able to absorb a small portion of nationals entering the labor force.

Labor --- Macroeconomics --- Labor Economics Policies --- Labor Economics: General --- Labor Force and Employment, Size, and Structure --- Labor Demand --- Employment --- Unemployment --- Wages --- Intergenerational Income Distribution --- Aggregate Human Capital --- Aggregate Labor Productivity --- Demand and Supply of Labor: General --- Public Enterprises --- Public-Private Enterprises --- Labour --- income economics --- Civil service & public sector --- Labor markets --- Public employment --- Labor force --- Public sector --- Economic sectors --- Economic theory --- Labor market --- Finance, Public --- Saudi Arabia --- Income economics

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We develop a model of endogenous skill-biased technical change in developing countries. The endogenous response to a rise in skill supply counters the traditional substitution effect and dampens its role in reducing wage inequality. The model re-enforces consensus estimates of the elasticity of substitution between more/less educated workers by reconciling dispersed existing estimates. It also rationalizes estimates that were hitherto deemed implausible or model-inconsistent. We produce new estimates for developing countries with a novel global panel (finding values at or just above 2) and with Latin American data that facilitates analysis of dynamics (which reduce estimates to 1.7-1.8). We therefore shed new light on a parameter that is crucial for inequality, growth, and other key macroeconomic questions.

Currency crises --- Diffusion Processes --- Economic & financial crises & disasters --- Economic Development: Human Resources --- Economics of specific sectors --- Economics --- Economics: General --- Education --- Education: General --- General issues --- Human Capital --- Human Development --- Income Distribution --- Income economics --- Informal sector --- Innovation --- Intellectual Property Rights: General --- Labor Demand --- Labor market --- Labor Productivity --- Labor --- Labour --- Macroeconomics --- Migration --- Occupational Choice --- Occupational Licensing --- Professional Labor Markets --- Research and Development --- Skilled labor --- Skills --- Technological Change --- Technological Change: Choices and Consequences --- Technology --- Unskilled labor --- Wage Differentials --- Wage Level and Structure --- Wages --- Wages, Compensation, and Labor Costs: General

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In November 2014, OPEC announced a new strategy geared towards improving its market share. Oil-market analysts interpreted this as an attempt to squeeze higher-cost producers including US shale oil out of the market. Over the next year, crude oil prices crashed, with large repercussions for the global economy. We present a simple equilibrium model that explains the fundamental market factors that can rationalize such a "regime switch" by OPEC. These include: (i) the growth of US shale oil production; (ii) the slowdown of global oil demand; (iii) reduced cohesiveness of the OPEC cartel; (iv) production ramp-ups in other non-OPEC countries. We show that these qualitative predictions are broadly consistent with oil market developments during 2014-15. The model is calibrated to oil market data; it predicts accommodation up to 2014 and a market-share strategy thereafter, and explains large oil-price swings as well as realistically high levels of OPEC output.

Petroleum products --- Oil-shale industry. --- Petroleum industry and trade. --- Prices. --- Organization of Petroleum Exporting Countries. --- Energy industries --- Oil industries --- Petroleum industry and trade --- Petroleum --- Prices --- Munazẓamat al-Buldān al-Muṣaddirah li-Nafṭ --- O.P.E.C. --- O.P.E.P. --- OPEC --- OPEK --- OPEP --- Organisation of Petroleum Exporting Countries --- Organización de Países Exportadores de Petróleo --- Organizația Țărilor Exportatoare de Petrol --- Organization of the Petroleum Exporting Countries --- Sekiyu Yushutsukoku Kikō --- Ūbbik --- Ūpik --- Sāzmān-i Kishvarʹhā-yi Ṣādirʹkunandah-yi Naft --- אופ׳ק --- منظمة البلدان المصدرة للبترول --- منظمة البلدان المصدرة للنفط --- اوبك --- اوپك --- سازمان کشورهاى صادرکنندهى نفت --- OPEC (Organization of the Petroleum Exporting Countries) --- سازمان کشور‌هاى صادرکننده‌ى نفت --- Agriculture: Aggregate Supply and Demand Analysis --- Commodities --- Consumption --- Demand elasticity --- Derivative securities --- Economic theory & philosophy --- Economic Theory --- Economic theory --- Economics --- Elasticity --- Energy: Demand and Supply --- Energy: General --- Expenditure --- Expenditures, Public --- Finance --- Financial institutions --- Financial Instruments --- Futures --- Industries: Energy --- Institutional Investors --- Investment & securities --- Investments: Energy --- Investments: Futures --- Macroeconomics --- Macroeconomics: Consumption --- Macroeconomics: Production --- Mining, Extraction, and Refining: Hydrocarbon Fuels --- Monopolization Strategies --- Monopoly --- National accounts --- National Government Expenditures and Related Policies: General --- Non-bank Financial Institutions --- Oil consumption --- Oil prices --- Oil production --- Oil --- Pension Funds --- Petroleum, oil & gas industries --- Production --- Public expenditure review --- Public finance & taxation --- Public Finance --- Saving --- Wealth --- United States

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In terms of size, the net income balance (IB) is comparable to the trade balance (TB) for many countries. Yet the role of the IB in mitigating external vulnerabilities or complicating external adjustment remains underexplored. This paper studies the role of the IB in stabilizing or destabilizing the current account over the cycle and in crises. Our results show that, due to a negative correlation with the TB, the IB significantly dampens the time series volatility of the current account for most countries. However, the IB generally does not improve during crisis episodes, so current account adjustment occurs entirely through improvements in the TB. The paper also estimates IB semi-elasticities with respect to the exchange rate (ER). Semi-elasticities are small for most countries, so the IB is generally not a significant channel through which the ER stabilizes the current account, and trade-based semi-elasticities are, with some important exceptions, good proxies for current account semi-elasticities used in external sector assessments.

Macroeconomics --- Economics: General --- Exports and Imports --- Foreign Exchange --- Financial Risk Management --- Money and Monetary Policy --- 'Panel Data Models --- Spatio-temporal Models' --- Multiple or Simultaneous Equation Models: Models with Panel Data --- Empirical Studies of Trade --- International Investment --- Long-term Capital Movements --- Remittances --- Current Account Adjustment --- Short-term Capital Movements --- International Lending and Debt Problems --- Foreign Aid --- Open Economy Macroeconomics --- Financial Crises --- International Financial Markets --- Aggregate Factor Income Distribution --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Economic & financial crises & disasters --- Economics of specific sectors --- International economics --- Currency --- Foreign exchange --- Monetary economics --- Income --- National accounts --- Current account --- Balance of payments --- Exchange rates --- Financial crises --- Credit --- Money --- Currency crises --- Informal sector --- Economics --- Colombia

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While intermediates comprise the majority of total goods trade in the European Union (EU), their share of total trade has remained flat since 1996. This implies that EU enlargement has had a limited effect on the size of Factory Europe. However, enlargement coincides with an increase in Factory Europe's complexity. Using two new measures of the complexity of intermediates products, we show that internal EU intermediates trade has become more sophisticated and uses more relationship-specific inputs over time and relative to external EU trade. In other words, Factory Europe has become brainier but not necessarily brawnier. There is also an asymmetry. While the 1995 EU members have not become more significant trading partners for the new members, the new members have become a more important source of intermediates for the EU15 and also a more important market. In sum, the structure of EU trade has changed--not only is the EU15 giving the new members a bigger share of its tasks, it is also giving them harder ones.

Agriculture --- Competition --- Consumers --- Economic Policy --- Export Competitiveness --- Exporters --- Free Trade Agreements --- Gdp --- Global Economy --- Infrastructure --- Legal Framework --- Market Economy --- Measurement --- Multinational Corporations --- Outsourcing --- Preferential Trade Agreements --- Productivity --- Reputation --- Tariffs --- Total Factor Productivity --- Trade --- Trade Agreements --- Trade Policy --- Transaction Costs --- Transport --- Transport Costs --- Vehicles --- Wages --- World Development Indicators