nep-int New Economics Papers
on International Trade
Issue of 2016‒08‒21
23 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Intra-good trade in Germany: A first look at the evidence By Wagner, Joachim
  2. US Policy Spillover(?) - China's Accession to the WTO and Rising Exports to the EU By Karsten Mau
  3. Let's Try Next Door: Technical Barriers to Trade and Multi-destination Firms By Lionel Fontagné; Gianluca Orefice
  4. The Lumpiness of German Exports and Imports of Goods By Joachim Wagner
  5. International Technology Diffusion via Goods Trade: Theory and Evidence from China By Eugene Beaulieu; Shan Wan
  6. Transfers in the gravity equation: The case of foreign aid By Kruse, Hendrik W.; Martínez-Zarzoso, Inma
  7. Product Mix and Firm Productivity Responses to Trade Competition By Thierry Mayer; Marc Melitz; Gianmarco Ottaviano
  8. Types of FDI and determinants of affiliate size: the classification makes the difference By Hecht, Veronika; Moritz, Michael; Noska, Patricia; Schäffler, Johannes
  9. Implicancias del DR-CAFTA sobre el comercio intraindustrial de la República Dominicana By Calvo Clúa, Rosalia; Cruz-Rodríguez, Alexis
  10. Origin and Destination Sectors of Indirect Domestic Value Added Embodied in Mexico's Manufacturing Exports By Fujii-Gambero, Gerardo; Cervantes-Martínez, Rosario
  11. India's Rise: A Strategy for Trade-Led Growth By C. Fred Bergsten
  12. Understanding trade in digitized ideas: What are the statistical challenges? By Magdeleine, Joscelyn; Maurer, Andreas
  13. Exporting and Workforce Skills-Intensity in the Egyptian Manufacturing Firms: Empirical Evidence Using World Bank Firm-Level Data for Egypt By Ahmed Fayez Abdelgouad
  14. Competing Gains From Trade By Clemens Struck; Adnan Velic
  15. Impact Analysis of Normalized Revealed Comparative Advantageon ASEAN’s Non-Oil and Gas Export Pattern Using Gravity-Model Approach By Umar Fachrudin; Fithra Faisal Hastiadi
  16. Trade Patterns and Endogenous Institutions: Global Evidence By Richard Frensch; Roman Horváth; Stephan Huber
  17. The Efficiency Cost of Protective Measures in Climate Policy By Christoph Böhringer; Xaquin Garcia-Muros; Ignacio Cazcarro; Iñaki Arto
  18. Trade costs shocks and lumpiness of imports: Evidence from the Fukushima disaster By Wagner, Joachim
  19. The US-EU Privacy Shield Pact: A Work in Progress By Gary Clyde Hufbauer; Euijin Jung
  20. The Cyclicality of the Income Elasticity of Trade By Borin, Alessandro; Di Nino, Virginia; Mancini, Michele; Sbracia, Massimo
  21. On the Geography of Global Value Chains By Pol Antràs; Alonso de Gortari
  22. Two-way migration between similiar countries By Kreickemeier, Udo; Wrona, Jens
  23. Globalisation and national trends in nutrition and health - a grouped fixed effects approach to inter-country heterogeneity By Oberländer, L.; Disdier, A-C.; Etilé, F.

  1. By: Wagner, Joachim
    Abstract: This paper contributes to the literature by using newly released comprehensive transaction level data on all exports and imports to document facts about the amount of intra-good trade – the simultaneous export and import of identical goods by one firm - in Germany. Combined data for trade transactions and for characteristics of a representative large sample of trading firms are then used to report differences between firms that export and import different goods only (inter-good traders) and firms that engage in the simultaneous export and import of identical goods (intra-good traders). We find that the share of intra-good trade in total trade was some 17 percent in Germany in 2012. Intra-good trade matters. This share differs widely between broadly defined groups of goods and between industries. Controlling for detailed industry affiliation intra-good traders differ significantly from inter-good traders – they are larger, more human capital intensive, more productive, have a higher R&D intensity, and are more profitable. The data, however, are not rich enough to reveal the direction of causality between intra-good trade and firm performance and to investigate empirically the reasons why some firms engage in intra-good trade.
    Keywords: Intra-product trade, two-way trade, imports, exports, Germany
    JEL: F14
    Date: 2016–08–05
  2. By: Karsten Mau (Leuphana University Lueneburg, Germany)
    Abstract: The paper offers a novel explanation for China’s manufacturing exports performance after WTO entry. Building on stylized facts about low-wage country exporters, a theoretical model is developed to analyze reduced trade policy uncertainty. A global (non-destination specific) component of exporting fixed costs facilitates transmission of bilateral policy changes to multilateral export performance. The empirical analysis exploits the removal of US tariff uncertainty in conjunction with China’s WTO accession, and examines its effect on China’s exports to the EU. The results reveal that: (i) the structure of China’s export boom to the EU conforms to the pattern of US tariff uncertainty; (ii) the adjustment takes place at the extensive margin; and (iii) the effect phases out after a few years. These findings have implications for the scope of international policy negotiations and provide suggestive evidence on the nature of fixed costs manufacturing firms in low-wage countries must overcome.
    Keywords: Exports, China, WTO, Policy Uncertainty, Fixed Costs, Spillover
    JEL: F13 F14 D84 O24
    Date: 2015–12
  3. By: Lionel Fontagné; Gianluca Orefice
    Abstract: Stringent Technical Barriers to Trade (TBT) are expected to drive exporters out of the markets imposing these hurdles. However their impact will vary, with some exporters being able to refocus on TBT-free markets. By matching a database of TBT measures raised as concerns at the WTO (Specific Trade Concerns -- STCs), with a firm-level panel of French exporters, we show the complex effects of restrictive TBT measures on the different margins of trade. We show that the negative effect of TBT on export participation is magnified for multi-destination firms, which can divert their exports towards TBT-free destinations. Moreover, we conduct aggregate level estimations to show that the effect of stringent TBTs in reducing export flows is magnified in more homogeneous sectors. Observing the shape of the firm distribution at sectoral level and the aggregate elasticity of export to trade cost, we shed light on the fixed component of the additional cost imposed by TBTs on exporters.
    Keywords: Non-tariff measures;TBT;Multi-destination Firms;Trade Margins
    JEL: F13 F14
    Date: 2016–07
  4. By: Joachim Wagner (Leuphana University Lueneburg, Germany)
    Abstract: This paper looks at a hitherto neglected extensive margin of international trade by investigating for the first time the frequency at which German exporters and importers trade a given good with a given country. Imports and exports show a high degree of lumpiness. In a given year about half of all firm-good-country combinations are recorded only once or twice for trade with EU-countries, and this is the case for more than 60 percent of all firm-goodcountry combinations in trade with non-EU countries. The frequency of recorded transactions tends to decline with an increase in the number of transactions per year. This is in accordance with the presence of per-shipment fixed costs that provide an incentive for trading firms to engage in cross-border transactions infrequently. Empirical models show that for Germany the frequency of transactions at the firm-good-country level tends to decrease with an increase in per-shipment costs when unobserved firm and goods characteristics are controlled for.
    Keywords: Lumpiness of trade, imports, exports, Germany
    JEL: F14
    Date: 2016–04
  5. By: Eugene Beaulieu (University of Calgary); Shan Wan (University of Calgary)
    Abstract: This paper develops a multi-product firm model of international trade with the endoge- nous decisions on export and import to study technology diffusion via goods trade. In our model, a firm’s productivity in a product is a combination of its general ability which applies to all the goods the firm produces and product expertise which applies only to a particular good. Within each firm, the decisions of export and import are based on product expertise. Technology diffuses via goods trade, therefore a firm can improve its productivity by reverse-engineering the imported advanced foreign prod- ucts. We use Chinese trade data to empirically analyze our theory. The results show that a firm will import the product in the category where it already has higher expertise, which is consistent with the theoretical prediction. We find that a firm’s productivity in a category gets improved when it imports in the same category, but only product expertise gets accumulated, not the firm ability.
    Date: 2016–08–12
  6. By: Kruse, Hendrik W.; Martínez-Zarzoso, Inma
    Abstract: This paper presents a theoretical gravity model of trade in which foreign aid is considered as a transfer instead of being part of the trade cost, as it has been previously done in the related literature. We argue that the usual specification leads to invalid out-of-sample predictions, biased coefficients and moreover it ignores heterogeneity. The proposed model is estimated for a sample of 188 countries over the period 1988-2013 using panel fixed effects and PPML techniques and the resulting trade elasticities with respect to aid are compared with those obtained from the traditional specification. The main results show that average effect of one additional US $ of aid is around 0.56$ of total imports according to our model, whereas with the alternative model an average effect of an implausible amount of 11$ of imports is obtained. In addition, a decomposed version of the model provides a new framework to disentangle the political effects of aid from the budget effects. While we consider the case of foreign aid, the modeling framework also applies to the study of other transfer, as for example remittances.
    Keywords: international trade,development,foreign aid,gravity
    JEL: F14 F35
    Date: 2016
  7. By: Thierry Mayer; Marc Melitz; Gianmarco Ottaviano
    Abstract: We document how demand shocks in export markets lead French multi-product exporters to re-allocate the mix of products sold in those destinations. In response to positive demand shocks, those French firms skew their export sales towards their best performing products; and also extend the range of products sold to that market. We develop a theoretical model of multi-product firms and derive the specific demand and cost conditions needed to generate these product-mix reallocations. Our theoretical model highlights how the increased competition from demand shocks in export markets-and the induced product mix reallocations-induce productivity changes within the firm. We then empirically test for this connection between the demand shocks and the productivity of multi-product firms exporting to those destinations. We find that the effect of those demand shocks on productivity are substantial-and explain an important share of aggregate productivity fluctuations for French manufacturing.
    Keywords: Multiproduct Firms;Productivity;Trade
    JEL: F1
    Date: 2016–07
  8. By: Hecht, Veronika (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Moritz, Michael (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Noska, Patricia; Schäffler, Johannes (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "This paper deals with the measurement of motives for foreign direct investment (FDI). Due to a lack of information, several indirect measures exist in order to classify multinational firms into the two main types of FDI. While vertical foreign direct investment (VFDI) refers to the international fragmentation of the production process for cost-saving reasons, horizontal foreign direct investment (HFDI) is performed in order to gain access to new markets. One common approach to identify the dominant reason for firms to go abroad is to compare the industry affiliation of the investing company in the home country and the subsidiary in the target country. The question arises as to how reliable this measure is for identifying FDI motives. The IAB-ReLOC survey allows a profound investigation on the issue of classifying the motives of the firms for going abroad into vertical and horizontal FDI. Apart from industry affiliation data applied in conventional approaches to categorize FDI types, the survey data also includes a self-assessment of the firms with respect to the main motive for investing in the neighboring country, and information on intra-firm trade concerning the flow of intermediate inputs between the German headquarters and the Czech affiliates. Against the background of featuring a well-grounded database, we shed a light on the relevance of productivity in the German-Czech FDI relations. We pursue a reference group approach by comparing German multinational firms that have an affiliate in the Czech Republic to German companies without direct investment abroad. The data provided by the German multinationals enables us to investigate the size of FDI under the aspect of the number of employees in their Czech affiliates. By applying a two-step Heckman procedure, we control for sample selection bias: in the first stage we analyze the extensive margin of FDI, i.e. the probability to select into the group of multinational investors. The second stage examines the relationship between productivity and the intensive margin of FDI. We find evidence that productivity is not only a crucial factor for the decision to invest in the neighboring country, but plays also a relevant role for the number of employees in the Czech subsidiary. Differences are revealed between direct and indirect measures of FDI types. The size of horizontal investments is significantly affected by productivity only in the case of classifications that are based on survey responses. This result confirms theoretical expectations and previous empirical literature by standing in marked contrast to the outcome for indirect measurement concepts. Our finding leads us to the conclusion that one should be more cautious in interpreting differences between vertical and horizontal FDI when using approximative classification concepts." (Author's abstract, IAB-Doku) ((en))
    JEL: F23 J21 R12
    Date: 2016–08–15
  9. By: Calvo Clúa, Rosalia; Cruz-Rodríguez, Alexis
    Abstract: There are numerous analysts, businessmen and other economic agents who question the effects of free trade agreements on the economy of its member countries. After nearly eight years of the entry into force of the free trade agreement between the United States, the Dominican Republic and Central America (DR-CAFTA), its effects are not yet fully conclusive and this is due, mainly, because the difficulty of isolating on the international stage the determinants of the evolution of trade and productive structures of the economies in general and, in particular, of the Dominican Republic. IIT analysis is an approach to the study of these effects. IIT indicators, between the Dominican Republic and members of DR-CAFTA, used show that during the period 2007-2013 such trade is mainly relevant in bilateral trade with the United States, and specifically in the areas belonging to the regime free zones, grouped as industrial manufacturing.
    Keywords: Intra-industry trade, free trade agreements
    JEL: F14 F15
    Date: 2016–08–10
  10. By: Fujii-Gambero, Gerardo; Cervantes-Martínez, Rosario
    Abstract: As domestic exports usually require imported inputs, the value of exports differs from the domestic value added contained in exports. The higher the domestic value added contained in exports, the higher domestic national income created by exports will be. In this case, exports will expand the domestic market. Therefore, exports will stimulate economic growth in two ways: through their direct effect on aggregate demand and through their effect on the domestic market. For these reasons, the estimate of the magnitude of the domestic value added contained in exports helps explain the capacity of exports to lead economic growth. Domestic exports may be classified in direct and indirect exports. Direct exports are the goods sold to other countries, and indirect exports are the domestically produced inputs incorporated in direct exports. The distinction between direct and indirect exports leads to the distinction between direct and indirect domestic value added contained in exports. Direct value added consists of incomes paid to the production factors directly involved in exports, while indirect value added equals the income contained in domestically produced inputs incorporated into exports. Therefore, the magnitude of indirect value added depends on the density of the domestic inter-sectoral linkages. The purpose of this paper is to present an estimation of domestic indirect value added contained in Mexico’s manufacturing exports in two ways. The first one derives from the fact that a direct exporting sector may be the vehicle through which other sectors may export in an indirect way. This leads us to estimate the indirect value added contained in exports by sector of origin. The second way refers to the sectors of destination of this indirect value added, that is, the direct exporting sectors in which the value added contained in indirect exports of each sectors appears. Calculations are based on a 2003 input-output matrix for Mexico (INEGI, 2008). Results for the maquiladora-industry exports are shown separately from the rest of manufacturing. In order to distinguish the indirect value added in exports by sector of origin and destination of intermediate inputs, we work with square matrixes of indirect domestic value added multipliers.
    Keywords: Domestic Value Added, Indirect Value Added, Global Value Chains, Trade in Value Added, Internationalization of Production
    JEL: C67 F14 F15 F6 L6
    Date: 2015
  11. By: C. Fred Bergsten (Peterson Institute for International Economics)
    Abstract: A new study by C. Fred Bergsten shows that India could increase its exports by $500 billion per year by joining the next stage of the Trans-Pacific Partnership (TPP) trade agreement. Bergsten argues trade liberalization would enable India to increase its annual economic growth to 8 to 10 percent, as targeted by the government of Prime Minister Narendra Modi. Millions of new jobs would be created as a result, and poverty would be substantially further reduced. By contrast, India will lose as much as $50 billion of current exports because of increasing discrimination against it by other countries if it remains outside the new global trade network. This network includes the plurilateral agreements on international services, environmental goods, and government procurement now being negotiated in and around the World Trade Organization as well as the TPP and other megaregional arrangements. To be accepted into these agreements, India will have to implement the economic reform program proposed by the Modi government. It will also have to liberalize its own markets to international trade and investment in order to persuade other countries to open their markets to its exports. To join the TPP, or a Free Trade Area of the Asia Pacific as proposed by China that might succeed it, India will probably first have to join the Asia Pacific Economic Cooperation (APEC) forum within the next couple of years. President Barack Obama has welcomed India's interest in APEC and, if India adopts the needed policy changes, should strongly support Indian membership.
    Date: 2015–09
  12. By: Magdeleine, Joscelyn; Maurer, Andreas
    Abstract: Advances in information and communications technologies (ICTs) and new business models have widened opportunities for trade in digitized ideas, shaping global value chains and production networks in cultural or creative goods and services. However, much of this trade has eluded conventional categorization and new business models. In particular multinational firms have blurred the way international transactions can be recorded and how this can be transformed into relevant statistics for policy makers, research and for businesses themselves. Recent international statistical guidelines have suggested a number of improvements to better respond to policy information needs, including in the area of trade, innovation or culture. However, a number of questions remain unanswered. The objective of the paper is therefore to trace the conceptual and empirical statistical picture and assess the quality of existing statistics and the extent to which important trade in digitized ideas is inadequately measured. It discusses conceptual issues, and constraints encountered in gaining a full picture. A number of possible data collection and compilation solutions are suggested to enable a better understanding of this trade.
    Keywords: Trade,International,Ideas,Culture,Statistics,Digitization
    JEL: C82 F14 F23 L23 L81 L82 L86 Z1
    Date: 2016
  13. By: Ahmed Fayez Abdelgouad (Leuphana University Lueneburg, Germany)
    Abstract: The World Bank’s Enterprise Surveys (WES( for the manufacturing firms in Egypt are used to study the characteristics of exporting firms and the determinants of the exporting behavior in the Egyptian manufacturing sector in general and to investigate the link between the exporting activities and the workforce skills-intensity in the Egyptian manufacturing sector in specific. Several methods to estimate the probability and intensity of exporting are presented. The main findings indicate that firms in the manufacturing sector in Egypt which their workforce are characterized by higher levels of skills-intensity are more likely to export compared to other firms with lower levels of skills-intensity. Firms that hire female workers are more likely to export than other firms which do not employ women. Furthermore, firms that are larger in their size, have R&D departments, and owned by foreigners are more likely to export than others and have statistically significant effects on export intensity as well. The results suggest also that firms that are larger in their size are more likely to start to export than others.
    Keywords: Exporting, Workforce skills, World Bank Enterprise Surveys, Egypt, Manufacturing
    JEL: J24 F14 F16
    Date: 2016–04
  14. By: Clemens Struck (Trinity College Dublin); Adnan Velic (Dublin Institute of Technology)
    Abstract: Differences in growth rates across countries imply a strong relation between factor-proportions-based trade and key aggregate economic outcomes. We construct two macro-trade datasets and illustrate that this relation is rather weak empirically. Employing a dynamic two-country model, we propose a simple explanation for this finding. By limiting the substitutability between domestic and foreign tradable varieties, the presence of intra-industry trade implies that pronounced trade specialization patterns culminate in a loss of varieties. Accordingly, intra-industry trade acts to suppress inter-industry trade dynamics, thus realigning the behavior of standard models with the empirical evidence.
    Keywords: factor-proportions-based trade, inter- and intra-industry trade dynamics, comparative advantage, dynamic two-country general equilibrium models, Feldstein-Horioka
    JEL: F11 F12 F32 F41 F43
    Date: 2016–08
  15. By: Umar Fachrudin (Center for Foreign Trade Policy, Ministry of Trade, Republic of Indonesia); Fithra Faisal Hastiadi (Department of Economics, Faculty of Economics and Business, Universitas Indonesia, Depok, 16424, Indonesia)
    Abstract: The development of global economic challenges hasforced ASEAN countries to further deepen its economic integration within the ASEAN Economic Cooperation (AEC) and to incorporate several ASEAN Plus agreements into Regional Comprehensive Economic Partnership (RCEP). Under thiscircumstance, the ASEAN members need to distinguish how the difference in comparative advantage of each export commodity affects and influences the pattern of ASEAN’s non-oil exports. This study attempts to identify the impact of comparative advantage, represented by Normalized Revealed Comparative Advantage (NRCA) index, on the non-oil export pattern of the ASEAN countries using the augmented gravity model as its research method. The results indicate that comparative advantage has a positive influence on ASEAN’s non-oil exports and that the comparative advantages in agricultural commodities have the biggest influence.
    Keywords: seaport status, distance, regional economic development, seaport access, Indonesia
    Date: 2016–05
  16. By: Richard Frensch (IOS Regensburg); Roman Horváth; Stephan Huber
    Abstract: We proposeanovel way to measure the rule of law intensity of exports at the goods level based on nearly 100 million disaggregated bilateral trade flows around the globe. We categorise goods into three groups: fragmented, primary and other. The theoretical literature on hold-up problems connected to incomplete or incompletely enforceable contracts or property rights predicts that goods resulting from fragmented production processes should be the most rule of law intensive. However, we find that the rule of law intensity of other goods is, on average, only slightly lower than that of fragmented goods. We examine how exogenous variation in countries’ trade patterns influences the quality of institutions. Our regressions show that trade flows generated by fragmented and other processes of production improve rule of law, while trade flows generated by primary production do not.
    Keywords: trade patterns, rule of law
    JEL: C83 D91 E21
    Date: 2016–07
  17. By: Christoph Böhringer (University of Oldenburg, Department of Economics); Xaquin Garcia-Muros (Basque Centre for Climate Change (BC3), Bilbao, Spain); Ignacio Cazcarro (Basque Centre for Climate Change (BC3), Bilbao, Spain); Iñaki Arto (Basque Centre for Climate Change (BC3), Bilbao, Spain)
    Abstract: Despite recent achievements towards a global climate agreement, climate action to reduce greenhouse gas emissions remains quite heterogeneous across countries. Energy-intensive and trade-exposed (EITE) industries in industrialized countries are particularly concerned on stringent domestic emission pricing that may put them at a competitive disadvantage with respect to producers of similar goods in other countries without or only quite lenient emission regulation. This paper focuses on climate policy analysis for the United States of America (US) and compares the economic implications of four alternative protective measures for US EITE industries: (i) output-based rebates, (ii) exemptions from emission pricing, (iii) energy intensity standards, and (iv) carbon intensity standards. Based on simulations with a large-scale computable general equilibrium model for the global economy we quantify how these protective measures affect competitiveness of US EITE industries. We find that while protective measures can attenuate adverse competitiveness impacts measured in terms of common sector-specific competitiveness indicators, they run the risk of making US emission reduction much more costly than uniform emission pricing stand-alone. In fact, the cost increase is associated with negative income effects such that the gains of protective measures for EITE exports may be more than compensated through losses in domestic EITE demand.
    Keywords: Unilateral climate policy; competitiveness; computable general equilibrium
    JEL: D21 H23 D58
    Date: 2016–08
  18. By: Wagner, Joachim
    Abstract: This paper uses a difference-in-differences approach to test the hypothesis that the increase in the per-shipment costs of imports from Japan due to the Fukushima disaster in 2011 lead to an increase in the lumpiness of imports from Japan. Using China and the USA as control groups it is found that the Fukushima trade cost shock reduced the average number of import transactions per year at the firm-good level and, therefore, increased the degree of lumpiness of imports from Japan.
    Keywords: Fukushima disaster, trade shock, imports, Germany
    JEL: F14
    Date: 2016–05–17
  19. By: Gary Clyde Hufbauer (Peterson Institute for International Economics); Euijin Jung (Peterson Institute for International Economics)
    Abstract: The modern global economy is fueled by consumers, companies, and governments communicating and exchanging information via the internet. But as people around the world engage in e-commerce, seek jobs, and share intimate details about their lives via social media, concerns arise over the vast stores of personal data possessed by multinational companies—and the risk that information transmitted over cyber networks can become readily available to US intelligence and law enforcement agencies. To allay these concerns, the United States and the European Union signed the Privacy Shield Pact on July 12, 2016, aimed at protecting individual privacy while meeting the legitimate needs of companies and the government. This Policy Brief elucidates the elements of that pact, a revision of earlier agreements covering the same issues. It argues that the pact reflects a reasonable compromise between legitimate competing interests but that as commerce expands, as concerns about invasions of privacy grow, and as the United States faces increasing threats from terrorists, criminals, and hackers in the cyber world, some of its provisions may need to be adjusted, especially if new international agreements are reached on trade, investment, and e-commerce.
    Date: 2016–08
  20. By: Borin, Alessandro; Di Nino, Virginia; Mancini, Michele; Sbracia, Massimo
    Abstract: In 2011-2015 global trade volumes have systematically surprised on the downside, to a much larger extent than real GDP. We show that two key features of real trade flows --- their high volatility and their procyclicality --- determine a cyclicality of the income elasticity of trade. This property is such that when real GDP growth is positive but lower than its long-run trend, then the income elasticity of trade is also smaller than its own long-run trend. As a consequence, when real GDP growth turns out to be weaker than expected, the forecast error on trade volumes is amplified by the fact that also the income elasticity of trade happens to be smaller than predicted. Our analysis shows, in particular, that long-run and cyclical forces have contributed to a similar extent to the recent weakness of trade volumes. As a by-product, we also explain how the high volatility and procyclicality of real trade flows, together with the size of the non-tradeable-goods sector, contribute to determine cross-country differences in the income elasticity of trade.
    Keywords: global trade; income elasticity; international business cycle
    JEL: E32 F1 F4
    Date: 2016–08–08
  21. By: Pol Antràs; Alonso de Gortari
    Date: 2016–01
  22. By: Kreickemeier, Udo; Wrona, Jens
    Abstract: We develop a model to explain two-way migration of high-skilled individuals between countries that are similar in their economic characteristics. High-skilled migration results from the combination of workers whose abilities are private knowledge, and a production technology that gives incentives to firms for hiring workers of similar ability. In the presence of migration cost, high-skilled workers self-select into the group of migrants. The laissez-faire equilibrium features too much migration, explained by a negative migration externality. We also show that for sufficiently low levels of migration cost the optimal level of migration, while smaller than in the laissez-faire equilibrium, is strictly positive. Finally, we extend our model into different directions to capture stylized facts in the data and show that our baseline results also hold in these more complex modelling environments.
    Keywords: International Migration,Skilled Workers,Positive Assortative Matching
    JEL: D82 F22
    Date: 2015
  23. By: Oberländer, L.; Disdier, A-C.; Etilé, F.
    Abstract: This paper estimates the effect of globalisation on nutritional composition of the diet and health outcomes using a panel dataset of 70 countries spanning 42 years (1970-2011). Our key methodological contribution is the application of the grouped fixed effects estimator developed by Bonhomme and Manresa (2015), which enables us to better control for unobserved time-varying heterogeneity. Our results indicate that a one standard deviation increase in the index of social globalisation is associated with an increase in the share of animal protein of about 12%. In contrast, economic globalisation has no effect on the composition of the diet. Moreover, we do not find significant effects on diabetes prevalence or mean Body Mass Index. Our findings indicate that social aspects of globalisation, such as food advertising, deserve greater attention in the nutrition transition discourse.
    Keywords: nutrition transition; globalisation; overweight; grouped fixed effects;
    Date: 2016–08

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