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on International Trade |
| By: | Balistreri, Edward J.; Olekseyuk, Zoryana; Tarr, David G. |
| Abstract: | The accession negotiations of Belarus to the WTO are unusual since, due to its obligations in the Eurasian Economic Union, WTO accession is not expected to impact its tariffs or formerly substantial trade distorting agricultural subsidies. Nonetheless, we estimate that WTO accession will increase welfare by 8.8 percent per year in Belarus in the medium term. We show that inclusion of (i) foreign direct investment; (ii) reduction on non-discriminatory barriers against services providers; and (iii) our model with imperfect competition and endogenous productivity effects together produce esti-mated gains eleven times larger than a model of perfect competition with only cross-border trade in services. Our analysis is enabled by our production of a dataset on both discriminatory and non-discriminatory barriers in services and their ad valorem equivalents. Based on a new dataset on labor productivity by sector and type of ownership, in our central model we estimate that privatization will increase welfare by 35.4 percent. We find substantial variance in the estimated gains from privatiza-tion depending on model assumptions; but all the estimates of the impacts of privatization indicate substantial welfare gains. |
| JEL: | D02 D58 F13 F14 L16 C68 |
| Date: | 2017–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2017_002&r=int |
| By: | Latorre, María C.; Yonezawa, Hidemichi |
| Abstract: | The Transatlantic Trade and Investment Partnership (TTIP) seems to be a doomed half-negotiated trade deal with Donald Trump in power. If it were definitely abandoned, the effects of what could have been the largest trade agreement in history would disappear. In this paper we analyze its potential impact on the world and on insiders and outsiders of the agreement using a Computable General Equilibrium (CGE) model. In our simulation, TTIP consists of reductions of tariffs, non-tariff barriers and a previously neglected component, namely, barriers to Foreign Direct Investment (FDI). The impact of the FDI component would be larger for the US than for the EU. In the US, it would contribute to nearly half of the overall impact of TTIP, while in the EU it would be nearly one third. Insiders would heavily benefit from TTIP but the effects could potentially be very slightly negative for outsiders (Middle East, Sub-Saharan Africa, Latin America, Southeast Asia and Other Advanced Countries), with the exception of the big Asian economies (China, Japan and India). The latter would remain unaffected. However, all the slightly potential negative effects would turn into positive with an “inclusive TTIP” (i.e., one avoiding third country discriminating rules and standards). An inclusive TTIP would benefit both insiders, who would gain more, and outsiders, who would be better off than without the TTIP. Welfare, GDP, wages, as well as aggregate imports and exports of the world economy would clearly increase following either a shallow or a deep TTIP agreement. |
| Keywords: | Foreign Direct Investment, multinationals, trade agreements, Computable General Equilibrium, CGE, monopolistic competition. |
| JEL: | C68 F14 F15 F17 F21 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:77162&r=int |
| By: | Julian Hinz; Elsa Leromain (Paris School of Economics and University of Paris 1-Sorbonne.) |
| Abstract: | The proliferation of global value chains makes the domestic production of goods increasingly dependent on inputs from foreign sources. Political tensions between countries have an impact on trade costs as they affect the international enforceability of contracts or result in impediments from authorities in the shipment or production process. By expanding their portfolio of foreign suppliers, firms and by extension entire economies are thus increasingly prone to the trade effects of adverse bilateral political shocks. In this paper, we aim to reassess the role of political relations on trade flows in light of these new developments and propose a new channel. We hypothesize that political relations matter more for imports of strategic inputs. Strategic inputs refer to inputs that a country uses intensively in its production process. We construct a simple model exhibiting input-output linkages to clarify the mechanisms at play. Using a new measure for countries’ dependence on these strategic inputs, we then test the proposed mechanism empirically by interacting the measure with an indicator of political relations in a structural gravity model. To address potential endogeneity issues we then perform an event study, in which the treatment is an exogenous adverse political shock. Using a new dataset on the status of diplomatic representation and monthly trade data, we exploit the recalling or summoning of the ambassador of a country as a shock to bilateral political relations. Results from both analyses confirm an economically and statistically significant effect that varies conditionaly on the dependence of the country on the imported input. |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1026&r=int |
| By: | Lota Dabio Tamini; Sorgho Zakaria |
| Abstract: | Negotiations on the liberalization of environmental goods (EGs) and services within the WTO Doha Round (mandated in November 2001) are facing specific challenges. Conflicting interests and differing perceptions of the benefits of increased trade in EGs were reflected in different approaches proposed for determining EGs. Using import data of 34 OECD member countries and from a sample of 167 countries, from 1995 to 2012, we discuss the trade effect of reducing barriers on EGs. We analyze the lists of EGs proposed by the Asia-Pacific Economic Cooperation (APEC) and the Organisation for Economic Co-operation and Development (OECD) using a Translog gravity model. We found that removing tariff barriers for EGs will have a modest impact because for the biggest importers and exporters, elasticities of trade costs are very low while for most trading relationships they are very high, making it difficult for exporters to maintain their markets. Overall, our results suggest that, because of their substantial effect on international trade, future negotiations on EGs should also address the issues of standards and nontariff barriers (NTBs). |
| Keywords: | Environmental Goods, Translog, Gravity, Trade costs elasticity, Import share |
| JEL: | F11 F12 F15 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:creacr:2016-3&r=int |
| By: | Abdessalem Abassi; Lota Dabio Tamini |
| Abstract: | The objective of this paper is to analyze trade potential versus actual realized trade among North African trading partners. Following the literature on production economics, we built a stochastic frontier gravity model. The underlying assumption is that all deviation from trade potential is not due to white noise but could also be due to inefficiencies. Time-variant country-specific trade efficiency estimates are obtained and analyzed. Our results indicate that Mauritania as a country of destination and of origin is where the trading relationship is the least efficient. Conversely, Tunisia, followed by Morocco, faces the fewest ÒbehindÓ and ÒbeyondÓ the border effects. Our analysis of market integration and trade efficiency at the disaggregated level indicates that trade efficiency scores exhibit high variability between the categories of products. Moreover, North African market integration is worst when considering the goods from the category ÒTextiles; Footwear & HeadgearÓ. Our estimates indicate that trade efficiency for agricultural products is relatively low indicating the existence of significant ÒbehindÓ and ÒbeyondÓ border inefficiencies. Our estimates also point at the presence of poor and counterproductive regulatory environment and underline the importance of improving domestic policies to encourage entrepreneurial development and business facilities. Our findings confirm the need for the North African countries to improve their trade logistics at the national level to enhance trade efficiency and to implement trade facilitation reform programs. |
| Keywords: | Trade integration; Industrial products; Agricultural products; Stochastic frontier analysis; Gravity model; North Africa. |
| JEL: | F14 F15 O10 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:creacr:2016-4&r=int |
| By: | Dincer, N. Nergiz; Tekin-Koru, Ayca |
| Abstract: | This paper focuses on gains from trade due to rising within-firm productivity in presence of services exporting. The complementarity between exporting and investing in productivity enhancements is investigated by using descriptive regressions using rich, firm-level data for the period 2003-2011 for Turkey. The authors use three productivity measures for robustness purposes. The results show that firms that export both goods and services throughout the sample have higher productivity compared to all other firms in the sample. Another important result of the paper is related to the firms that switch from being goods exporters to goods and services exporters, which exhibit higher productivity than firms that export only goods or firms that switch from services exporting to exporting both goods and services. Finally, within-firm gains from trade as measured by the productivity growth of firms is insensitive to the services exporting status. More importantly, the authors observe no effect of any of export status of firms considered in this paper on their productivity growth. |
| Keywords: | services trade,productivity,exporting status |
| JEL: | F10 F14 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:20177&r=int |
| By: | Chiquiar Daniel, Covarrubias Enrique, Salcedo Alejandrina |
| Abstract: | We analyze the labor market consequences of international trade, using the evidence provided by the behavior of Mexican labor markets after the introduction of NAFTA in the nineties and the accession of China to the WTO in 2001. Following an approach close to that proposed by Autor, Dorn and Hanson (2013), we use the local market variation on exposure to international markets to identify the effects of these events. We show that NAFTA integration reduced unemployment, and boosted employment and wages. Chinese competition tended to have the opposite effect. Additionally, we find that the labor market responses to international trade are heterogeneous across regions in the country, being significantly stronger in the regions closer to the U.S. border. |
| Keywords: | International trade and labor markets, local labor markets, Mexico;NAFTA;Chinese competition |
| JEL: | E24 F14 F16 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdm:wpaper:2017-01&r=int |
| By: | Lionel Fontagné; Philippe Martin; Gianluca Orefice |
| Abstract: | We estimate three international price elasticities using exporters data: the elasticity of firm exports to export price, tariff and real exchange rate shocks. In standard trade and international macroeconomics models these three elasticities should be equal. We find that this is far from being the case. We use French firm level electricity costs to instrument for export prices and provide a first estimate of the elasticity of firm-level exports to export prices. The elasticity of exports is highest, around 5, for export prices followed by tariffs, around 2, and is lowest for the real exchange rate, around 0.6. The large discrepancy between these elasticities makes us conclude that the international elasticity puzzle is actually worse than previously thought. Moreover, we show that because exporters absorb part of tariffs and exchange rate movements, estimates of export elasticities that do not take into account export prices are biased. |
| Keywords: | Elasticity;International Trade and Macroeconomics;Export Price;Firm exports |
| JEL: | F14 F18 Q56 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2017-03&r=int |
| By: | Sean Dougherty (OECD); Julien Reynaud (University of Bern) |
| Abstract: | Mexico’s structural reforms are already boosting productivity, but more can be done. This paper focuses on issues that have led to the success of the “modern” Mexico, and have led to difficulties with the “traditional” Mexico. These include the success of Global Value Chains (GVCs) in advancing the trade integration and linkages of key sectors, as well as how competition problems, excessive local regulation, and weak legal institutions have led to misallocation across firms. This paper examines in particular Mexico’s successful integration into GVCs. OECD research suggests that GVC participation can bring economic benefits in terms of productivity, diversification and sophistication of production. Understanding what drives integration into GVCs provides policy guidance to support a wider integration. |
| Keywords: | competition, global value chains, international trade, misallocation, productivity |
| JEL: | F14 F23 F68 L16 O24 |
| Date: | 2017–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1376-en&r=int |
| By: | Rania S. Miniesy (The British University in Egypt); Eman Elish |
| Abstract: | The objectives of this paper are twofold; to investigate the host country determinants of Chinese Outward Foreign Direct Investment (OFDI) in general and to examine, given these determinants, if Chinese OFDI in MENA is different (less) than elsewhere. We obtained data for the top forty Chinese OFDI recipients worldwide and that included seven MENA countries from 2003-2012. Using a pooled ordinary least squares estimation technique on the lagged explanatory variables and the lagged dependent variable flows and stocks alternatively with robust standard errors, we found the following: Chinese OFDI is market seeking, resource seeking, and efficiency seeking and that it is not deterred by poor governance but on the contrary is attracted to it. Chinese OFDI follows its exports and relocates probably to evade barriers to trade in third markets. The seven MENA countries seemingly receive significantly less Chinese OFDI flows compared to other countries because they are less open, have lower labor productivity and do not import as much on average from China as other non-MENA countries. However, careful inspection shows that UAE is creating this bias; in other words, UAE is the reason Chinese OFDI to the MENA_7 is significantly less than in other countries. This maybe because exporting to UAE rather than licensing or FDI seems like the best scenario, or UAE is already satiated with FDI from other countries, or China is waiting for the right time to enter such an FDI-competitive market like that of UAE. |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1024&r=int |
| By: | Cebreros Zurita Carlos Alfonso;Chiquiar Daniel;Roa Mónica;Tobal Martín |
| Abstract: | This paper develops a standard model of international trade and makes three contributions. First, it shows that when the welfare function of the recipient country reflects the utility of natives, free-trade and free-migration generate isomorphic results, that is, they increase overall welfare but redistribute income by reducing the returns of the scarce factor. Although this result is frequently evoked in academic circles, this document shows that the equivalence holds for the most relevant measure of welfare from a political economy perspective. Second, this equivalence is extended to the public policy domain: for each level of trade restrictions mutually imposed, it is found an immigration tax that generates the same redistribution and welfare impacts. Third, in the light of these results, the model is enlarged to illustrate a channel through which political economy concerns may influence immigration policy. |
| Keywords: | International Migration, Political Economy, International Trade |
| JEL: | F22 F13 D72 D78 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdm:wpaper:2017-03&r=int |
| By: | Ellen R. McGrattan; Andrea Waddle |
| Abstract: | In this paper, we estimate the impact of increasing costs on foreign producers following a withdrawal of the United Kingdom from the European Union (popularly known as Brexit). Our predictions are based on simulations of a multicountry neoclassical growth model that includes multinational firms investing in research and development (R&D), brands, and other intangible capital that is used nonrivalrously by their subsidiaries at home and abroad. We analyze several post-Brexit scenarios. First, we assume that the United Kingdom unilaterally imposes tighter restrictions on foreign direct investment (FDI) from other E.U. nations. With less E.U. technology deployed in the United Kingdom, U.K. firms increase investment in their own R&D and other intangibles, which is costly, and welfare for U.K. citizens is lower. If the European Union remains open, its citizens enjoy a modest gain from the increased U.K. investment since it can be costlessly deployed in subsidiaries throughout Europe. If instead we assume that the European Union imposes the same restrictions on U.K. FDI, then E.U. firms invest more in their own R&D, benefiting the United Kingdom. With costs higher on both U.K. and E.U. FDI, we predict a significant fall in foreign investment and production by U.K. firms. The United Kingdom increases international lending, which finances the production of others both domestically and abroad, and inward FDI rises. U.K. consumption falls and leisure rises, implying a negligible impact on welfare. In the European Union, declines in investment and production are modest, but the welfare of E.U. citizens is significantly lower. Finally, if, during the transition, the United Kingdom reduces current restrictions on other major foreign investors, such as the United States and Japan, U.K. inward FDI and welfare both rise significantly. |
| JEL: | F23 F41 O33 O34 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23217&r=int |
| By: | Buiter, Willem H. |
| Abstract: | A border tax adjustment (BTA) is under consideration for the corporate profit tax in the US. Mainstream economic theory holds that BTAs - a switch from taxing exports and exempting imports to taxing imports and exempting exports - is neutral: it will not affect competitiveness and sectoral profitability in the country implementing the BTA or abroad, through adjustments in the exchange rate and in domestic and foreign prices and costs. Conventional wisdom has it that (real) BTA neutrality is achieved through an appreciation of the currency equal in percentage terms to the tax rate. So, with a 20% US corporate tax rate, a neutral BTA would cause the US dollar to strengthen (appreciate) by 20%. This paper shows that the conventional wisdom is not robust. Alternative assumptions about the behaviour of domestic and foreign nominal prices that are (at least) as plausible as the assumptions that imply a 20% appreciation of the US dollar, would instead result in a 20% strengthening of the foreign currency and a matching depreciation of the US dollar. Two key aspects of rigidities in nominal prices are involved: (1) are prices sticky (constant) in terms of the currency of the country of origin or in terms of the currency of the country of destination (pricing-to-market)?; (2) are prices sticky (constant) net-of-tax or tax-inclusive? The empirical evidence slightly favors pricing-to-market (US import prices constant in dollars and US export prices constant in foreign currency). There is no empirical evidence on whether nominal rigidities apply to tax-inclusive or net-of-tax prices. Pricing-to-market for net-of-tax prices produces the depreciation outcome. So does currency-of-origin pricing for tax-inclusive prices. Pricing-to-market for tax-inclusive prices and currency-of-origin pricing for net-of-tax prices produces the appreciation outcome. Given the lack of robust empirical evidence, I believe it is not possible to have any confidence about even the direction of the response of the dollar to a BTA in the US - let alone about the magnitude. The paper has real BTA neutrality as its maintained hypothesis. This is, however, a disputed empirical issue. This further boosts the uncertainty about the exchange rate implications of a BTA. |
| Keywords: | Border tax adjustment; equivalence; exchange rate appreciation; neutrality; nominal price and wage rigidities |
| JEL: | E31 E62 F11 F13 F41 H25 H87 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11885&r=int |
| By: | Brändle, Tobias; Kalweit, René |
| Abstract: | In this paper, we empirically analyse the employment effects of the EU Eastern Enlargement of the EU in 2004. The integration of Central and Eastern European countries involves a massive reduction in both import and export tariffs; however, most of it happens before the actual ascen-sion event. Consequently, a large number German firms both increase their exports to and im-ports from the new EU member states in the time period between 1996 and 2010. The tariff reductions differ between industries and certain groups of firms are differently affected by the liberalisation. Exporters may benefit in terms of employment, while other firms might suffer from the increase in import competition. |
| JEL: | F14 J23 F66 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145502&r=int |
| By: | Rim Berahab |
| Abstract: | An analysis of trade relations between Morocco and sub-Saharan Africa indicates a growing volume of trade, reflecting a continuation of stimulated trade relations. A similar trend is observed in foreign direct investment (FDI), which has continued to grow in recent years, reflecting Morocco's determination to become a major player in the development of the African continent. This Policy Brief first presents trends in inter-regional trade between Morocco and sub-Saharan Africa, focusing on several indicators. Then it analyzes the evolution of the complementarity of Morocco’s exports with imports by its main sub-Saharan partners. Finally, it depicts Morocco's foreign direct investment in sub-Saharan Africa, focusing on the main recipients and the structure of Moroccan FDI. |
| Keywords: | Trade, Morocco, Sub-Saharan Africa, Complementarity, index, exports, imports, free trade agreement, Foreign Direct Investment, concentration, index |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb1704&r=int |
| By: | de Bromhead, Alan; Fernihough, Alan; Lampe, Markus; O'Rourke, Kevin Hjortshøj |
| Abstract: | International trade became much less multilateral during the 1930s. Previous studies, looking at aggregate trade flows, have argued that discriminatory trade policies had comparatively little to do with this. Using highly disaggregated information on the UK's imports and trade policies, we find that policy can explain the majority of Britain's shift towards Imperial imports in the 1930s. Trade policy mattered, a lot. |
| Keywords: | interwar period; trade policy |
| JEL: | F13 F14 N74 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11835&r=int |
| By: | Manova, Kalina; Yu, Zhihong |
| Abstract: | We examine the global operations of multi-product firms. We present a flexible heterogeneous-firm trade model with either limited or strong scope for quality differentiation. Using customs data for China during 2002-2006, we empirically establish that firms allocate activity across products in line with a product hierarchy based on quality. Firms vary output quality across their products by using inputs of different quality levels. Their core competence is in varieties of superior quality that command higher prices but nevertheless generate higher sales. In markets where they offer fewer products, firms concentrate on their core varieties by dropping low-quality peripheral goods on the extensive margin and by shifting sales towards top-quality products on the intensive margin. The product quality ladder also governs firms' export dynamics, both in general and in response to the exogenous removal of MFA quotas on textiles and apparel. Our results inform the drivers and measurement of firm performance, the effects of trade reforms, and the design of development policies. |
| Keywords: | export prices; multi-product firms; product quality; Trade; trade reforms |
| JEL: | D22 F10 F12 F14 L10 L11 L15 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11861&r=int |
| By: | Kis-Katos, Krisztina (University of Goettingen); Pieters, Janneke (Wageningen University); Sparrow, Robert (Wageningen University) |
| Abstract: | We analyse the gender-specific effects of trade liberalization on work participation and hours of work and primary participation in domestic duties in Indonesia. We show that female work participation increased in relative terms in regions that were more exposed to input tariff reductions, whereas the effects of output tariff changes were much less pronounced. When looking at the potential channels for these effects, we find that in Indonesia the structure of initial protection was considerably more female-biased than skill-biased and hence reductions in input tariffs have especially benefited sectors with a larger initial concentration of female workers. This has led to a relative expansion of more female intensive sectors as well as to a decrease in gender segregation of occupation, especially among the low skilled. We also find that labour markets are a key channel through which trade liberalization affects marriage decisions. Delayed marriage among both sexes is related to input tariff liberalization, especially in the younger cohorts, as the improved labour opportunities for women reduce the returns to marriage. |
| Keywords: | labour force participation, gender inequality, marriage, trade liberalization, Indonesia |
| JEL: | F13 F16 J12 J16 J21 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10552&r=int |
| By: | Jung, Benjamin; Kohler, Wilhelm |
| Abstract: | How do input-output linkages modify countries' incentives to conduct commercial policies? We address this question in a version of the Melitz (2003) model where the production-side of the economy is enriched by input-output linkages. The bundle of intermediate inputs used in production in addition to labor is a composite good governed by the same CES aggregator as the final good. Cooperative policies correct for an input distortion generated by the fact that firms' markups translate into the price of the composite good. In the analysis of non-cooperative trade policy, the input distortion stemming from domestic markups counteracts the standard terms-of-trade externality, resulting in a lower optimal tariff and potentially an optimal import subsidy. |
| JEL: | F12 F13 D60 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145833&r=int |
| By: | Kahia, Montassar |
| Abstract: | Given the growing international competition and globalization being characterized by the massive reduction of institutional barriers, opening new markets for consumer goods, the birth of many trade agreements and the establishment of the World Trade Organization, it is imperative for companies wishing to grow, the possibility to internationalize. Consequently, one of the first modes of internationalization of a firm is export. Indeed, the success of export can be measured by various factors that depend on company's goal against the use of export strategy. Such factors are grouped into two categories namely: external and internal factors to the company. This paper will focus on exploring and analyzing the key factors that affect the export intensity of Tunisian companies. Thus, our study was conducted at the micro-economic level. Indeed, as the available data, we will try to find out the factors of export activity for a sample of Tunisian companies and this through a Logit model with random effects applied to panel data from 1997 to 2003. Indeed, the main factors that positively affect the probability of exporting in Tunisia are: Capital intensity; the company age and size. Furthermore, among the main factors that negatively affect the probability of exporting, we state labor cost. |
| Keywords: | Export intensity; Logit model; Panel data; Tunisian companies |
| JEL: | C01 C13 C19 C5 F1 F13 F6 O1 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:77278&r=int |
| By: | Acharyya, Rajat; Kar, Saibal |
| Abstract: | This paper shows that trade and emigration of skilled workers from a poor country is complementary but that between trade and emigration of unskilled workers is a substitute. The asymmetric effect of more openness to trade on the local wages seems to be crucial in driving such results. The asymmetric changes in skilled and unskilled wages generate counterintuitive outcomes regardless of the policy shock that triggers such wage effect. One of the more compelling outcomes is rise in wage inequality as influenced by asymmetric emigration patterns. |
| Keywords: | Trade,emigration,skilled labour,specific factor,remittances,tax |
| JEL: | F22 J64 O15 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:4&r=int |
| By: | Jamal Ibrahim Haider (Center for International Development at Harvard University) |
| Abstract: | Do export sanctions cause export deflection? Data on Iranian non-oil exporters between January 2006 and June 2011 shows that two-thirds of these exports were deflected to non-sanctioning countries after sanctions were imposed in 2008, and that at this time aggregate exports actually increased. Exporting firms reduced prices and increased quantities when exporting to a new destination, however, and suffered welfare losses as a result. |
| JEL: | F13 F14 F15 F21 F5 F6 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cid:wpfacu:80&r=int |
| By: | Haile, Getinet; Srour, Ilina; Vivarelli, Marco |
| Abstract: | There is a dearth of research on the impact of technological change over employment in least developed countries (LDCs) embarking on globalization and consequent international technological transfer. Using a panel of 1,940 Ethiopian firms over the period 1996–2004 and deploying GMMSYS estimates, this paper aims to establish the role played by trade, FDI and technology in affecting employment and skills. The results obtained lend support to a labour–augmenting effect. Moreover, the implemented two-equation dynamic framework provides evidence of a skill-bias specific to those enterprises with higher share of foreign ownership and located in the vicinity of the capital city. |
| Keywords: | Employment,skills,globalization,FDI,trade,technological change,Ethiopia |
| JEL: | J21 O33 J24 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:16&r=int |
| By: | Schetter, Ulrich |
| Abstract: | We analyze the interplay between product-intrinsic complexity and endogenously chosen product quality in international trade. Our work reveals a novel mecha-nism that can explain a rich set of empirical observations: (1) how specialization within products on quality can equalize comparative advantages across products,(2) why poor countries do not export a broad range of products nonetheless, and (3) why the share of products for which this is the case tends to be decreasing over time. Our theory motivates the use of a censored regression model to esti-mate the link between a country’s GDP per capita and the quality of its exports. Following this empirical strategy, we find a much stronger relationship than when using OLS, in line with our theory. |
| JEL: | F11 F14 F19 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145933&r=int |
| By: | Diez, Federico J. (Federal Reserve Bank of Boston); Mora, Jesse (Occidental College); Spearot, Alan C. (University of California, Santa Cruz) |
| Abstract: | Firms play a critical role in the global economy. In this paper, we survey the behavior of firms in the international economy, both in theory and in the data. We first summarize the key empirical facts that motivate the study of firms in trade. Then, we detail recent theoretical developments on the micro-foundations of firm behavior in an international context, focusing on how firms select into exporting, and how firms respond to international shocks. Finally, we turn to a “real world,” empirically focused view of exporting, beginning with the growth dynamics of firms expanding to global markets, and then addressing the critical financing decisions firms make when engaging in international commerce. We conclude with directions for future research. |
| Keywords: | firm heterogeneity; international trade; exporters |
| JEL: | F10 F12 F14 |
| Date: | 2016–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:16-25&r=int |
| By: | Steffen, Nico |
| Abstract: | This paper introduces the additional dimension of environmental concerns by a government into a setting of rent-extracting strategic trade policy with endogenous firm investment into production technologies. It considers the presence of imperfect competition, namely Cournot competition. The simple analysis highlights the importance of investment incentives caused by tariffs. Furthermore, the implications from traditional tariff considerations can be completely different to the ones derived with an environmentally conscious government. It is shown that an importing country now prefers to impose discriminatory instead of uniform tariffs in a dynamic setting with endogenous technology choices, in order to induce the exporting firms to choose a technology that exhibits lower costs in terms of emissions. |
| JEL: | F18 F13 Q58 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145861&r=int |
| By: | Luis Fernandez; Gonzalo De Cadenas Santiago |
| Abstract: | Systems of interconnected elements are increasingly important in economic applications. This paper elaborates on some ideas of network analysis and its application to the study of systems of economic interest. It focuses on the Identification of influential and vulnerable elements, from both a global and a local perspective. |
| Keywords: | Banks , Global , Sectors and Industries Analysis , Working Paper |
| JEL: | C65 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:bbv:wpaper:1702&r=int |
| By: | Ebaidalla Mahjoub Ebaidalla (University of Khartoum) |
| Abstract: | Egypt, Sudan and Ethiopia possess potential natural and human resources, which can entail successful trade integration between the three countries. This paper investigates the performance of trilateral trade between Egypt, Sudan and Ethiopia. The study also analyzes the prospects and challenges for trade expansion between these countries. The study used the gravity model beside diversification and product complementarity indices to identify the pattern and structure of trade between the three countries. The analysis revealed that Egypt is the most diversified economy, which can lead trade in the region. Moreover, the paper indicated that there are some challenges facing the implementation of any trade arrangements between these countries, including: export concentration, poor infrastructure and political instability. Finally, the paper concludes with some recommendations to facilitate free trade between the three countries. |
| Date: | 2016–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1057&r=int |
| By: | Mónica Correa-López (Banco de España); Rafael Doménech (BBVA RESEARCH AND UNIVERSITY OF VALENCIA) |
| Abstract: | Using a panel of firm-level data from Spanish manufacturers, this study shows that better service regulation reduces the price of intermediate inputs paid by downstream firms. The beneficial cost effects of services reforms extend to both large and small-to-medium sized corporations (SMEs), but the former tend to enjoy greater gains. This feature also manifests itself in international markets. We identify an input cost channel through which service regulations affect the volume of exports of large manufacturers, while the evidence of such channel is weaker for SMEs. Our estimates indicate that, from 1991 till 2007, large firms increased their volume of exports by an average of 22% as a result of the direct input cost effect of services reforms, such that the firms that benefited the most typically belonged to industries more dependent on service inputs. Furthermore, convergence to the “best practice” regulatory framework in services would have raised exports at least by an additional 10%. We conclude that firm size is relevant for the connection between services reforms, intermediate input prices and export volumes |
| Keywords: | service regulations, intermediate input prices, exports, firm size |
| JEL: | L11 L43 F14 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1707&r=int |
| By: | Horn, Henrik; Tangerås, Thomas |
| Abstract: | We analyze the optimal design and implications of international investment agreements. These are ubiquitous, potent and heavily criticized state-to-state treaties that protect foreign investors against host country policies. Optimal agreements cause national but not global underregulation ("regulatory chill"). The incentives to form agreements and their distributional consequences depend on countries. unilateral commitment possibilities and the direction of investment flows. Foreign investors benefit from agreements between developed countries at the expense of the rest of society, but not in the case of agreements between developed and developing countries. |
| Keywords: | expropriation; Foreign direct investment; international investment agreements; regulatory chill |
| JEL: | F21 F23 F53 K33 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11879&r=int |
| By: | Noh, Bobae; Heshmati, Almas |
| Abstract: | This paper aims to estimate the impact of bilateral Official Development Assistance (ODA) provided by Korea on its bilateral export to recipient countries. The empirical analysis is based on data from 1996 to 2014 with 121 recipient countries. Although the two models of determinants of ODA and its export effectiveness are highly interrelated, this kind of simultaneous model specification with two-ways causal relationship has not been conducted in the past. Employing a three-stage least squares estimation method leads to accounting for twoways causal relationships between ODA and export while the endogeneity and sample selection bias are accounted for. Through using the gravity model in analysis of Korea’s aggregated export data, the positive effect of bilateral ODA is confirmed when fixed unobserved effects are controlled. The model is further generalized by disaggregation of ODA into its underlying types. The results show that, humanitarian aid and loan-type aid turn out to be effective types of ODA to influence export positively. In terms of Korea’s ODA allocation, the finding suggests that there is a two-stage decision making process in aid provision. In the first stage, a humanitarian purpose of aid dominates responding to lower income and disaster experienced countries’ needs, even when lower bilateral trade prevails. The second stage is to make a decision regarding the size of ODA to selected recipient countries, and this presents a mixed purposes of giving ODA aiming at higher importer countries. |
| Keywords: | Gravity model,bilateral Official Development Assistance,bilateral export,Threestage least squares,Korea |
| JEL: | F14 F21 F35 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:9&r=int |
| By: | Razin, Assaf |
| Abstract: | The exodus of Soviet Jews to Israel in the 1990s was a unique event. The extraordinary experience of Israel, which has received three quarter million migrants from the Former Soviet Union, amounting to 17 percent of its population, within a short time, is also relevant for the current debate about migration and globalization. The immigration wave was distinctive for its large high skilled cohort, and its quick integration into the domestic labor market. Immigration also changed the entire economic landscape: it raised productivity, underpinning technological prowess, and had significant impact on income inequality and the level of redistribution in Israel's welfare state. |
| JEL: | F22 F6 H00 J1 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11877&r=int |
| By: | Kokko, Ari (Copenhagen Business School); Gustavsson Tingvall, Patrik (The Ratio Institute); Videnord, Josefin (The Ratio Institute) |
| Abstract: | This article examines the distribution of antidumping (AD) disputes across countries and industries, and examines which AD cases reach the dispute settlement system of the WTO. Our general finding is that neither the country nor the industry distribution of AD cases remains constant across the different levels of disputes, as cases proceed from notifications to requests for consultations and third party adjudication at the WTO. The US is the main user of AD measures, as well as the main target for complaints at the WTO’s Dispute Settlement Body. However, emerging markets have increasingly started using AD law to protect their domestic firms. We find that the typical AD notification is submitted by an upper middle-income country, and it focuses on a medium low-technology industry with differentiated products, but low relationship-specificity. The most typical complainant at the WTO is also an upper middle-income country, challenging a high-income country (most likely the US) that is allegedly giving unfair protection to an industry producing differentiated goods that are not very relationship-specific, using medium-low technologies. The analysis also reveals that when lower middle-income countries are challenged at the WTO, disputes are often resolved before third party adjudication is needed. |
| Keywords: | Trade conflict; Antidumping; WTO; Dispute settlement |
| JEL: | D74 F51 F53 H73 O24 |
| Date: | 2017–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0286&r=int |
| By: | Che, Yi; Du, Julan; Lu, Yi; Tao, Zhigang |
| Abstract: | Rest upon an extensive data set on Foreign Invested Enterprises (FIEs) in China, we investigate the role of institutional difference in determining the locational choice of foreign direct investment (FDI). Estimation results using firm-level discrete choice model suggest that FIEs from source countries that are more remote institutionally from the Chinese mainland exhibit a higher degree of sensitivity toward regional economic institutions in their choice of FDI location. Furthermore, we find that FIEs coming from countries with better institutions than China are more sensitive to institutional difference. Interestingly, we find that the deterrent effct of institutional distance on FDI entry is mitigated for FIEs coming from countries with more ethnic Chinese in their overall populations. |
| Keywords: | Institutional Difference; FDI Location Choice; China |
| JEL: | F23 P16 |
| Date: | 2017–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:77158&r=int |
| By: | Dix-Carneiro, Rafael; Soares, Rodrigo R.; Ulysse, Gabriel |
| Abstract: | This paper studies the effect of changes in economic conditions on crime. We exploit the 1990s trade liberalization in Brazil as a natural experiment generating exogenous shocks to local economies. We document that regions exposed to larger tariff reductions experienced a temporary increase in crime following liberalization. Next, we investigate through what channels the trade-induced economic shocks may have affected crime. We show that the shocks had significant effects on potential determinants of crime, such as labor market conditions, public goods provision, and income inequality. We propose a novel framework exploiting the distinct dynamic responses of these variables to obtain bounds on the effect of labor market conditions on crime. Our results indicate that this channel accounts for 75 to 93 percent of the effect of the trade-induced shocks on crime. |
| JEL: | J6 K42 F16 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:3&r=int |
| By: | Cardoso-Vargas, Carlos Enrique |
| Abstract: | This document examines and quantifies the effect that productivity and firm-internal selection have on the sale of new products to new destinations To quantify the influence of the firm-internal selection, we used a measurement of distance to the core which reflects, by means of an index, the degree that commercial distance merchandise sold has vis-à-vis the core product. The results show that decreasing the distance for products far from the core would require a great deal of effort on the part of firms in terms of quality or cost. It was also determined that if the distance between a product to be exported and the core product is doubled, its probability of generating a new product-country commercial link decreases 7.72 percentage points. That possibility decreases even further to destinations with consumers with high purchasing power. In the internal selection made by companies with regard to their products, there are factors influencing the selection of merchandise other than the core product. They move in opposite directions. On the one hand, there is a positive effect emanating from productivity and firm size, as well as an opposite effect due to market access and core-product price. The findings have implication for the possibilities of diversifying markets and expanding export-product portfolios. |
| Keywords: | international trade, heterogeneity of firms, behavior of companies |
| JEL: | D21 F13 F14 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:77192&r=int |
| By: | Inma Martínez-Zarzoso; Leila Baghdadi; Hendrik Wiard Kruse (University of Goettingen) |
| Abstract: | The main aim of this paper is to investigate the effects of Tunisian trade policy on household welfare. We use the recently released household survey data in combination with estimated tariff pass-through elasticities and wage elasticities obtained from Mincerian equations. Changes in tariffs affect both local prices and wages and those changes are transmitted into changes in household expenditure. Using the methodology proposed by Porto (2006), the main results show that the changes in household welfare are positive and have a greater effect for the lower quantiles of the expenditure distribution. This result is largely explained by the fact that the decrease in consumer goods prices benefits poor more than rich households, while labor income effects are close to zero. |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1033&r=int |
| By: | Sandra Polónia Rios; Pedro da Motta Veiga; Eduardo Augusto Guimarães |
| Abstract: | Despite the sustained growth in the bilateral trade observed at the beginning of the Century, Moroccan – Brazilian economic relations are still going through what could be called the ‘shallow’ phase of relations between two middle-income countries. |
| Keywords: | Brazil, Morocco, Latin America, South, Economy, cooperation, Trade, Industry, Bilateral, FDI, Exports, Imports, Services, Infrastructure, Finance |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:rpaper:pp-1702&r=int |
| By: | Razin, Assaf |
| Abstract: | The paper reviews the role of globalization forces behind Israel's transformation from low tech to high tech economy |
| JEL: | F01 F36 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11882&r=int |
| By: | Jaumandreu, Jordi; Yin, Heng |
| Abstract: | We use data from 70,000 Chinese manufacturing firms, which are both domestic sellers and exporters, to estimate the joint distribution of unobserved productivity (cost advantages) and unobserved demand heterogeneity (product advantages) from 1998 to 2008. Product advantages are negatively correlated with cost advantages (positively correlated with marginal cost). We characterize growth and sketch examples to show that splitting the advantages produces useful analytical insights. The state is not good at developing product advantages. A fraction of firms specialize in low-cost-low-quality exports. Many marginal cost differences across firms come from heterogeneous output-embodied levels of quality and technology, not "price distortions." |
| Keywords: | cost advantages; demand heterogeneity; product advantages; productivity |
| JEL: | C33 D24 L11 O30 O47 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11862&r=int |
| By: | Tan, Yong; Zhao, Chen |
| Abstract: | In this paper we investigate the different behaviors between new and continuing exporters in response to exchange rate shocks. We establish a dynamic model, in which new exporters strategically charge a lower price than continuing exporters in order to increase their current sales and accumulate their consumer base in future periods. The model predicts that new exporters adjust their price more aggressively relative to their continuing counterparts in response to exchange rate fluctuations in order to build future demand stock. Using a transaction-level dataset containing all Chinese exporters over the 2000-2009 period, we find supporting evidence for the model's predictions: new exporters adjust their price 1.5 times more than the continuing exporter. Our findings imply different exchange rate pass-through between new and continuing exporters, and the various ratios of new exporters lead to different degree of exchange rate pass-through across countries at the aggregate level. |
| Keywords: | New Exporters, Continuing Exporters, Exchange Rate Shocks, Pass-through |
| JEL: | F14 F31 F33 O19 |
| Date: | 2017–03–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:77244&r=int |
| By: | Kohler, Wilhelm Kaspar; Stähler, Frank |
| Abstract: | This paper scrutinizes the effects of investor-state dispute settlements (ISDS) and national treatment provisions in a two-period model where foreign investment is subject to domestic regulation and a holdup problem. It shows that ISDS can mitigate the holdup problem and increases aggregate welfare, but comes with additional regulatory distortions for the first period. A national treatment provision avoids these regulatory distortions, but implies entry distortions because it makes the holdup problem also apply to domestic firms. If the domestic regulatory framework applies to many domestic firms, a national treatment provision welfare-dominates ISDS. |
| JEL: | F21 F23 F53 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145652&r=int |
| By: | Giesing, Yvonne; Laurentsyeva, Nadzeya |
| Abstract: | This paper establishes a causal link between the emigration of skilled workers and firm performance. We exploit time, country, and industry differences in the opening of EU labour markets from 2004 to 2014 as a source of exogenous variation in the emigration rates from new EU member states. Using firm-level panel data from ten East European countries, we show that the outflow of skilled workers reduces firm total factor productivity and increases personnel costs. One explanation for this effect is the increased job turnover, which lowers firm-specific human capital. We find that the most productive firms adapt more easily to emigration as they are better able to retain and train their workers. |
| JEL: | F22 O15 D24 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145850&r=int |
| By: | Todtenhaupt, Maximilian; Voget, Johannes |
| Abstract: | We investigate the effect of international differences in corporate taxation on the realization of productivity gains in M&A deals. We argue that tax differentials distort the efficient allocation of productive factors following an M&A and thus mitigate the resulting productivity improvement. Using firm-level data on inputs and outputs of production as well as on corporate M&As, we estimate that a 1 percentage point increase in the absolute tax differential between the locations of two merging firms reduces the subsequent total factor productivity gain by 4.5%. This effect is less pronounced when firms can use international profit shifting to attenuate effective differences in taxation. In a complementary analysis, we use an event study design and a fixed effects model to explore the timing of the response of productivity, as well as, labor and capital input to the tax rate differential after the merger separately for the acquirer and the target. We show that our findings are mainly driven by deals with targets residing in locations with a tax advantage with respect to the acquirer. In these transactions, tax differentials reduce the post-merger adjustment in the target firm and inhibit the full realization of productivity gains. |
| Keywords: | M&A,productivity,international taxation |
| JEL: | F23 G34 H25 D24 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:17014&r=int |
| By: | Nora Aboushady; Chahir Zaki (Cairo University) |
| Abstract: | The objective of this paper is to explore the nexus between exports performance and components of the investment climate. This paper contribution is twofold: first, the paper fills the gap in the available literature by combining both the literature on productivity and investment climate and that on exports and productivity. Second, we use firm-level data to examine the differential impact of investment climate on both the intensive and the extensive margins using the World Bank enterprise survey for Egypt. Our results suggest that in fact, politics do matter for two reasons. First, the most important constraint affecting firms’ exports is political instability despite investment reforms. Second, the ability of state owned firms to become exporters, despite their limited competitiveness once they enter the exports market. Finally, tax policy and competition from the informal sector are the most important impediments that hinder both the increase in the number of exporters and the quantity of exports. Imported inputs do also matter for both of the two margins. |
| Date: | 2016–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1071&r=int |
| By: | D'Ambrosio, Anna; Montresor, Sandro; Parrilli, Mario Davide; Quatraro, Francesco (University of Turin) |
| Abstract: | This paper investigates the impact of migration on innovation networks between regions and foreign countries. We posit that immigrants (emigrants) act as a transnational knowledge bridge between the host (home) regions and their origin (destination) countries, reinforcing their networking in innovation and facilitating their co-inventorship. We argue that the social capital of both the hosting and the moving communities reinforces such a bridging role, along with the already recognised effect of language commonality and migrants’ human capital. By combining patent data with national data on residents and electors abroad, we apply a gravity model to the co-inventorship between Spanish provinces (NUTS3 regions) and a number of foreign countries, in different periods of the last decade. Both immigrants and emigrants are found to affect this kind of innovation networking. The social capital of both the moving and the hosting communities actually moderate this impact in a positive way. The effect of migration is stronger for more skilled migrants and with respect to non-Spanish speaking countries, pointing to a language-bridging role of migrants. Overall, individual and community aspects combine in accounting for the impact of migration on international innovation networks. |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:uto:labeco:201701&r=int |
| By: | Burhan, Nik Ahmad Sufian; Sidek, Abdul Halim; Ibrahim, Saifuzzaman |
| Abstract: | African continent has the highest rate of child labour in the world. In this empirical study, we examined the impacts of income per capita, primary school enrolment, fertility rate, and the inward foreign direct investment (FDI) stock on the rate of child labour in Africa. We used the panel data on child labour that comprises of 44 African countries for the period 1980–2003 to assemble the largest number of observation on the variables employed. By employing the Panel Estimated Generalized Least Squares (EGLS) with cross-section weights method, the results of regression analysis showed that the raising of income per capita, FDI, and the percentage of school enrolment were highly significant in reducing the rate of child labour in Africa. Furthermore, a decrease in fertility rate was highly significant to curb the incidence of children employment in the labour market. The weighted-R2 of the panel regression was reported at 95.1%. Following the results, the role of government in implementing public policies was discussed. |
| Keywords: | child labour; Africa; income; schooling; fertility; globalization; foreign direct investment |
| JEL: | I30 J13 O55 |
| Date: | 2016–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:77250&r=int |
| By: | Michael White (Policy Studies Institute, University of Westminster); Alex Bryson (University College London, National Institute of Social and Economic Research and Institute for the Study of Labor) |
| Abstract: | Using nationally representative workplace data for Britain we identify the partial correlation between workplace wages and the percentage of migrants employed at a workplace. We find wages are lower in workplaces employing a higher percentage of migrants, but only when those migrants are non-EEA migrants. However, the effects are no longer apparent when we condition on the ethnic complexion of employees at the workplace. Instead, the wage penalty is attached to the percentage of non-white employees, a finding that is consistent with employer discrimination on grounds of race, or lower worker bargaining power when employees are ethnically diverse. |
| Keywords: | Migrants; Migration; Ethnicity; Race; Wages, Earnings; Low pay; Discrimination |
| JEL: | J31 J61 J71 |
| Date: | 2017–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:1703&r=int |
| By: | Kose, Ayhan; Lakatos, Csilla; Ohnsorge, Franziska; Stocker, Marc |
| Abstract: | This paper analyzes the role of the United States in the global economy and examines the extent of global spillovers from changes in U.S. growth, monetary and fiscal policies, and uncertainty in its financial markets and economic policies. Developments in the U.S. economy, the world's largest, have effects far beyond its shores. A surge in U.S. growth could provide a significant boost to the global economy. Tightening U.S. financial conditions -whether due to contractionary U.S. monetary policy or other reasons- could reverberate across global financial markets, with adverse effects on some emerging market and developing economies that rely heavily on external financing. In addition, lingering uncertainty about the course of U.S. economic policy could have an appreciably negative effect on global growth prospects. While the United States plays a critical role in the world economy, activity in the rest of the world is also important for the United States. |
| Keywords: | Business Cycles; global economy.; Trade; uncertainty; United States |
| JEL: | C15 E32 E52 F13 H30 O51 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11836&r=int |