International Economics Commons^™

Current Account “Core-Periphery Dualism” In The Emu, Tatiana Cesaroni, Roberta De Santis

Roberta De Santis

Current account (CA) dispersion within European Union (EU) member states has been increasing progressively since the 1990s. Interestingly, the persistent deficits in many peripheral countries have not been accompanied by a significant growth process able to stimulate a log run rebalancing as neoclassical theory predicts. To shed light on the issue this paper investigates the determinants of Eurozone CA imbalances, focusing on the role played by financial integration. The analysis considers two samples of 22 OECD and 15 EU countries, three time horizons corresponding to various steps in European integration, different control variables and several panel econometric methods. The results …

Is The Wto Quietly Fading Away?: The New Regionalism And Global Trade Rules, Stephen J. Powell, Trisha Low

Stephen Joseph Powell

While scholars and governments alike view the liberalization of international trade as a positive development, they disagree on the medium that will accomplish this objective with the highest economic returns. Some experts believe that multilateralism through the 150+ member World Trade Organization (WTO) is the only way to achieve truly open and efficient trade. Others view multilateralism as but an aspiration and find that regionalism offers the only viable prospect for the meaningful further opening of markets. In light of what we label the "new regionalism," our paper explores in detail the positive and negative effects of regional trade arrangements …

Perspectives On The Global Financial Crisis From Emerging Managers And Public Policy Makers [Full Version], James L. Grant

James L. Grant

This manuscript attempts to capture the perspectives of emerging managers and public policy makers as evinced in the perspectives of graduate students and others who were enrolled in my newly developed course on the global financial crisis—first offered in the 2010 Harvard Summer Economics Program—at a time when students were engaged in the midst and aftermath of the most severe U.S. and worldwide recession since the Great Depression of the early 1930s. The many perspectives gathered on the causes, consequences, remedies, and perhaps more importantly, a glimpse at student thoughts, concerns, and worries at the time—have been collected from the …

Eu-China Economic Relations: Interactions And Barriers, Zheng Lu

Zheng Lu (Chinese: 路征)

EU-China economic interactions became more and more frequent in the past decades, nowadays EU and China are main trade partner for each other. This paper analyzed EU-China economic interactions from three dimensions: bilateral governmental interactions, trade and investment flows as well as barriers to trade and investment. Findings show that EU-China close relationship is particularly based on goods trade especially on intra-industrial trade of manufacturing industrial products, and trade imbalance is arising from trade in Machinery and Transport Equipment and Other Manufactured Goods (e.g., Clothing and clothing accessories); This paper also found that there exist a myriad of trade and …

Implications Of Export Competitiveness And Performance Of Textile And Clothing Sector Of Pakistan: Pre And Post Quota Analysis, Nawaz Ahmad

Nawaz Ahmad

Textile and Clothing sector of Pakistan has been facing different international trade reforms i.e. Multi-fiber Arrangements, Quota elimination and for some of the developing countries European union, introduced special trade arrangements like GSP plus to improve their balance of trade conditions. In the light of pre quota elimination and post quota elimination periods, this paper highlights trade performance of textile and clothing sector in depth. This study focused on finding the extent of revealed comparative advantage of textile and revealed comparative advantage of clothing sector on overall textile and clothing trade performance of Pakistan. For this purpose study applied Johansen …

Notes On The Policy Seminar On Inequality And Development, Held On The 26th Of September 2014 At The Ministry Of Foreign Affairs Of Finland, J. G. A. Saviranta

Akseli Saviranta

The following document presents summarised key notes from the United Nations University – World Institute for Development Economics Research (UNU-WIDER) policy seminar titled “Inequality and Development – Trends and Policies”. This policy seminar represented a follow-up to a prior two-day conference organised earlier in the same month by the same institute, in which the author has participated as well.

Network Analysis Of World Trade Using The Baci-Cepii Dataset, Luca De Benedictis, Silvia Nenci, Gianluca Santoni, Lucia Tajoli, Claudio Vicarelli

Luca De Benedictis

In this paper we explore the BACI-CEPII database using Network Analysis. Starting from the visualization of the World Trade Network, we then define and describe the topology of the network, both in its binary version and in its weighted version, calculating and discussing some of the commonly used network’s statistics. We finally discuss some specific topic that can be studied using Network Analysis and International Trade data, both at the aggregated and sectoral level. The analysis is done using multiple software (Stata, R, and Pajek). The scripts to replicate part of the analysis are included in the appendix, and can …

Women’S Empowerment And Community-Driven Development: Evidence From The Solomon Islands, Erin M. Steffen

Erin M Steffen

The study evaluates the impact to-date of a community-driven development (CDD) program on women’s empowerment in the Solomon Islands. Originally launched in 2008, the CDD program is known as the Rural Development Program (RDP). The RDP aims to foster employment and income growth by focusing on participatory development, demand-responsive provisions of government services, and the creation of a supportive economic environment for small-scale rural development. The RDP process mandates female involvement, which manifests predominately in the selection of community infrastructure projects and by participation in a RDP subcommittee known as the Sub-Implementation Committee (SIC). Members of the SIC are in …

Use Of Imported Inputs And The Cost Of Importing: Evidence Form Developing Countries, Mohammad Amin, Asif Islam

Mohammad Amin

For a representative sample of manufacturing firms in 26 countries, the paper shows that changes in the cost of importing over time is significantly and negatively correlated with changes in the percentage of firm’s material inputs that are of foreign origin. Furthermore, we show that there may be a non-linear relationship between import costs and imports. These findings are important as recent studies point towards a significant positive effect of imported inputs on productivity and growth. We hope that the present paper inspires more work on the determinants of imported inputs usage especially in developing countries.

Gravity Of Arms, Florian Johannsen, Inmaculada Martinez-Zarzoso

Inma Martinez-Zarzoso

The main aim of this paper is to investigate the political determinants of international arms transfers. We distinguish between the decision to export arms (extensive margin) and the value of the arms exported (intensive margin). A theoretically-justified gravity model of trade augmented with political factors is estimated using a two-stage panel data approach for 104 exporting countries over the period of 1950 to 2007. For main political factors, we consider the level of democracy as well as the political orientation of the ruling governments in both of the trading partners. Furthermore, we account for political differences between trading partners, the …

Assessing The Price-Raising Effect Of Non-Tariff Measures In Africa, Olivier Cadot, Julien Gourdon

Julien Gourdon

In spite of widespread tariff reductions, intra-African borders remain ‘thick’. Regional trade is inhibited by inadequate transportation infrastructure but also by various non-tariff measures (NTMs). This paper combines price data from the World Bank’s International Comparison Project with a new database on NTMs to estimate their effect on consumer prices for selected consumption products. Results based on panel regressions on 1,260 country-product pairs suggest that, after controlling for tariffs, systematic cross-country cost-of-living differences, and product-specific unobservables, sanitary and phytosanitary measures contribute to raise the price of African foodstuffs by 14%. At the product level, rice and other cereals, some types …

Curriculum Vitae, Ronald R. Kumar

Ronald R Kumar

My updated CV

Idiosyncratic Risk And Development In Developing Countries, Minh Dao

Minh Dao

This paper examines the impact of idiosyncratic risk management on economic development in developing countries. Based on data from the World Bank, we use a sample of twenty-seven developing economies and find that selected indicators related to risk management at the household level do have a statistically significant effect on economic development in these countries. Regression results show that almost four-fifths of cross-developing country variations in purchasing power parity per capita gross national income can be explained by its linear dependency on the percentage of the population aged over 25 who have completed the tertiary level of education, education quality …

Subsidizing Non-Polluting Goods Vs. Taxing Polluting Goods For Pollution Reduction, Robert S. Main

Robert S. Main

Pigovian taxes on polluters are politically unpopular, but subsidies for non-polluting sources are politically attractive. This paper presents a linear demand and supply model and numerical example to explore the trade-offs between taxing polluting sources of a good versus subsidizing non-polluting sources of the same good. While the model (along with the associated numerical example) shows the optimality of Pigovian taxes, it also shows how much welfare is reduced if subsidies for nonpolluters are employed instead. Further, it shows the optimal tax, given any level of subsidy and the optimal subsidy, given any level of tax.

The Relationship Between Import Penetration And Operation Of The U.S. Textile And Apparel Industries From 2002 To 2008, Sheng Lu, Kitty Dickerson

Sheng Lu

The U.S. textile and apparel (T&A) industries have respectively adopted various restructuring strategies in recent years which fundamentally changed the way the two industries operate and the shifting relationship of each sector with imports. This study empirically tests the relationship between import penetration and the operation of the U.S. T&A industries based on data at 4-digit North American Industrial Classification System (NAICS) code level from 2002-2008. Results from the panel data model show that overall the U.S. textile industry formed a weak cooperative relationship with import penetration level in the U.S. market and a neutral relationship was suggested for the …

The United States-Korea Free Trade Agreement (Korus) And Its Impact On China’S Textile And Apparel Exports To The United States, Sheng Lu, Kitty Dickerson

Sheng Lu

This study is an empirical evaluation of the impact of the U.S.-Korea Free Trade Agreement (KORUS) on China’s textile and apparel (T&A) exports to the United States, with special focus on potential trade diversion effects of the agreement. On the basis of estimated export similarity index and trade elasticity of substitution values for T&A products of China and South Korea, trade diversion caused by the KORUS is predicted to most strongly affect China’s apparel exports (in HS Chapters 60-63). The KORUS may also affect China’s exports in other T&A categories (in HS Chapters 51, 52, 56, 57 and 59), but …

China Takes All? An Empirical Study On The Impacts Of Quota Elimination On World Clothing Trade From 2000 To 2009, Sheng Lu

Sheng Lu

Purpose – This study aims to empirically investigate the impacts of quota elimination on world clothing trade. Design/methodology/approach - Multivariate analysis of variance (MANOVA) was undertaken based on trade statistics of 51 clothing exporters from 2000 to 2009 provided by the World Trade Organization (WTO). Findings – First, exporters’ performances in response to quota elimination overall were suggested unequal among countries located in different geographic regions of the world. Second, clothing exporters located in different geographic regions were suggested having unequal results of compound annual growth rate from 2005 to 2009 and market share changes from 2000 to 2009. Third, …

Introduction To Special Issue: Globalisation And Economic Integration In East Asia, Paul De Grauwe, Zhaoyong Zhang

Zhaoyong Zhang

No abstract provided.

Use Of Foreign Intermediate Inputs In Developing Countries: Determinants And Effects (Short Note), Mohammad Amin, Asif Islam, Po Yin Wong

Mohammad Amin

Theory suggests a number of channels through which use of foreign inputs could contribute to overall economic development and firm performance. However, empirical work on the use of foreign inputs, its determinants and effects is lacking. Using firm-level data from Enterprise Surveys on developing countries, this note highlights the extent to which firms rely on foreign inputs, how the reliance varies with country and firm characteristics and the impact of foreign inputs on firm productivity. Results show that the use of foreign inputs is common among private firms and especially so among the relatively large firms and firms in countries …

The Child Health Implications Of Privatizing Africa's Urban Water Supply, Katrina Kosec

Katrina Kosec

On The Pro-Trade Effects Of Immigrants, Massimiliano Bratti, Luca De Benedictis, Gianluca Santoni

Luca De Benedictis

This paper investigates the causal effect of immigration on trade flows using Italian panel data at the province level. We exploit the exceptional characteristics of the Italian data (the fine geographical disaggregation, the very high number of countries of origin of immigrants, the high heterogeneity of social and economic characteristics of Italian provinces, and the absence of cultural or historical ties) coupled with the use of a wide set of fixed effects and an `instrument' based on immigrants' enclaves. We find that immigrants have a significant positive effect on both exports and imports, but much larger for the latter. The …

Evaluating Aid For Trade: A Survey Of Recent Studies, Olivier Cadot, Ana Fernandes, Julien Gourdon, Aaditya Mattoo, Jaime De Melo

Julien Gourdon

No abstract provided.

Chinese Privatization: Between Plan And Market, Lan Cao

Lan Cao

No abstract provided.

The Ethnic Question In Law And Development, Lan Cao

Lan Cao

No abstract provided.

The Gravity Of Experience, Pushan Dutt

Pushan Dutt

In this paper, we establish the importance of experience in international trade for reducing trade costs and facilitating bilateral trade. Within an augmented gravity framework, we find that an additional year of experience at the country-pair level reduces trade costs by 2.0% and increases bilateral exports by 8%. The effect of experience is stronger for country-pairs that are more distant, who do not share a common border, and who lack colonial and legal ties. Further, experience raises both the extensive and the intensive margins of trade. In a dynamic trade model with heterogeneous firms and where export-experience reduces trade costs, …

Monetary Integration And Optimum Currency Area In Asean+3: What We Need For A New Framework?, Reza Moosavi Mohseni Dr., Azali Mohammed Prof.

Reza Moosavi Mohseni

In this paper at first we investigate the viability of creating an optimum currency area (OCA) in the East Asia. The results of a ten-variable VAR model show that forming an OCA for all of the countries in the region is costly and difficult to sustain. But at first five countries called Japan, China, Korea, Malaysia, and the Philippine with symmetric supply shocks can create the OCA. The findings also show that both dollar and yen can be suitable anchor for these countries, but with the exception of Indonesia all other countries are better potential clients of dollar. The final …

Should Smaller Countries Be More Protectionist? The Diversification Motive For Tariffs, James Gaisford, Olena Ivus

Olena Ivus

This paper examines the diversification motive for tariffs under trade-related uncertainty when there is incomplete international and domestic risk sharing. In the context of a two-country Ricardian continuum-of-sectors model with shocks to foreign technologies or preferences, tariffs allow a country to mitigate external risk by diversifying across sectors. Given sufficiently high risk and risk aversion, the optimality of tariffs depends primarily on a country's ability to diversify, rather than its market power, such that small countries gain most.

Implementing A Real Sdr Currency Board, Warren Coats

Warren Coats

The enormous utility of money is a function of how widely it can be used for pricing and paying for the things we buy and sell and how stable or at least predictable is its value over time. The United States dollar became and remains the world’s common currency for global trade because of the relative size of the American economy, the relative stability of the purchasing power of the dollar, and the extensive development and liquidity of dollar financial instruments. Its use is now well entrenched. As pointed out by Richard Cooper: “It would take both a major shock …

That Is The Story Of A Hurricane: Within Country Impacts Of Extreme Weather Events, Martino Pelli, Jeanne Tschopp

Martino Pelli

In this paper, we consider the within-country, across-product impacts of hurricanes on export growth. While hurricanes are thought to exert large costs in terms of development on countries who bare the brunt of such events, there is little consensus on the literature to back up these claims. We argue that one reason for this is that the existing literature fails to take into account the potential for hurricanes to have differential impacts across products (or industries). We show that one important source of heterogeneity is a country’s comparative advantage and demonstrate, using a triple-difference identification strategy, that product lines with …

Export, R&D And New Products. A Model And A Test On European Industries, Dario Guarascio, Mario Pianta, Francesco Bogliacino

Mario Pianta

In this article we extend the model developed by Bogliacino and Pianta (2013a, 2013b) on the link between R&D, innovation and economic performance, considering the impact of innovation of export success. We develop a simultaneous three equation model in order to investigate the existence of a ‘virtuous circle’ between industries’ R&D, share of product innovators and export market shares. We investigate empirically – at the industry level – three key relationships affecting the dynamics of innovation and export performance: first, the capacity of firms to translate their R&D efforts in new products; second, the role of innovation as a determinant …