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Abstract

This paper investigates the effects of subnational regionalization on a country’s terms of trade, trade patterns, and its welfare. We show that a countrycan gain from dividing itself into two regions with different factor ratios. Making a region in a countryto have a comparative advantage different from the country as a whole cangenerate a welfare improving terms-of-trade effect. We also show that subnational regionalization can reduce thevolume of trade and or even reverse countries’ trade patterns. This explains theparadox between trade patterns predicted by the standard Heckscher-Ohlin model and those found empirically.

Abstract

The effectiveness of building energy codes is studied taking a long-run perspective. We focus on regulation´s impact on energy demand in high-end and low quality residences, i.e. the diffusion and the entry of "green" buildings in the housing market. We develop a measure for regulation intensity and apply this to a panel-error-correction regression model for energy requirements of a large sample of German apartment houses built between 1950-2005. We show that regulation is effective in saving energy. In particular, regulation pushes investors in the low quality housing market segment towards the technological frontier. Indirectly, it also affects the high-end housing market segment.