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on International Trade |
| By: | Joel HELLIER (LEM-CNRS (Univ. Lille, France)) |
| Abstract: | We review the channels through which the different dimensions of globalization and their interactions impact inequality in advanced economies. North-South trade of final goods, of intermediate goods and of tasks (offshoring) and the interplay between trade and technology generate winners (high skilled workers and capital owners) and losers (low and medium skilled workers) and raises inequality. To make everyone win, a share of the winners’ gain should be redistributed to the losers. But the increasing international mobility of the winners and of the tax bases they own (capital and high incomes) generates tax competition and a race to the bottom of the related tax rates. This tends to reduce the existing social transfers but it also hinders the redistribution necessary to offset trade-driven inequality. In addition, globalization (i) modifies anti-inequality policies by producing an inequality-unemployment tradeoff and a redistribution-progressivity tradeoff, and (ii) fosters public debt and/or over-taxation of the middle class if the governments compensate the increase in social risks, generating a middle class curse and a social democracy curse. It can also hamper skill upgrading which is a major means to fight growing inequality in the longer term. Finally, (i) partial approaches and estimates which do not encompass the diverse interactions highlighted here could reveal to be misleading and (ii) combating globalization-related inequality should focus on tax and social rules avoidance rather than on trade restrictions. |
| Keywords: | Globalization; Inequality; Social policies; Tax competition, Trade. |
| JEL: | E25 F16 H2 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2021-575&r=all |
| By: | ; ; Francois de Soyres; Elena Pavlova |
| Abstract: | Global value chain (GVC) participation affects the relationship between trade volumes and exchange rate movements. Guided by a simple theory, we show that exports react to the exchange rate between the country producing value added contained in exports and the country of final absorption for this value added. Three predictions follow: (i) a higher share of foreign value added in exports reduce the responsiveness of export volumes to exchange rate changes, (ii) a greater share of exports that returns as imports also reduce the responsiveness of export volumes and (iii) a higher share of inputs that are further reexported increase the responsiveness of exports to the trading partner's nominal effective exchange rate. Using a large origin-sector-destination level panel data set covering the period 1995-2009 and around 85% of world GDP, we find strong empirical support for these predictions. We further show that some sectors in some countries can experience a decline in gross exports when their currency depreciates. |
| Keywords: | Currency unions; Export elasticities; Exchange rate passthrough; Global value chains |
| JEL: | F14 F40 |
| Date: | 2021–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1309&r=all |
| By: | Meinen, Philipp; Serafini, Roberta; Papagalli, Ottavia |
| Abstract: | The paper provides an ex-post analysis of the determinants of within-country regional heterogeneity of the labour market impact of COVID-19. By focussing on the first wave of the pandemic in the four largest euro area economies, it finds that the propagation of the economic impact across regions cannot be explained by the spread of infections only. Instead, a region’s economic structure is a significant driver of the observed heterogeneity. Moreover, our results suggest that a region's trade relations, both within and across countries, represent a relevant indirect channel through which COVID-19 related disruptions affect regional economic activity. In this regard, the analysis depicts vulnerabilities arising from potential disruptions of the highly integrated EU supply chains. JEL Classification: R11, F14, J40, R15 |
| Keywords: | COVID-19 pandemic, input-output linkages, regional differences, sectoral exposure, short-time work |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20212528&r=all |
| By: | Rodrigo Adão (University of Chicago - Booth School of Business; NBER); Costas Arkolakis (Yale University - Department of Economics; NBER); Sharat Ganapati (Georgetown University - Department of Economics) |
| Abstract: | We measure the role of firm heterogeneity in counterfactual predictions of monopolistic competition trade models without parametric restrictions on the distribution of firm fundamentals. We show that two bilateral elasticity functions are sufficient to nonparametrically compute the counterfactual aggregate impact of trade shocks, and recover changes in economic fundamentals from observed data. These functions are identified from two semiparametric gravity equations governing the impact of bilateral trade costs on the extensive and intensive margins of firm-level exports. Applying our methodology, we estimate elasticity functions that imply an impact of trade costs on trade flows that falls when more firms serve a market because of smaller extensive margin responses. Compared to a baseline where elasticities are constant, firm heterogeneity amplifies both the gains from trade in countries with more exporter firms, and the welfare gains of European market integration in 2003-2012. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:bfi:wpaper:2020-161&r=all |
| By: | Pierre Cotterlaz; Etienne Fize |
| Abstract: | This paper documents the effect of information frictions on trade using a historical large-scale improvement in the transmission of news: the emergence of global news agencies. The information available to potential traders became more abundant, was delivered faster and at a cheaper price between countries covered by a news agency. Exploiting differences in the timing of telegraph openings and news agency coverage across pairs of countries, we are able to disentangle the pure effect of information from the effect of a reduction in communication costs. Panel gravity estimates reveal that bilateral trade increased by 30\% more for pairs of countries covered by a news agency and connected by a telegraph than for pairs of countries simply connected by a telegraph. |
| Keywords: | Information;International Trade;Economic History;News Agency;First Globalization |
| JEL: | N70 F14 F15 F10 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2021-02&r=all |
| By: | Julia Grübler (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | The effects of travel bans, and the disruption of production and shipping due to COVID-19 quickly rippled through global production and supply chains, even when the virus SARS-CoV-2 was still contained within East Asia. The global spread of the virus resulted in export restrictions on goods needed to fight the pandemic, while the import of similar goods was liberalised. Short-sighted panic reactions increased the vulnerability of global value chains and revealed dependencies on imported goods, particularly from China. Despite changes in European attitudes towards China during the COVID-19 crisis, the pandemic does not seem to be a major game changer. Instead, it acts as a catalyst for trends that were already observable before the crisis and that were amplified by the clashes between the US and China. The European Commission recommends diversifying supplies to mitigate risks, while preserving international competition, but defending the EU market against unfair trade practices. In Europe, major uncertainties in the field of international trade concern Brexit, the future of transatlantic trade ties after the presidential election in the US, the stability of the rules-based trade order under the World Trade Organization and the shift of institutional power towards East Asia surrounding the trade blocs of the Association of Southeast Asian Nations (ASEAN), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the newly established Regional Comprehensive Economic Partnership (RCEP) agreement. In view of China’s shift in main principles of action away from adopting existing international norms, the fragility of the liberal international order, and the ambiguous competition and co-operation relationship between the EU and China, it is more important than ever that EU member states follow a co-ordinated approach at the EU level in full unity to achieve the goal of ‘open strategic autonomy’. Small open European economies, such as Austria, should re-evaluate their trade dependencies and consider supporting partial near-shoring to neighbouring Central, East and Southeast Europe. Furthermore, it is recommended to the EU and its member states to step up investment with European value added, for instance in common health, rail transport and energy infrastructure in order to foster the EU’s long-run growth prospects and its green transition. |
| Keywords: | EU, China, COVID-19, pandemic, trade policy, value chains |
| JEL: | H53 F13 F21 L1 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:wii:pnotes:pn:44&r=all |
| By: | Kohnert, Dirk |
| Abstract: | ABSTRACT & RÉSUMÉ : Abstract: Every three years, the AU-EU summit reunites African and EU leaders to outline the future direction of cooperation. The 6th summit had been to reaffirm and renew the partnership between the two blocks already in October 2020, but it was pushed back to the first quarter of 2021 or even later due to COVID-19 crisis. Besides, Brussels had to deal with its own post-Brexit situation and its repercussions on EU-Africa relations, excluding the UK. African states, for their part, wanted to renegotiate the EU-Africa partnership and to balance it with new promising Post-Brexit visions of the British premier Johnson about increased economic ties with the African Angloshere. China and other global players compete with the EU and its member states in the new scramble for African resources. Given that Africa is increasingly courted by other partners it could be inclined to successively limit its relations with the EU and see it as a mere provider of aid and security against Islamic terrorism. This trend was reinforced by the fact that the new EU-Africa strategy still hasn't been approved by EU member states. And a timely replacement of the Cotonou Agreement, which expires in November 2021, is open to question. RÉSUMÉ: LE SOMMET UE-AFRIQUE 2021 : QUO VADIS, COMPTE TENUE DU BREXIT ET DE LA CORONA : Tous les trois ans, le sommet UA-UE réunit les dirigeants africains et européens pour définir l'orientation future de la coopération. Le 6e sommet devait réaffirmer et renouveler le partenariat entre les deux blocs déjà en octobre 2020, mais il a été repoussé au premier trimestre 2021, ou même plus tard, en raison de la crise du COVID-19. En outre, Bruxelles a dû faire face à sa propre situation post-Brexit, compte tenu l'exclusion du Royaume-Uni, et à ses répercussions sur les relations UE-Afrique. Les États africains, pour leur part, souhaitaient renégocier le partenariat UE-Afrique, et l'équilibrer avec les nouvelles visions post-Brexit prometteuses du premier ministre britannique Johnson sur le renforcement des liens économiques avec l'Angloshere africaine. La Chine et d'autres acteurs mondiaux sont en concurrence avec l'UE et ses États membres dans la nouvelle ruée vers les ressources africaines. Étant donné que l'Afrique est de plus en plus courtisée par d'autres partenaires, elle pourrait être encline à limiter successivement ses relations avec l'UE et à la considérer comme un simple fournisseur d'aide et de sécurité contre le terrorisme islamique. Cette tendance a été renforcée par le fait que la nouvelle stratégie UE-Afrique n'a toujours pas été approuvée par les États membres de l'UE. Et un remplacement opportun de l'accord de Cotonou, qui expire en novembre 2021, est sujet à caution. |
| Keywords: | Corona, Brexit, Africa, UK, EU, international trade, economic recession, poverty, violence, |
| JEL: | F13 F35 F45 F63 G15 I1 I18 N17 N47 N67 O17 P16 Z13 |
| Date: | 2021–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:106283&r=all |
| By: | Hyojung Kang (Economics Department and International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University); Jorge Martinez-Vazquez (International Center for Public Policy, Georgia State University, USA) |
| Abstract: | Foreign Direct Investment (FDI) is widely considered among the most effective instruments for the promotion of economic development. However, not all FDI leads to inclusive economic growth, lifting the welfare of the poorest groups in developing countries. This paper examines the conditions under which FDI can effectively lead to inclusive growth. By using a fixed effects regression with annual data for 68 countries from 1990 to 2015, we find that FDI has the most positive effect on inclusive growth when there is a sufficiently large manufacturing sector and a developed enough infrastructure base in the host country. These not very optimistic results emphasize the critical importance of the host country’s absorptive capacity. A smaller technological or knowledge gap with the foreign firms is required for FDI to lead to more linkages and spillovers, and ultimately job creation for the poor. The results cast doubt on development strategies that rely on FDI as a sufficient policy for inclusive growth. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper2104&r=all |
| By: | Dutta, Sourish |
| Abstract: | The phenomenon of global value chains (GVCs) indicates a division of labour type production structure in which tasks and business functions are distributed among several companies, globally, or regionally (Grossman and Rossi-Hansberg 2008). The critical features of GVCs are therefore the international dimension of the production process and the "contractualisation" of buyer and seller relationships, often across international borders (Antras 2016). As a result, these international production networks are highly complex regarding geography, technology, and the different types of firms involved (from large retailers and highly large-scale mechanised manufacturers to small home-based production). Sometimes it may be impossible even to identify all the countries that are involved or the extent of their involvement (Gereffi and FernandezStark 2016). However, the recent development of OECD-WTO’s Trade-in Value Added (TiVA) data represents a fundamental step forward in understanding GVC trade. Grossman & RossiHansberg (2008, 2012) rightly point out that the different tasks, rather than sectors, define the specialisation of countries in the value chains. |
| Date: | 2021–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:kgryp&r=all |
| By: | Dolabella, Marcelo; Durán Lima, José Elías |
| Abstract: | This study analyses the impact of reducing intraregional trade barriers in the context of a free trade agreement in Latin America and the Caribbean. It concludes that a full tariff reduction and elimination of non-tariff measures would have positive impacts on trade, production, welfare and employment across the region. |
| Date: | 2021–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col022:46649&r=all |
| By: | Sodiq Arogundade (College of Business and Economics, University of Johannesburg); Mduduzi Biyase (College of Business and Economics, University of Johannesburg); Hinaunye Eita (College of Business and Economics, University of Johannesburg) |
| Abstract: | The controversies that trails whether FDI’s impact is conditional on certain intermediating variables or not, has become a recurring discourse in the FDI-welfare literature. While the quality of institution has prominently featured as playing a vital role on the one hand, infrastructure level and economic growth have also been highlighted as good candidates on the other hand. This study examines the necessary local economic conditions required for the existence of positive spillovers from multinationals’ investment in improving inclusive human development. In achieving this, a panel 28 SSA countries from 1996-2018 was explored using panel smooth transition regression model (PSTR). The results support the view that institutional quality and infrastructure are germane in enhancing the impact of FDI on welfare distribution. The study further suggest that higher economic growth is a necessary but not sufficient condition in facilitating the impact of FDI, as economic growth must be combined with either infrastructure or quality institution before generating the anticipated impact. This implies that the more host nations improve the conditions of their economies, the more they reap the benefit of FDI in terms of job creation, technological spillovers, and distribution of welfare. Conclusion emanating from this study is that beyond putting in place FDI’s promotional policies to improve the appetite of multinational corporations, SSA countries need to further privatize and liberalize critical sectors in their economies in order to provide needed liquidity for investment in infrastructure, growing the economy as well as public sector reform. |
| Keywords: | Inclusive Human Development, Foreign Direct Investment, Local Economic conditions, Panel Smoothening Transition Regression Model and Sub-Saharan African Countries |
| JEL: | F23 I30 H54 O43 |
| URL: | http://d.repec.org/n?u=RePEc:ady:wpaper:edwrg-01-2021&r=all |
| By: | Sodiq Arogundade (College of Business and Economics, University of Johannesburg); Mduduzi Biyase (College of Business and Economics, University of Johannesburg); Hinaunye Eita (College of Business and Economics, University of Johannesburg) |
| Abstract: | Emerging literatures on foreign direct investment (FDI) now suggest FDI’s positive spillovers in alleviating poverty depend on the absorptive capacities of host economies. Prime to these capacities includes the level of human capital development and institutional quality. This study examines how host absorptive capacity can facilitate the benefit FDI can offer. In achieving this, a panel of 28 Sub-Saharan African (SSA) countries from 1996-2018 was explored using instrumental regression. Findings from this study suggest that FDI has a positive and significant relationship with all the poverty indicators in SSA. This suggests that the impact of FDI is contingent on the conditions of the local economy. The study further reveals that FDI will alleviate poverty conditions if interacted with human capital and institutional quality at a given threshold. This implies that the more host nations improve their institutional quality and human capital, the more they reap the benefit of FDI in terms of job creation, technological spillovers, and poverty alleviation. Conclusion emanating from this paper is that policies aimed at attracting FDI without improving conditions of the local economy is effort in futility. Furthermore, SSA countries need to further liberalize, privatize, and securitize critical sectors in their economies in order to provide needed liquidity for investment in human capital as well as institutional reform |
| Keywords: | Poverty, Foreign Direct Investment, Absorptive capacity, Instrumental regression and Sub-Saharan African countries |
| JEL: | F23 I30 E24 E02 |
| URL: | http://d.repec.org/n?u=RePEc:ady:wpaper:edwrg-04-2021&r=all |
| By: | Roseline Misati; Kethi Ngoka |
| Abstract: | This study sought to examine the main constraints to manufacturing export competitiveness in Tanzania. Using panel data for the period 1997-2018, the study established that supply-side factors dominate demand-side factors in explaining manufacturing export competitiveness. Specifically, the results revealed that foreign direct investment and tariffs have a negative and significant effect on export competitiveness in Tanzania, while infrastructure, total investment, labour productivity, and high institutional quality enhance manufactured exports. |
| Keywords: | Competitiveness, Manufacturing, Exports, Global value chains, Tanzania |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2021-35&r=all |
| By: | Toptancı, Ali İskan |
| Abstract: | Blockchain in Supply Chain Management (SCM) is expected to become a more demanded technology in the next five years. The global blockchain supply chain market is projected to grow at a combined annual growth rate of 87%, from $ 45 million in 2018 to $ 3 billion by 2023. Blockchain will improve the business for all global supply chain stakeholders by providing enhanced traceability, facilitating digitization, and securing the chain of custody. This study provides a synthesis of the current challenges in global supply chain and trade operations, as well as the relevant capabilities and potential of blockchain. In addition, this study will present leading pilot initiatives to implement blockchain technology in supply chains and the logistics industry to meet various needs. By discussing the effects of blockchain on customs and government institutions; The difficulties in ensuring the wide distribution of blockchain technology in global supply chain management will be discussed. |
| Keywords: | Supply Chain Management,Blockchain,Global Trade,Logistics |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esrepo:229619&r=all |
| By: | Grégoire Garsous; Stephan Worack |
| Abstract: | Only a small number of companies, located in a few countries, have specific technological expertise in wind turbine manufacturing. New quantitative analysis shows this expertise to be a significant driver of trade in wind turbines. Moreover, countries’ wind power generation efficiency is shown to depend on access to higher quality wind turbines available in international markets. Trade in wind turbines thus provides access to technologies with a level of efficiency that cannot be replicated domestically in importing countries. These results have important policy implications: i) barriers to trade in wind turbines are also barriers to the dissemination of key environmental technologies which are not otherwise widely available; ii) trade-discriminatory measures can also negatively impact non-manufacturing job creation in the renewable sector, as this relies on the continuous deployment of wind energy, which in turn depends on access to high quality turbines from international markets; and iii) policies should not focus on the creation of national champions, but rather on ensuring that domestic firms can apply their specific capabilities to new opportunities in the global value chains of renewables industries. |
| Keywords: | Environmental technologies, Patents, Trade, Wind energy |
| JEL: | F13 F18 O13 O33 O42 |
| Date: | 2021–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaaa:2021/01-en&r=all |
| By: | ; ; Ricardo M. Reyes-Heroles; Sharon Traiberman |
| Abstract: | We study the role of global trade imbalances in shaping the adjustment dynamics in response to trade shocks. We build and estimate a general equilibrium, multi-country, multi-sector model of trade with two key ingredients: (a) Consumption-saving decisions in each country commanded by representative households, leading to endogenous trade imbalances; (b) labor market frictions across and within sectors, leading to unemployment dynamics and sluggish transitions to shocks. We use the estimated model to study the behavior of labor markets in response to globalization shocks, including shocks to technology, trade costs, and inter-temporal preferences (savings gluts). We find that modeling trade imbalances changes both qualitatively and quantitatively the short- and long-run implications of globalization shocks for labor reallocation and unemployment dynamics. In a series of empirical applications, we study the labor market effects of shocks accrued to the global economy, their implications for the gains from trade, and we revisit the "China Shock" through the lens of our model. We show that the US enjoys a 2.2 percent gain in response to globalization shocks. These gains would have been 73 percent larger in the absence of the global savings glut, but they would have been 40 percent smaller in a balanced-trade world. |
| Keywords: | Globalization; Labor markets; Trade imbalances |
| JEL: | F10 F16 |
| Date: | 2021–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1310&r=all |
| By: | Loginova, Daria (Agroscope); Portmann, Marco (Administration fédérale des contributions); Huber, Martin |
| Abstract: | Causal estimation of the short-term effects of tariff-rate quotas (TRQs) on vegetable producer prices is hampered by the large variety and different growing seasons of vegetables and is therefore rarely performed. We quantify the effects of Swiss seasonal TRQs on domestic producer prices of a variety of vegetables based on a difference-in-differences estimation using a novel dataset of weekly producer prices for Switzerland and neighbouring countries. We find that TRQs increase prices of most vegetables by more than 20% above the prices in neighbouring countries during the main harvest time for most vegetables and even more than 50% for some vegetables. The effects are stronger for more perishable vegetables and for conventionally produced ones compared with organic vegetables. However, we do not find clear-cut effects of TRQs on the week-to-week price volatility of vegetables although the overall lower price volatility in Switzerland compared with neighbouring countries might be a result of the TRQ system in place. |
| Keywords: | agricultural trade policies, price volatility, Swiss agriculture, seasonal production, vegetable production, price stability, stabilisation policies, tariff-rate quotas, difference-indifferences, inverse probability weighting |
| JEL: | Q02 P52 |
| Date: | 2021–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:fri:fribow:fribow00521&r=all |
| By: | Vera Santomartino (Ministry of Economy and Finance of Italy); Barbara Bratta (Ministry of Economy and Finance of Italy); Paolo Acciari (Ministry of Economy and Finance of Italy) |
| Abstract: | This paper describes the global allocation of activities of Italian multinational enterprises as emerging from the first collection of Country-by-Country Reports (CbCR), the new reporting tool to be filed by multinational enterprises under Action 13 of the G20/OECD BEPS Project. By making use of a new dataset based on microdata collected by CbCR filings, this paper addresses the following questions: where are the activities of Italian MNEs distributed internationally? Does the geographical allocation differ for profits, tangible assets, revenues or employees? How does the allocation differ by sectors? How is the global allocation of Italian MNEs different from that of foreign MNEs? Overall the analysis suggests that the global reach of Italian MNEs is relatively smaller compared to foreign MNEs and that domestic activities still represent a significant share of their global activities. Foreign activities are mostly concentrated in high income countries. Middle income countries present a relatively higher importance in terms of tangible assets and employees than they do in terms of revenues and profits, while the opposite holds for Investment hubs, accounting for a higher share of profits and revenues than they do in terms of tangible assets and employees. |
| Keywords: | multinational firms, country-by-country reporting, corporate taxation, BEPS, offshoring, global value chain |
| JEL: | F23 H25 H26 M16 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:ahg:wpaper:wp2020-9&r=all |
| By: | Alicia García-Herrero; Gary Ng |
| Abstract: | As China’s economic weight continues to grow, so does the global impact of its companies. Chinese state-owned enterprises (SOEs) produce a large share of Chinese goods and services. Given their importance both in China and increasingly globally, it should be measured whether SOEs introduce distortions into markets and how significant those distortions are. Foreign governments negotiating trade or investment deals with China need this information so they can better measure... |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:bre:polcon:41268&r=all |
| By: | Severin Reissl; Alessandro Caiani; Francesco Lamperti; Mattia Guerini; Fabio Vanni; Giorgio Fagiolo; Tommaso Ferraresi; Leonardo Ghezzi; Mauro Napoletano; Andrea Roventini |
| Abstract: | The unprecedented lockdown measures implemented by many countries in the wake of the COVID-19 pandemic have created a need for tools to assess their economic costs. For this purpose, we present a novel dynamic input-output modelling framework which we apply to an estimation of the economic impact of lockdowns in Italy. Lockdown measures are treated as shocks to available labor supply, being calibrated on regional and sectoral employment data coupled with the prescriptions of the prime ministerial decrees mandating the closure of specific industries. Using input-output tables for the Italian regions, we estimate the model on data from the first lockdown during spring 2020 and then simulate it to assess the regional and sectoral impacts. We find that, despite the simplicity of our framework, the model is able to reproduce the observed dynamics during the lockdown-induced downturn and subsequent recovery fairly closely for most sectors. This ability to match the empirical data is also confirmed by a small out-of-sample forecasting exercise. We subsequently also simulate the second set of ''softer'' lockdown measures implemented during autumn and winter of 2020 in order to evaluate their impact and compare them to the first, ''hard'' lockdown. Overall, we believe the simplicity and parsimony of our framework make it suitable for providing quick and reasonably accurate evaluations of the economic effects of different lockdown measures. |
| Keywords: | Input-output; Covid-19; Lockdown; Italy. |
| Date: | 2021–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2021/03&r=all |
| By: | Rodrigo Adao (University of Chicago - Booth School of Business); Paul E. Carrillo (George Washington University - Department of Economics); Arnaud Costinot (Massachusetts Institute of Technology - Department of Economics); Dave Donaldson (Massachusetts Institute of Technology - Department of Economics; CEPR; BREAD: NBER); Dina Pomeranz (University of Zurich - Department of Economics; CEPR) |
| Abstract: | We develop a new factor content approach to study the impact of trade on inequality. Our analysis generalizes the theoretical results of Deardorff and Staiger (1988) and improves on past empirical implementations of these results. Combined with unique administrative data from Ecuador, our approach yields measures of individual-level exposure to exports and imports, for both capital and labor income, as well as estimates of the incidence of such exposure across the income distribution. We find that international trade raises earnings inequality in Ecuador, especially in the upper-half of the income distribution. However, the drop in inequality experienced by Ecuador over the last decade would have been less pronounced in the absence of trade. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:bfi:wpaper:2020-182&r=all |
| By: | Rafael Dix-Carneiro (Duke University); Pinelopi K. Goldberg (Cowles Foundation, Yale University); Costas Meghir (Cowles Foundation, Yale University); Gabriel Ulyssea (University College London) |
| Abstract: | We build an equilibrium model of a small open economy with labor market frictions and imperfectly enforced regulations. Heterogeneous ï¬ rms sort into the formal or informal sector. We estimate the model using data from Brazil, and use counterfactual simulations to understand how trade affects economic outcomes in the presence of informality. We show that: (1) Trade openness unambiguously decreases informality in the tradable sector, but has ambiguous effects on aggregate informality. (2) The productivity gains from trade are understated when the informal sector is omitted. (3) Trade openness results in large welfare gains even when informality is repressed. (4) Repressing informality increases productivity, but at the expense of employment and welfare. (5) The effects of trade on wage inequality are reversed when the informal sector is incorporated in the analysis. (6) The informal sector works as an “unemployment,†but not a “welfare buffer†in the event of negative economic shocks. |
| JEL: | F14 F16 J46 O17 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2271&r=all |
| By: | Massimiliano CODA-ZABETTA; Christian CHACUA; Francesco LISSONI; Ernest MIGUELEZ; Julio RAFFO; Deyun YIN |
| Abstract: | In this chapter we look at the global network of innovative agglomerations, with a focus on their degree of internationalization and on the actors behind it – particularly high-skilled migrants. Using worldwide patent and publication geo-localized data, we identify all Global Hotspots of Innovation (GIHs) and Niche Clusters (NCs) worldwide, and study their success as a function of their international connections. In particular, we compare organizational ones, such as international collaborations orchestrated by multinational firms’ collaborations, to personal ones, which may derive from migration to/from the GIHs and NCs. We find a strong role of the latter, always comparable and sometimes larger than the former. |
| Keywords: | patents; publications; agglomeration; internationalization; migration |
| JEL: | O30 F20 F60 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:grt:bdxewp:2021-02&r=all |
| By: | Lee, Jonhoo |
| Abstract: | Small and medium-sized enterprises (SMEs) account for a significant share of the exports of the Republic of Korea, in large part thanks to the sophisticated digital support infrastructure available to these firms. This document analyses how the government implemented this infrastructure over the last decades in close coordination with the private sector. It also presents the prominent institutions and their digital SME export support instruments. Lastly, it identifies some future challenges and recommendations for Latin America and the Caribbean. |
| Date: | 2021–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col022:46650&r=all |
| By: | Karolina Socha-Dietrich (OECD); Jean-Christophe Dumont (OECD) |
| Abstract: | This paper presents the most recent data on the extent to which migrant nurses contribute to the nursing workforce in the OECD countries as well as the impact these regular migration flows have on the countries of origin, including an analysis of the developments since 2000. The objective of this paper is to provide new data for policy dialogue at the national and international levels. The shares of foreign-born or foreign-trained nurses have continued to rise over the last two decades across the OECD countries, with intra-OECD migration making up a third of the migration volume. Regarding the impact on countries of origin, emigration rates to OECD countries are generally moderate but a few countries experience significant losses of (needed) nurses. However, for a significant share of the foreign-trained nurses, the data sources do not allow the identification of the country of training. Hence, some of the results should be treated as lower-bound estimates. |
| JEL: | F22 J61 O15 |
| Date: | 2021–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaad:125-en&r=all |
| By: | Marta Fana (European Commission – JRC); Davide Villani (The Open University; Goldsmiths College – University of London) |
| Abstract: | This paper studies the automotive supply chain in four European countries (Germany, France, UK and Italy). First, employing WIOD data (Timmer et al., 2015) processed via Trade-SCAN (Roman et al., 2019), we decompose the domestic and imported inputs of production, focusing on the region and industry of origin of the contribution to show how the configuration of the automotive supply chain evolved between 2000 and 2014. The analysis focuses on the four dimensions, i.e. employment, value added, profits and labour compensation, to assess the evolution of the costs of production of the domestic and imported segments of the supply chain. We show that the imported component increases its costs in all countries except Germany, where domestic costs increase faster than imported ones. Notably, this trend can be imputed to the faster increase of the profit component of value added, rather than labour compensation. Second, we decompose the employment participating in the supply chain according to its occupational structure combining input-output data with labour Force Survey data. This analysis shows that there is a generalised upgrading trend in the occupational composition of the automotive supply chain, which involves both domestic and imported labour. |
| Keywords: | Automotive supply chain, Input-Output Analysis, Trade-SCAN, Occupational Structure. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:laedte:202101&r=all |
| By: | David Argente (Pennsylvania State University - Department of Economics); Chang-Tai Hsieh (University of Chicago - Booth School of Business; University of California, Berkeley - Department of Economics; NBER); Munseob Lee (University of California, San Diego - School of Global Policy and Strategy) |
| Abstract: | Cross-country price indexes are crucial to compare living standards between countries and to measure global inequality. An accurate measurement of these price indexes has proven to be a difficult task because of the lack of accurate data on the consumption patterns of different countries. In this paper, we construct a unique data on prices and quantities for consumer packaged goods matched at the barcode-level across two countries, United States and Mexico. We estimate that the Mexican real consumption relative to the United States is larger than previously estimated. We identify heterogeneity in shopping behavior, quality of products, and variety availability as important sources of bias in international price comparisons. |
| Keywords: | Price index, purchasing power parity, international price comparison |
| JEL: | E01 E31 O47 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:bfi:wpaper:2020-123&r=all |
| By: | Paulo de Sa; Jane Korinek |
| Abstract: | A more resource efficient and circular economy will help to decouple global economic growth from natural resource use, decrease environmental degradation and improve energy efficiency. Existing circular economy policies have been largely focused at the national level. However, trade policies can promote greater resource efficiency and circularity by enabling economies of scale in recycling; by ensuring regulatory coherence between different frameworks for recyclable material; and by helping to address the problem of exports to countries without adequate recycling facilities.The vast majority of trade in end-of-life material ‒ waste and scrap ‒ is in metallic material. Recycling metallic waste and scrap means less mining of non-renewable resources, and producing the most commonly used metals from recycled material uses 60-97% less energy than producing them from mined material. Moreover, demand for some minor metals and minerals, such as lithium, cobalt and rare earth elements (REE) used in energy storage, wind turbines and other environmental goods is projected to increase sharply as the global economy strives to become more carbon-neutral. Recycling these low-volume minerals will become urgent. Trade in these recovered materials will be particularly important in order to allow economies of scale for recycling operations as technologies evolve. |
| Keywords: | Energy storage, Export restrictions, Rare earth elements, Raw materials, Recycling, Waste and scrap |
| JEL: | Q1 Q2 Q37 Q38 Q56 |
| Date: | 2021–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:245-en&r=all |
| By: | Tao Wang; Shiying Xiao; Jun Yan; Panpan Zhang |
| Abstract: | A multi-regional input-output table (MRIOT) containing the transactions among the region-sectors in an economy defines a weighted and directed network. Using network analysis tools, we analyze the regional and sectoral structure of the Chinese economy and their temporal dynamics from 2007 to 2012 via the MRIOTs of China. Global analyses are done with network topology measures. Growth-driving province-sector clusters are identified with community detection methods. Influential province-sectors are ranked by weighted PageRank scores. The results revealed a few interesting and telling insights. The level of inter-province-sector activities increased with the rapid growth of the national economy, but not as fast as that of intra-province economic activities. Regional community structures were deeply associated with geographical factors. The community heterogeneity across the regions was high and the regional fragmentation increased during the study period. Quantified metrics assessing the relative importance of the province-sectors in the national economy echo the national and regional economic development policies to a certain extent. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2102.12454&r=all |
| By: | Edoardo Beretta (USI - Università della Svizzera italiana = University of Italian Switzerland); Alvaro Cencini (USI - Università della Svizzera italiana = University of Italian Switzerland) |
| Abstract: | On the basis of the identity between each country's global imports (commercial and financial) and exports (commercial and financial), which is one of the fundamental economic principles of the balance of payments, the paper highlights why and how the leading account of transactions from/to the rest of the world needs to be reformed. As a strategic goal, the balance of payments should finally move beyond its current purely statistical and simple-entry bookkeeping approach in order to improve its macroeconomic relevance. This would also imply a new way of carrying out cross-border payments, which could in turn pave the way for a new system of international payments. The development of an economic account of the nation as a whole and the introduction of a consistent way of recording transactions following a truly double-entry bookkeeping would also erase statistical discrepancies ex ante and reflect the necessary equality (identity) of credits and debits both for all transactions taken together and for each of them separately. The balance of payments is already a powerful economic tool, but only through a money-consistent reform would it display its full potential. |
| Keywords: | balance of payments,double-entry bookkeeping,nation's economic account,reserve assets |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03121404&r=all |
| By: | Karolina Socha-Dietrich (OECD); Jean-Christophe Dumont (OECD) |
| Abstract: | This paper presents the most recent data on the number of migrant doctors in the health workforce in the OECD countries, as well as the impact these regular migration flows have on the countries of origin, including an analysis of the developments since 2000. The objective of this paper is to inform policy dialogue at the national and international levels.The share of migrant doctors has continued to rise over the last two decades across the OECD countries, with around two-thirds of all foreign-born or foreign-trained doctors originating from within the OECD area and upper-middle-income countries. The lower-middle-income countries account for around 30% and low-income countries for 3-4% of the foreign-born and 4% of the foreign-trained doctors. In countries of origin that are large, migration to (other) OECD countries has a moderate impact, but some of the relatively smaller countries or those with weak health systems experience significant losses of (needed) health professionals. |
| Keywords: | migrant doctors |
| JEL: | F22 J61 O15 |
| Date: | 2021–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaad:126-en&r=all |
| By: | Maani, Sholeh A. (University of Auckland); Wen, Le (University of Auckland) |
| Abstract: | Despite evidence that immigrants experience a higher incidence of over-education, relatively few studies have considered the labour market outcomes of over-education for immigrants. Using longitudinal data and penalized quantile panel regression, we inspect the earnings effects of job mismatches for immigrants in Australia. This first application of the method to this question addresses both individual and distributional heterogeneity. Results confirm divergent effects across the earnings distribution. Immigrants from non-English speaking countries experience lower earnings returns and a substantial earnings penalty of up to 25 percent from educational mismatched employment. However, in contrast to conventional findings of a penalty based on regression at the mean, at the highest earnings quantile, both Australian-born and immigrants from non-English speaking countries with a host country qualification receive earnings premiums of 2.7 and 11 percent, respectively, from years of over-education. We discuss the policy implications of this new result. |
| Keywords: | penalized panel quantile regression, over-education, immigrants, overseas qualifications, language proficiency |
| JEL: | C23 I21 J24 J31 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14088&r=all |
| By: | Swinnen, Johan; Kuijpers, Rob |
| Abstract: | The rapid transformation of agri-food value chains in Africa and other developing countries hasimportant implications for economic growth and poverty reduction. Policy makers increasinglyrecognize this but there is a need for a better understanding of what value chain transformationentails and what the main policy options are. This paper provides an overview and analysis ofdifferent value chain models that have emerged in the past decades and reviews the literatureon the main development implications. We discuss and categorize existing policy initiativesthat aim to stimulate inclusive value chain development. Based on this review we identifylessons and implications for policy makers. |
| Keywords: | value chain; farmer; fresh fruit and vegetable; access to bank loan; Political Economy; change in consumer demand; private sector development programs; reduction of transaction costs; effects of policy changes; impact on poverty reduction; Fruit and Vegetable Export; supply of raw material; limited access to capital; investment in transition country; access to finance; vertical coordination |
| Date: | 2020–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:jbsgrp:31809214&r=all |