nep-int New Economics Papers
on International Trade
Issue of 2022‒05‒16
forty-four papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. The Heterogeneous Effect of Uncertainty on Firms Trade Margins Destruction and Diversion By Mustapha Douch; Jun Du; Enrico Vanino
  2. The impact of Covid-19 on global value chains By Simola, Heli
  3. An overview of China's regional trade agreements By Lintunen, Julia
  4. Employment implications of India’s international trade – A macro view based on Input-Output analysis By Tandon, Anjali
  5. Effects of Product-Specific Rules of Origin on Trade in Free Trade Agreements: Evidence from the Cases of Japan and the U.S. By ANDO Mitsuyo; URATA Shujiro; YAMANOUCHI Kenta
  6. Disability, Empathy and Trade: Evidence from Small-Scale Cross-Border Transactions in Uganda By Walkenhorst, Peter
  7. The Economic Impact of Deepening Trade Agreements By Lionel Gérard Fontagné; Nadia Rocha; Michele Ruta; Gianluca Santoni
  8. CBAM! - Assessing potential costs of the EU carbon border adjustment mechanism for emerging economies By Simola, Heli
  9. SME Related Provisions in Free Trade Agreements – An Analysis of India’s Strategic Focus By Tandon, Anjali
  10. The (Non-)Neutrality of Value-Added Taxation By Georg Schneider; Frank Stähler; Georg U. Thunecke
  11. Differential Growth Impact of FDI on LICs, LMICs, and ECs: The Role of Absorptive Capabilities By Pravakar Sahoo; Ranjan Kumar Das
  12. Gravity at Sixty: The Workhorse Model of Trade By Yoto V. Yotov; Yoto V. Yotov
  13. The Effects of Institutions on the Relationship between Politics and Trade By Samuel HARDWICK; Shiro ARMSTRONG
  14. The Effect of Brexit on British Workers Living in the EU By Ana Venâncio; João Pereira dos Santos
  15. The Impacts of the Dollar-Renminbi Exchange Rate Misalignment on the China-United States Commodity Trade: An Asymmetric Analysis By Ferjani, Sabrine; Saafi, Sami; Nouira, Ridha; Rault, Christophe
  16. Technology Transfer in Global Value Chains By Thomas Sampson
  17. Understanding structural effects of COVID-19 on the global economy: First steps By Christine Arriola; Przemyslaw Kowalski; Frank van Tongeren
  18. Import Competition from China and Markup Dispersion By HAYAKAWA Kazunobu; URATA Shujiro; YAMANOUCHI Kenta
  19. China's New Trade Strategy amid US-China Confrontation and Implications By Hyun, Sang Baek; Yeon, Wonho; Na, Su Yeob; Kim, Young Sun; Oh, Yun Mi
  20. IMPACT OF OUTWARD FDI: Evidence from Emerging Economies for Policy By Pravakar Sahoo; Ashwani Bishnoi
  21. The Export of High Knowledge Intensity Services of European Countries By LEOGRANDE, ANGELO
  22. EU Strategic Autonomy: Industry Implications in the Changing World Trade Order. By Gérard Pogorel
  23. China shock on Japanese firms: Firms’ differential reactions to the increase in Chinese imports By ITO Tadashi; MATSUURA Toshiyuki
  24. A Minimalist Model for the Ruble During the Russian Invasion of Ukraine By Guido Lorenzoni; Iván Werning
  25. Export Performance: A Study of Labour and Capital Intensive Manufacturing Industries in India By Sonali Madhusmita Mohapatra
  26. Will Putin's Ukraine war provoke famine and upheaval in Africa? By Kohnert, Dirk
  27. COVID-19 and Global Value Chain By Han, Hyoungmin
  28. Abundance from Abroad: Migrant Income and Long-Run Economic Development By Gaurav Khanna; Emir Murathanoglu; Caroline B. Theoharides; Dean Yang
  29. The impact of Russian presence in Africa By Kohnert, Dirk
  30. Making FTAs more inclusive – A case for promoting SMEs in India By Tandon, Anjali
  31. Finance, Trade, Man and Machines: A New-Ricardian Heckscher-Ohlin-Samuelson Model By Sugata Marjit; Gouranga Gopal Das
  32. The Effects of Increased Trade with China and Vietnam on Workers’ Earnings and Job Security in Korea By Koo, Kyong Hyun
  33. The spillover effect of neighboring port on regional industrial diversification and regional economic resilience By Jung-In Yeon; Sojung Hwang; Bogang Jun
  34. Cutting Putin’s Energy Rent: 'Smart Sanctioning' Russian Oil and Gas By Ricardo Hausmann; Agata Łoskot-Strachota; Axel Ockenfels; Ulrich Schetter; Simone Tagliapietra; Guntram Wolff; Georg Zachmann
  35. European industry responds to high energy prices: The case of German ammonia production By Stiewe, Clemens; Ruhnau, Oliver; Hirth, Lion
  36. Supply Chains and Port Congestion Around the World By Mr. Diego A. Cerdeiro; Andras Komaromi; Yang Liu
  37. Analysis of the Healthcare Sector in Africa and Its Policy Implications for Korea By Park, Young Ho; Kang, Munsu; Kim, Yejin Anna; Park, Kyu Tae; Choi, Young-Chool
  38. Assessing structural coherence with factor proportions of tradable sectors in Indian economy By Tandon, Anjali
  39. DO DIFFERENT TYPES OF CAPITAL INFLOWS HAVE DIFFERENTIAL IMPACT ON OUTPUT? Evidence from Time series and Panel Analysis By Bhavesh Garg; Pravakar Sahoo
  40. Impacts of the war in Ukraine on Malawi By De Weerdt, Joachim; Duchoslav, Jan
  41. Shipping Costs and Inflation By Davide Furceri; Mr. Yan Carriere-Swallow; Mr. Pragyan Deb; Daniel Jimenez; Mr. Jonathan David Ostry
  42. Performance of the Chinese energy market in times of Russian military interventions By Tapia, Pablo; Pastén, Boris; Sepulveda Velasquez, Jorge
  43. Can fair trade resolve the “hungry farmer paradox”? By Ninon Sirdey; Sylvaine Lemeilleur
  44. Global cropland could be almost halved: Assessment of land saving potentials under different strategies and implications for agricultural markets By Schneider, Julia M.; Zabel, Florian; Schünemann, Franziska; Delzeit, Ruth; Mauser, Wolfram

  1. By: Mustapha Douch (University of Edinburgh, Business School, Edinburgh, UK.); Jun Du (Aston Business School and Centre for Business Prosperity (CBP), UK); Enrico Vanino (University of Sheffield, Dept. of Economics, UK)
    Abstract: Uncertainty over future tariff schedules and customs arrangements is a key factor in defying firms’ participation in international markets. This paper investigates firm heterogeneity in the effects of trade policy uncertainty on the margins of trade, exploiting the Brexit process as a quasi-natural experiment and using transaction-level trade data for UK firms. Comparing UK trade flows to the EU and extra-EU countries, and the variations of product-specific tariff threats along firm size, our results show an overall reduction in UK-EU trade flows in respect with extra-EU markets, as uncertainty regarding future trade policies increased during the post-Brexit referendum negotiations. This is the result of two contemporaneous effects: a destruction of trade flows for smaller firms more exposed to uncertainty and potential tariffs, while a consolidation and diversion of trade flows, in particular towards more distant and emerging extra-EU markets, for larger firms. Falsification tests and alternative identification strategies corroborate the robustness of the main findings.
    Keywords: policy uncertainty; trade diversion; trade destruction; trade margins; firm heterogeneity; Brexit
    JEL: F02 F13 F14 F15 F61 F68
  2. By: Simola, Heli
    Abstract: The Covid-19 pandemic has hit international trade hard, creating concerns of serious disruptions to global value chains (GVCs). This paper provides a preliminary analysis on the development of GVC trade during the current crisis with a focus on the internal and external trade of the EU. The potential consequences of the pandemic and other key factors for GVCs are discussed on the basis of a review of recent literature. We find that trade overall has been hit hard by the pandemic, but not GVC trade in particular. The sector of transport equipment makes a notable exception. Our analysis suggests that the Covid-19 crisis will not necessarily lead to a major restructuring of GVCs, but could fortify several trends shaping GVC development. While several factors limit future expansion of GVCs, the requisite complexity and high restructuring costs of existing GVCs make it unlikely that they will be dismantled anytime soon.
    Keywords: Global value chains,International trade,Covid-19
    Date: 2021
  3. By: Lintunen, Julia
    Abstract: Since becoming a WTO member in 2001, China has negotiated numerous regional trade agreements with astonishing speed. This paper provides an overview of China's current free trade agreements and examines the economic importance of two major Asian regional trade agreements for China. The academic literature often treats China's free trade agreements as driven more by political, rather than economic, interests. The agreements are seen as shallow and concluded with minor economic partners. In fact, China's approach to trade agreements has evolved over time and cumulative impact of these agreements has been positive for trade between China and its agreement partners. The recently concluded Asian regional free trade agreement, the Regional Comprehensive Economic Partnership (RCEP), should positively influence trade for both China and other participating Asian countries. China could also benefit economically from joining the other major regional trade agreement, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
    Keywords: trade policy,free trade agreements,RCEP,CPTPP
    Date: 2021
  4. By: Tandon, Anjali
    Abstract: Often trade policy of a country is evaluated for its employment effect and a liberal import policy is criticised for its adverse impact on domestic employment in a more explicit manner. However, for reasons such as low worker reallocations due to trade and employment creation from a concomitant export expansion, what bears relevance for employment outcomes is the aggregate effect, and not the sector-level effects of trade. In this paper, we focus on the aggregate employment effects of trade by accounting for the interdependencies among sectors of the economy. We make use of the Input-Output model and integrate the Reidel’s method to account for differential employment intensity of exports and imports and also the import-sourcing countries; to improve precision of the estimated employment effect of trade in Indian economy. Computations show that employment intensity of exports continues to remain higher than of the imports; suggesting the employment potential of the aggregate exports in the economy. At an aggregate level, the proportion of export supported employment has more than doubled over a period of two decades. On the import front, the proportion of employment forgone has more than trebled. While the net trade generated an employment surplus during 1993-94, an employment deficit is observed during 2013-14. The employment foregone due to imports has increased faster than the employment supported by exports. The analysis in the paper registers increasing employment opportunities foregone at an aggregate level as a net effect of trade. Under an aggressive liberalisation, two opposing forces have been in place. Greater exports support more employment, while higher imports have costed employment in the domestic economy. The relative employment intensity of exports underscores their role in employment generation and hence the continued impetus. On the import front, the increasing employment forgone noted from the analysis, as also through its stronger indirect impact should not be interpreted to advocate for (continued or higher) import protection in the long run. Past experiences have shown that import protection through a trade policy, without an industrial policy in place, can be only a temporary guard for employment. Although raising tariffs can be a source of interim employment relief, an industrial policy must be used in parallel to strengthen the domestic industry. Also, not only are the indirect employment effects stronger, they can also be more complicated to address due to their embodied effects (which are manifested through inter-sector linkages) which are generally difficult to track explicitly. This highlights that any shocks in the external sector would have employment affects on the upstream supplier and downstream buyer sectors. And, that such effects are relatively stronger on the import side. It must be made explicit here that the present paper does not related the trade deficit as the cause of a corresponding employment deficit. However, few suggestions have been brought forward to strengthen employment opportunities from trade.
    Keywords: Trade, Employment effect, Input-Output, India
    JEL: D24 D57 F1 O1
    Date: 2022–01
  5. By: ANDO Mitsuyo; URATA Shujiro; YAMANOUCHI Kenta
    Abstract: This paper investigated the impact of product-specific rules of origin (ROOs) in free trade agreements (FTAs) on both exports and imports for 17 Japanese FTAs and 12 U.S. FTAs. Specifically, the effects of FTAs on trade were first estimated by trading partners and products at the finely disaggregated level, using data from 170 countries in 1996–2019, and then the impact of ROOs was analyzed as a determinant of the effects of FTAs. Our descriptive analysis shows that while ROO patterns vary widely among Japanese FTAs, there are basically only two patterns for the U.S. FTAs, and that major ROO types differ between the two countries. Our econometric analysis demonstrates that change in chapters (CC) is more restrictive than change in tariff sub-headings (CTSH) in several cases of both exports and imports of the two countries. In the case of Japan’s exports, compared with CTSH, CC is most restrictive, followed by change in tariff headings (CTH), and the selective combination of change in tariff classification (CTC) with regional value content (RVC) (“CTC or RVC†) is less restrictive than the corresponding single type of CTC, while the impact depends significantly on the CTC rules. Our findings suggest that more restrictive types of ROOs reduce the positive effects of FTAs on trade.
    Date: 2022–04
  6. By: Walkenhorst, Peter
    Abstract: Small-scale cross-border trade is ubiquitous in Africa. This paper uses disaggregated trade data to assess the determinants of the product portfolio of different groups of small-scale traders at the border between Uganda and Kenya. Using a weighted fractional response model, it finds that wheelchair-bound traders have a significantly higher propensity to handle products that are subject to high protection than other traders. This result suggests that border officials discriminate in favor of traders with disability in the enforcement of trade policies or the solicitation of bribes. More generally, the findings question the effective implementation of preferential trade agreements in Africa and call for trade policy reforms to be complemented by targeted measures to reduce the hardship faced by vulnerable groups within the population.
    Keywords: Informal cross-border trade; compassion; economic rents
    JEL: F14 F15 O17
    Date: 2021–12
  7. By: Lionel Gérard Fontagné; Nadia Rocha; Michele Ruta; Gianluca Santoni
    Abstract: This paper explores the economic impacts of preferential trade agreements, conditional on their level of ambition. We cluster 278 agreements, encompassing 910 provisions over 18 policy areas and estimate the trade elasticity for the different clusters. We then use these elasticities in a series of general equilibrium counterfactual situations for endowment economies, revealing that deepening existing agreements (the intensive margin of regional integration) could boost world trade by 5 percent and world GDP by 1 percent. The expected gains from deepening agreements within or across regions vary depending on the initial depth of agreements and the size of regional markets.
    Keywords: preferential trade agreements, deep integration, structural gravity, general equilibrium
    JEL: F14 F15
    Date: 2022
  8. By: Simola, Heli
    Abstract: With the EU adopting more ambitious emission reduction targets this year, the European Commission in July published a proposal on measures for adjusting EU climate policy. Measures include a carbon border adjustment mechanism (CBAM) that imposes a price on emissions embodied in products imported to the EU. In this policy note, we review the main lines of the CBAM proposal and discuss its potential economic effects on China, India, Russia, Turkey and Ukraine – the EU's largest import sources for products subject to CBAM. We calculate illustrative estimates for the potential cost effectsof several specifications of the CBAM for these countries and compare them against earlier estimates. We also discuss the potential aggregate economic effects of the CBAM for these economies based on earlier literature. Despite considerable variation across countries and sectors, our analysis suggests that the aggregate economic effects of the CBAM would be limited for most exporting countries.
    Keywords: carbon border adjustment mechanism,climate policy,international trade,emerging economies
    Date: 2021
  9. By: Tandon, Anjali
    Abstract: In the backdrop of the increasing government emphasis on strengthening the domestic and international participation of the small and medium enterprises (SMEs), this paper presents a review of the SME related provisions that have been incorporated into the free trade agreements (FTAs) signed by countries, including India. A comparative approach has been used to bring out the difference in strategic focus adopted by India vis-à-vis other countries. The review of the trade agreements informs that the SME related provisions are not very prevalent, more so in the Indian context. Only about half of the 60 plus trade agreements reviewed are observed to include SME specific arrangements. These provisions are mostly non-binding and of an endeavouring nature, putting the onus on the host country to initiate and benefit from the stated activities of cooperation and similar mechanisms for better opportunities for the SMEs. By comparison with other countries, most FTAs signed by India are either silent on SMEs or lack aggression. India’s emphasis on transparency is minimal in comparison to the inclusion of a cooperation clause in the text of the agreements. The absence of an SME focus in trade agreements indicates that smaller enterprises have been considered at par with other businesses, thus ignoring their exceptional needs and the handholding that might be required for their greater and faster internationalisation. Although it can be argued that the mere existence of an SME related provision may not necessarily result in better opportunities, it is important to highlight the emphasis on SMEs in the text of the agreements, as pursued by other countries.
    Keywords: small and medium enterprises; SMEs; free trade agreements; FTAs; international trade; India.
    JEL: F1
    Date: 2021–10
  10. By: Georg Schneider; Frank Stähler; Georg U. Thunecke
    Abstract: This paper employs a structural gravity model and novel value-added tax (VAT) regime data to investigate the impact of VAT rate changes on imports and domestic production of final goods. We demonstrate that the VAT is both non-neutral and discriminatory. A one percentage point VAT increase reduces aggregate imports and internal trade by 3.05% and implies a 5.4 to 7.9% reduction of foreign imports relative to internal trade. Based on these results we conduct a counterfactual equilibrium analysis and illustrate that VAT rate changes imply substantial welfare effects for an average country in the European Union.
    Keywords: structural gravity, value-added taxation, neutrality, discrimination
    JEL: F10 F14 H22
    Date: 2022
  11. By: Pravakar Sahoo; Ranjan Kumar Das (Institute of Economic Growth, Delhi)
    Abstract: FDI has been beneficial to developing countries through increased access to capital, technology, foreign markets, superior managerial skills, and other backward and forward spillover effects. However, the developmental implications of FDI are dependent on the absorptive capabilities and levels of development. In this context, we scientifically examine the impact of FDI on economic growth for 93 developing countries for the period 2000-2017. The strength of this comprehensive study lies in the nuance that it adds to the current discussion by analyzing the differential impacts of FDI inflows across different types of developing countries such as emerging countries(ECs), lower-middle-income countries (LMICs), and low-income countries (LICs). Unlike previous studies, we investigate the particular channels through which positive spillovers from FDI are transmitted towards the growth of these different country categories. The results reveal that the beneficial impact of FDI varies across different country groups. Thus, the efficacy with which FDI positively impacts growth is contingent upon the absorptive capacities of developing countries, which in turn are determined by trade openness, stock of human capital, infrastructure, financial sector development, institutional setup, and foreign debt.
    Keywords: FDI, economic growth, LICs, LMICs, ECs, developing countries, panel data, GMM model
    JEL: C51 F21 F23 F62 O11
    Date: 2021–11
  12. By: Yoto V. Yotov; Yoto V. Yotov
    Abstract: On the eve of its 60th anniversary, the gravity model of trade is a ‘celebrity’, due to its intuitive appeal, solid theoretical foundations, and remarkable empirical success. Yet, many economists still view gravity simply as an intuitive but naive reduced-form estimating equation and apply it without guidance from theory, while others are skeptical about its usefulness for counterfactual projections. The objective of this paper is to offer a historical overview of its evolution from an a-theoretical application to an estimating computable general equilibrium (E-CGE) model, which can be nested in more complex frameworks. Along the way, I address some misconceptions about the gravity model, summarize the current best practices for gravity estimations, and highlight some properties that have made gravity so successful.
    Keywords: structural gravity, evolution, theory, estimation general equilibrium
    JEL: F13 F14 F16
    Date: 2022
  13. By: Samuel HARDWICK; Shiro ARMSTRONG
    Abstract: This paper examines the relationship between trade and the ups and downs of political relations between countries, and how institutional arrangements might affect that relationship. An index of ‘political distance’ between countries is constructed using high-frequency events data. After showing that monthly data, rather than quarterly or annual data, better reflects the time horizon of political shocks to trade, we estimate a set of structural gravity models using monthly panel data. We find that WTO membership, democratic political systems and strong domestic governance institutions are associated with a reduced impact of political vagaries on trade between countries. Joint WTO membership is associated with a weaker relationship between politics and trade, including for non-democratic trading partners. This WTO effect is stronger when recent years (2017 to 2021) characterized by global trade uncertainty are excluded from the sample.
    Date: 2022–04
  14. By: Ana Venâncio; João Pereira dos Santos
    Abstract: The effect of Brexit is an important topic in the European and British political agendas. This study examines the perspective of the EU countries, with regards how British citizens working in an EU country reacted to the end of free movement of workers. Employing synthetic control methods and using data from Portugal, we estimate how the behaviour of UK citizens working in Portugal would have evolved if the Remain vote had won the referendum. Our results suggest that the Brexit referendum reduced the number of UK citizens working in Portugal, particularly in the case of non-university educated, male individuals with temporary employment contracts. This reduction is explained by the decrease in the number of incomers. We also find that those UK citizens who were already working in Portugal before Brexit are less likely to leave the country.
    Keywords: Brexit, employment, migration
    JEL: J10 J61 J68
    Date: 2022
  15. By: Ferjani, Sabrine (University of Sousse); Saafi, Sami (University of Sousse); Nouira, Ridha (University of Sousse); Rault, Christophe (University of Orléans)
    Abstract: Contrary to most existing studies of the literature that assumed that the effects of real exchange rate (RE) misalignment on trade flows are symmetric, this paper considers a more general and realistic framework allowing for possible asymmetric effects. We use monthly time-series data over the January 2002-October 2020 period from 66 two-digit industries that trade between China and the U.S. in order to avoid the well-known aggregation bias. Estimates of symmetric error-correction models (ECM) revealed that real dollar-renminbi rate misalignment has short-run effects on 35 U.S. exporting and 53 U.S. importing industries. These short-run effects translated into the long run in 18 and 17 industries, respectively. The numbers increased considerably when estimating asymmetric ECM. Indeed, short-run asymmetric effects were then found in 47 U.S. exporting and 62 U.S. importing industries, which translated into long-run asymmetric effects in 20 U.S. exporting and 21 U.S. importing industries. Our analysis highlights the importance of separating currency overvaluation from currency undervaluation in assessing the effects of the RE misalignment on trade flows between the U.S. and China and confirms that the impacts are industry specific. Our findings (robust to possible structural breaks) are useful for trading industries, and policymakers, and advocate accounting for asymmetries when examining the RE misalignment-trade flows nexus.
    Keywords: asymmetry, nonlinear ARDL, exchange rate misalignment, commodity trade, China, the United States
    JEL: F14 F31 C10
    Date: 2022–04
  16. By: Thomas Sampson
    Abstract: Firm-to-firm relationships in global value chains create opportunities for North-South technology diffusion. This paper studies technology transfer in value chains when contracts are incomplete and input production technologies are imperfectly excludable. The paper introduces a new taxonomy of value chains based on whether or not the headquarters firm benefits from imitation of its supplier’s technology. In inclusive value chains, where imitation is beneficial, the headquarters firm promotes technology diffusion. By contrast, in exclusive value chains headquarters seeks to limit supplier imitation. The paper analyzes how this distinction affects the returns to offshoring, the welfare effects of technical change and the social efficiency of knowledge sharing. Weaker intellectual property rights over input production technologies raise welfare when value chains are inclusive, but have the opposite effect under exclusive value chains.
    Keywords: technology transfer, global value chains, incomplete contracts, intellectual property rights, imitation
    JEL: D23 F10 F23 O34
    Date: 2022
  17. By: Christine Arriola; Przemyslaw Kowalski; Frank van Tongeren
    Abstract: The COVID-19 pandemic and associated policy responses are likely to alter the global economy in a way that affects its ability to adjust to future shocks and changes. This paper develops a point of reference for thinking about developments which could be deemed long-term and which could in turn be incorporated into what we call a “post-COVID-19 baseline”. Using the OECD’s CGE model METRO, the paper finds that output declines observed in 2020 were driven primarily by reductions in labour productivity due to varying abilities to telework across countries. Negative economic impacts were largely mitigated by government support to firms and households. Border measures to control the spread of the virus also had less of an impact on total output, reflecting important government efforts to facilitate cross border flows of goods and services whilst managing cross border movements of people. Demand shifts had the smallest impact on global GDP, but had significant and heterogeneous impacts on consumption, output and trade changes across countries and sectors. This in turn contributed to pressures on some global supply chains.
    Keywords: general equilibrium model, shocks, trade
    JEL: F14 F17 C68
    Date: 2022–05–06
  18. By: HAYAKAWA Kazunobu; URATA Shujiro; YAMANOUCHI Kenta
    Abstract: In this study, we explore the impacts of import competition from China on Japan's manufacturing industry. Specifically, we focus on the effects on markup dispersion from the perspective of resource allocation. We first show that the markups and prices of the plants in Japan are negatively affected by the import competition from China. The negative effect is specific to the imports from China and not observed for the import competition from other countries. Second, we found that while non-Chinese import competition reduces the markup dispersion, Chinese import competition has no effects on the dispersion of the markups. The import competition from China is relatively stronger for relatively low-markup plants and forces them to lower their markups further. While consumers can enjoy the lower markups or prices, allocation efficiency may not be improved by the import competition from China.
    Date: 2022–04
    Abstract: In 2021, China has reached the point of entering a new stage of socialist development by declaring the achievement of the goal of building ‘a comprehensive well-off society’. Since the reform and opening up of China, the paradigm of economic and social development is facing the greatest turning point from ‘getting rich first’ to ‘common prosperity’. As the US checks on China intensify during this period of economic transition in China, China is pursuing a new trade strategy to respond to it. In order to understand the changes in the global trade environment in the era of the US-China conflict, it is necessary to understand both the US checks with China and China's trade strategy to respond to them. Most of the recent US-China conflicts are analyzed from the perspective of the US checking in with China, but it is necessary to take a balanced look at what kind of countermeasures China is seeking in order to correctly forecast and prepare for changes in the global trade environment in the future.
    Keywords: China; US-China conflict; trade strategy
    Date: 2022–03–23
  20. By: Pravakar Sahoo; Ashwani Bishnoi (Institute of Economic Growth, Delhi)
    Abstract: The study makes an attempt to contribute to the ongoing policy debate on whether OFDI has a complementary or substitution effect on domestic investment and hence, growth. For the purpose, the current paper uses panel data analysis to understand the impact of OFDI for 14 emerging economies in the period 1981-2019. We supplement the cross-country evidence with a time series analysis for India, given that FDI outflows from the country have been steadily increasing over the years. The results confirm the positive effect of OFDI on economic growth, but the substitution effect for domestic investment. This indicates that the OFDI positively affects growth through its effect on trade and other positive spillover effect, rather than domestic investment. However, in case of India, the findings support the complementary effect of OFDI on domestic investment.
    Keywords: OFDI, Growth, Domestic Investment, Emerging Countries, India
    JEL: F21 F23 F62 O40 R11
    Date: 2021–07
    Abstract: The European Innovation Scoreboard-EIS calculates the export value of knowledge-intensive services produced in Europe. By knowledge-intensive services we mean a set of activities ranging from sea and air transport to financial services, the use of intellectual property, telecommunications, and audiovisual services. The value is considered as a percentage ratio with respect to the complex value of the exports of services.
    Keywords: Innovation, and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Diffusion Processes; Open Innovation.
    JEL: O3 O30 O31 O32 O33 O34
    Date: 2022–04–18
  22. By: Gérard Pogorel (ECOGE - Economie Gestion - I3, une unité mixte de recherche CNRS (UMR 9217) - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique - X - École polytechnique - Télécom ParisTech - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres, IP Paris - Institut Polytechnique de Paris, SES - Département Sciences Economiques et Sociales - Télécom ParisTech)
    Abstract: Concurrent factors are rapidly reshaping our vision of the international economy: the COVID-19 pandemic and its impact on industries and value chains; the growth and growing assertiveness of China; and the United States' redefinition of its role in the various regions of the world. How do these major factors affect the present and future of the EU and what are the implications for its policies? This paper analyses the main characteristics of European strategic autonomy in the wider context of the economic and social changes observed in international trade and international relations, in order to better understand what strategic autonomy means for European democracy.
    Keywords: International trade,Strategic sovereignty,Strategic autonomy
    Date: 2021
  23. By: ITO Tadashi; MATSUURA Toshiyuki
    Abstract: This study investigates the impact of import competition from China, using the firm/establishment level data from the Census of Manufacturer with a particular focus on firms’ choice of multiple reactions. We find that product switching is an important reaction for firms facing increasingly harsh competition with imports from China. Firms tend to choose, first, employment adjustment only, and then with stronger import competition, product switching only, and finally, both of employment adjustment and product switching as import competition from China increases.
    Date: 2022–04
  24. By: Guido Lorenzoni; Iván Werning
    Abstract: This note isolates an overlooked economic force for the Ruble to appreciate in response to international sanctions limiting exports to Russia. The economic intuition is that when Russians are unable to buy the mix of foreign goods they wish, then foreign goods becomes less attractive, increasing the demand for domestic goods; to reestablish an equilibrium a real appreciation is needed to raise the relative price of domestic goods and incentivizing the accumulation of foreign assets and the import from non-sanctioning countries. We also review well-known forces for a depreciation (e.g. Russian export reduction). Our analysis emphasizes that the exchange rate is an inadequate signal of welfare impacts and the effectiveness of sanctions.
    JEL: E0 F3 F31 F4 F51
    Date: 2022–04
  25. By: Sonali Madhusmita Mohapatra (Institute of Economic Growth, Delhi)
    Abstract: This paper makes an attempt to explore the export performance and its determinants of labour and capital intensive industries of Indian manufacturing sector for the period of 2004 to 2019. The paper found that the labour-intensive industries are more export-oriented than capital intensive industries. Foreign share, research and development and real effective exchange rate have a positive relationship with the export performance of most of the industries classified under both labour and capital-intensive industry groups. On the other hand, the inverted U shape relation has been found between firm size and export performance. From the policy point of view, the paper suggests that developing export policies for certain industries could help to protect or uphold the export performance of manufacturing sector.
    Keywords: export performance, manufacturing industries, capital-intensive, labour-intensive,foreign share, research and development, size
    Date: 2021–10
  26. By: Kohnert, Dirk
    Abstract: Famines are almost always man-made often used as a deterrent. Since ancient times, food and hunger have been a weapon of war. Among the most notorious examples in Africa are the Herero and Namaqua genocide in German South-West Africa (now Namibia) from 1904 to 1908. It was the first genocide of the 20th century. Also, the subsequent famines in Biafra (South-East Nigeria, 1967-1969), when an estimated 1.5 million people starved to death, the 1980 famine in Uganda, one of the worst in African history, when 21% of the population died, and the recurring famines in Ethiopia, Somalia and South Sudan since the 1990s have been burned into human memory. The use of food as a weapon was condemned as a war crime by the Rome Statute of the International Criminal Court in 1998. Since most African countries are Least Developed Countries (LLCs), they will suffer the hardest in the aftermath of Putin's war in Ukraine, especially Africa's poor. They have already suffered the consequences of drought, the corona pandemic and Islamist terrorism. Their already weakened position will be exacerbated by the spill-over effects of Russian aggression in Ukraine, which will further exacerbate hunger and poverty in Africa. All the more so as international development aid to Africa is likely to suffer from a massive redirection of aid to rearmament. Last but not least, Putin's war in Ukraine will have a major impact on EU-Africa relations. In view of the consequences of the Covid-19 pandemic for Africa, it will further damage the mutual trust between both partners. About 86% of Africans have yet to receive two doses of vaccine. A growing number of African heads of state and government no longer see Western countries as reliable partners.
    Keywords: : Russia, invasion, Ukraine, Africa, famine, international trade, global power, food power, arms deals, fragile state, Islamist terrorism, Egypt, Morocco, Algeria, Tunisia, Libya, South Africa, Cameroon, Mozambique, Ethiopia, Kenya, Uganda, Somalia, Namibia, Nigeria, Sudan, energy security, China, EU, USA
    JEL: E26 E31 F02 F13 F35 F51 F54 H56 N47 N57 N77 P26 Q17 Z13
    Date: 2022–04–14
    Abstract: The ongoing spread of COVID-19 has increased biological risks from infectious diseases and limits the movement of human and material resources. Various evidence supports that there is a significant correlation between COVID-19 and the globalized production network. This study aims to analyze the changes in the global value chain structure “before and after” the spread of COVID-19 and derive government-level countermeasures and policy tasks using quantitative data, empirical analysis, case study, and corporate survey.
    Keywords: COVID-19; GVC; global value chain structure
    Date: 2022–03–17
  28. By: Gaurav Khanna; Emir Murathanoglu; Caroline B. Theoharides; Dean Yang
    Abstract: How does income from international migrant labor affect the long-run development of migrant-origin areas? We leverage the 1997 Asian Financial Crisis to identify exogenous changes in international migrant income across regions of the Philippines, derived from spatial variation in exposure to exchange rate shocks. The initial shock to migrant income is magnified in the long run, leading to substantial increases in income in the domestic economy in migrant-origin areas; increases in population education; better-educated migrants; and increased migration in high-skilled jobs. Four-fifths of long-run income gains are actually from domestic (rather than international migrant) income. A simple structural model yields insights on mechanisms and magnitudes, in particular that one-fifth of long-run income gains are due to increased educational investments in origin areas. Increased income from international labor migration not only benefits migrants themselves, but also fosters long-run economic development in migrant-origin areas.
    JEL: F22 J24 O15 O16
    Date: 2022–03
  29. By: Kohnert, Dirk (GIGA - German Institute of Global and Area Studies, Hamburg)
    Abstract: ABSTRACT & RÉSUMÉ : Putin attaches great importance to rebuilding Russia as a world power, including relations with Africa. But while the Soviet Union used to advocate socialist modernization in Africa, Moscow no longer offers socialist ideologies. Instead, it focuses on access to African elites, particularly authoritarian leaders. It also seeks to sway elections in its favour, particularly in fragile but resource-rich states. The Kremlin says it wants to avoid competing directly with other powers active in Africa. Instead, it wants to focus on countries where neither the West nor China dominates. There it expects to be able to work more effectively. But Russia, like China, is challenging Western norms, undermining US and EU sanctions. In addition, both strategic partners support non-interference in the internal affairs of states. In addition, Russia's relations with Africa have been motivated significantly by its interest in African resources and security markets. Russia's resurgence in Africa benefits not least from Islamist terrorism, for example, in the Sahel and Mozambique. It uses fragile states and ongoing conflicts to secure lucrative arms deals and mining concessions. Moscow signed military cooperation agreements with 21 African governments, including negotiations on establishing military bases. It uses paramilitary contractors to manipulate the course of local conflicts in its favour. Since 2015, Russian-African trade has doubled to around USD 20 billion per year. Russia exported $14 billion worth of goods and services and imported about $5 billion worth of African products. In return, Moscow can count on the support of African leaders in foreign policy. Thus, Eritrea voted against a UN General Assembly resolution strongly condemning Russia's war in Ukraine. 18 other African countries abstained, including Mali, Mozambique, Angola and South Africa. RÉSUMÉ : Poutine attache une grande importance à la reconstruction de la Russie en tant que puissance mondiale, y compris les relations avec l'Afrique. Mais alors que l'Union soviétique prônait la modernisation socialiste en Afrique, Moscou ne propose plus d'idéologies socialistes. Au lieu de cela, il se concentre sur l'accès aux élites africaines, en particulier les dirigeants autoritaires. Il cherche également à influencer les élections en sa faveur, en particulier dans les États fragiles mais riches en ressources. Le Kremlin dit vouloir éviter de concurrencer directement les autres puissances actives en Afrique. Au contraire, il veut se concentrer sur les pays où ni l'Occident ni la Chine ne dominent. Là, il s'attend à pouvoir travailler plus efficacement. Mais la Russie, comme la Chine, défie les normes occidentales, sapant les sanctions américaines et européennes. En outre, les deux partenaires stratégiques soutiennent la non-ingérence dans les affaires intérieures des États. En plus, les relations de la Russie avec l'Afrique sont fortement influencées par son intérêt pour les ressources africaines et les marchés de la sécurité. La résurgence de la Russie en Afrique profite notamment du terrorisme islamiste, par exemple au Sahel et au Mozambique. Il utilise les États fragiles et les conflits en cours pour obtenir des contrats d'armement lucratifs et des concessions minières. Moscou a signé des accords de coopération militaire avec 21 gouvernements africains, y compris des négociations sur l'établissement de bases militaires. Il utilise des sous-traitants paramilitaires pour manipuler le cours des conflits locaux en sa faveur. En retour, Moscou peut compter sur le soutien des dirigeants africains en matière de politique étrangère. Ainsi, l'Érythrée a voté contre une résolution de l'Assemblée générale des Nations unies condamnant fermement la guerre de la Russie en Ukraine. 18 autres pays africains se sont abstenus, dont le Mali, le Mozambique, l'Angola et l'Afrique du Sud.
    Date: 2022–03–26
  30. By: Tandon, Anjali
    Abstract: A dedicated support for SMEs through imparting information as well as addressing their concerns will not only improve prospects for SMEs, but will also contribute to greater utilization of the FTAs. While integrating into GVCs, standard compliance does not come easy due to lack of information and the additional costs imposed. The participation of SMEs in trade needs to be improved and strengthened through focussed interventions. With this view, a detailed review of the related provisions in the existing agreements provides useful leads through the mechanisms used. Although some FTAs with India as partner have SME related provisions, most others are silent on SMEs. In some cases, this is in sharp contrast to the presence of thorough provisions in the FTAs negotiated between (India’s) partner country and a third country. With forethought for bringing domestic SMEs in close contact with partner governments and business, recommendations are made for consideration while negotiating future FTAs.
    Keywords: paperless trade; information asymmetry; small and medium enterprises
    JEL: F13 F15 L15
    Date: 2020–09
  31. By: Sugata Marjit; Gouranga Gopal Das
    Abstract: This paper attempts to build up a Heckscher-Ohlin-Samuelson model of production and trade where capital is introduced outside the production process as a financial capital or credit as per the classical Ricardian wage fund framework. Stock of credit or financial capital as past savings, finances employment and machines or capital goods used in the process of production with Ricardian fixed coefficient technology. We derive the relationship between factor prices and rate of interest on one hand and relative price and endowments on the other. Availability of finance does not impact production or pattern of trade only nominal factor prices. International financial flows will not alter pattern of trade, but movement of labour and machines will. Such results change drastically when we consider a model with unemployment and finance dictates real outcomes much more than before. Introducing finance affects trade patterns with unemployment and especially with imperfect credit markets. The results could explain a vast array of stylized facts such as, financial crisis or shock, credit rationing and their impact on production, trade and unemployment. The paper has policy implications for role of financial development, quality of institutions in economic development.
    Keywords: wage-fund, Heckscher-Ohlin-Samuelson, Ricardo, inequality, credit, general equilibrium, financial development, unemployment, trade
    JEL: B12 B13 B17 F11 F63 F65 F16 O12
    Date: 2022
    Abstract: The Ukrainian crisis and Russia-U.S. conflict can provide important policy implications for South Korea. This is especially true in that the external environments of Ukraine and the Korean Peninsula, which are located between great powers, share many similarities. In addition, and more importantly, this event will inevitably have a huge impact on the global economic and security order. This crisis is related to the continued geopolitical competition between the United States and Russia, the strengthening of the Atlantic alliance between the United States and the European Union, the increase in NATO’s future role and status in the European security order, Russia’s challenge to building the European security order, and the change in relations between Russia and the West. Considering the above, the policy implications for the Ukrainian crisis and Russia-U.S. conflict can be summarized as follows. First, there is a possibility that a so-called “new Cold War” confrontational structure will be formed on the Korean Peninsula. Second, the crisis in Ukraine could have a negative impact on North Korea’s denuclearization process. Third, the crisis in Ukraine and Russia-
    Keywords: Ukrainian Crisis; Russia-U.S. Conflict; Korean Peninsula
    Date: 2022–04–12
  33. By: Jung-In Yeon; Sojung Hwang; Bogang Jun
    Abstract: We examine the spillover effect of neighboring ports on regional industrial diversification and their economic resilience using the export data of South Korea from 2006 to 2020. First, we build two distinct product spaces of ports and port regions, and provide direct estimates of the role of neighboring ports as spillover channels spatially linked. This is in contrast to the previous literature that mainly regarded ports as transport infrastructure per se. Second, we confirm that the knowledge spillover effect from neighboring ports had a non-negligible role in sustaining regional economies during the recovery after the economic crisis but its power has weakened recently due to a loosened global value chain.
    Date: 2022–03
  34. By: Ricardo Hausmann (Center for International Development at Harvard University); Agata Łoskot-Strachota; Axel Ockenfels; Ulrich Schetter (Center for International Development at Harvard University); Simone Tagliapietra; Guntram Wolff; Georg Zachmann
    Abstract: Following the Russian aggression against Ukraine, major sanctions have been imposed by Western countries, most notably with the aim of limiting Russia’s access to hard international currency. However, Russia remains the world’s first exporter of oil and gas, and at current energy prices this provides large hard currency revenues. As the war continues, European governments are under increased pressure to scale-up their energy sanctions, following measures taken by the United States, the United Kingdom, Canada and Australia. This piece argues that given the inelasticity of Russia’s oil and gas supply, for Europe the most efficient way to sanction Russian energy would not be an embargo, but the introduction of an import tariff that can be used flexibly to control the degree of economic pressure on Russia.
    Keywords: Ukraine War, Russia
    Date: 2022–04
  35. By: Stiewe, Clemens; Ruhnau, Oliver; Hirth, Lion
    Abstract: Since September 2021, European natural gas prices are at record-high levels. On average, they have been six to seven times higher than pre-pandemic price levels. While the post-pandemic recovery of global natural gas demand has driven up prices around the world, the most important drivers for European gas prices were Russia’s less-than-usual supply since mid-2021 and its invasion of Ukraine in February 2022. Western efforts to abandon Russian gas imports altogether mean that high natural gas prices are likely to stay for longer. While high gas prices may be the new normal, there is uncertainty about the economic reaction to this shock. How do energy-intensive industries react? Do global value chains collapse if intermediate goods produced in Europe become uneconomic because of high energy prices? Our preliminary analysis shows that industry response to has in fact been visible from the very onset of the energy crisis. A closer look at German fertilizer production, which heavily relies on natural gas as fuel and feedstock to produce ammonia as an intermediate product, reveals that increased ammonia imports have allowed domestic fertilizer production to remain remarkably stable.
    Keywords: Energy demand,Demand response,European energy crisis,Natural gas
    JEL: Q41
    Date: 2022
  36. By: Mr. Diego A. Cerdeiro; Andras Komaromi; Yang Liu
    Abstract: Rising prices and reports of empty shelves in major economies have drawn attention to the functioning of supply chains that normally operate smoothly in the background. Among the issues, the long delays that port congestion may have caused in delivering goods to consumers and firms have been gathering increasing attention. We shed light on these issues leveraging a unique data set on maritime transport. Two main features emerge. First, at the world level, we find that shipping times jumped upwards as soon as the COVID crisis hit, and after a marked acceleration from end-2020, delays surpassed 1.5 days on average by December 2021 – or roughly a 25 percent increase in global travel times. The estimated additional days in transit for the average shipment in December 2021 can be compared to an ad-valorem tariff of 0.9 to 3.1 percent. The midpoint of this range is approximately equal, in absolute value, to the global applied tariff reduction achieved over the 14-year period from 2003 to 2017. Second, not all congestion appears related to increased demand. Many ports, especially since mid-2021, exhibit longer wait times despite handling less cargo than pre-pandemic. Infrastructure upgrading is therefore likely a necessary, but not sufficient condition for building resilience during a crisis where other factors (such as labor shortages) may also become binding.
    Keywords: Trade, Port Congestion, Supply Chains, Resilience; port congestion; tariff reduction; rising prices; destination port; port delay; Tariffs; COVID-19; Supply shocks; Labor shortages; Infrastructure; Global
    Date: 2022–03–25
    Abstract: One of the main changes in Korea’s foreign affairs in recent years is the expansion of official development assistance (ODA), among which Africa is showing particularly rapid growth. Korea’s ODA to Africa accounted for 15% of its total ODA budget in 2010, and rose to 25% in 2019 as Korea emphasized its role in international development. Korea ranks 11th in terms of the cumulative size of ODA to the African healthcare sector between 2011–2019, totaling 674 million USD. As Korea’s expansion of ODA and solidarity in international development aid to respond to COVID-19 are related, the expansion of ODA in the African healthcare sector is anticipated to continue. This study analyzes features of the healthcare sector in Africa in an effort to suggest various plans for development cooperation, based on an evaluation of Korea’s ODA project design to enable the effective provision of ODA.
    Keywords: Healthcare; Africa; Korea; ODA; Policy
    Date: 2022–03–22
  38. By: Tandon, Anjali
    Abstract: Structural transformation supports higher output growth if it reflects the endowment fundamentals of the economy. Since the industrial structure is expected to align with factor-intensive sectors, structural coherence with factor proportions becomes an important consideration for industrial policy design. In the past, measurement of factor proportion (intensity) has been restricted to direct use within the sector ignoring the crucial fact that factors are also embedded in upstream supplies. Therefore, an underestimation of the factor proportions across sectors of the economy cannot be ruled out if evaluated using direct factor contents only. It is important to account for the indirect requirement for factors of production. Capital, in particular, is expected to be used intensely in the tradable sectors due to their relative importance in output, exports and investment. However, tradables are often studied in isolation of their interaction with the non-tradables. The use of Semi Input-Output (SIO) model permits to address both the above mentioned shortcomings. This paper has two objectives for studying the tradables using an SIO approach using the KLEMS data from the RBI. First, to provide an improved estimate of factor proportions from the additional accounting for interlinkages with the non-tradables. Second, to study the structural coherence with factor proportions. The absence of a clear pattern between the structure of output and factor proportions points to market failures preventing movement of labour and capital to the most desirable sectors, thus constraining growth. Major exporting tradables are not the most labour-intensive sectors, indicating a mis-match vis-a-vis the proportions. The output and exports are not concentrated among the most capital-intensive tradables. The concentration of FDI into sectors with high relative use of capital, in a labour rich economy, leaves not a very encouraging situation for employment generation. From a policy perspective, the results suggest that under the present orientation of factor proportions, FDI is unlikely to be the solution to employment generation problems with the existing skill set. With increased capital proportion of even the labour-intensive sectors, a different type of labour supply is needed which is better trained and also mobile across sectors.
    Keywords: Factor proportions; Tradables; Capital-to-Labour ratio; Semi-Input-Output; Linkages; India.
    JEL: C67 D24 D57
    Date: 2022–03
  39. By: Bhavesh Garg; Pravakar Sahoo (Institute of Economic Growth, Delhi)
    Abstract: Emerging market economies have experienced an unprecedented rise in cross-border capital flows and the existing literature provides us evidence of both expansionary and contractionary effects of inflows on domestic output. In this context, we make an attempt to answer the following questions: (1) Do capital inflows lead to expansionary or contractionary effect on emerging countries? (2) Do different types of capital inflows have different impacts? and (3) Do absorptive capacities influence the effect of capital flows on the host countries? To answer these questions, we carry out a comparative analysis for India and China using quarterly data for the period 1998Q1 to 2020Q1. The results reveal that total gross capital inflows as well as disaggregated capital inflows exhibit expansionary effect on domestic output in case of both India and China. We supplement the time series data with panel analysis for the top ten capital flows recipient EMEs over the period 1998-2019. We find that capital inflows a t aggregate level and also at the disaggregate level except debt flows have an expansionary effect on output.
    Keywords: Gross capital inflows, FDI, Emerging economies, Structural breaks
    JEL: F21 F32 F43 C22 C23
    Date: 2021–09
  40. By: De Weerdt, Joachim; Duchoslav, Jan
    Abstract: Although geographically distant, there are multiple channels through which Russia’s invasion of Ukraine can affect the lives of Malawians. Before the invasion, Russia’s and Ukraine’s exports accounted for about 12% of total calories (Glauber and Laborde, 2022) traded in the world, and the two countries were among the top five global exporters for many important cereals and oilseeds, including wheat, barley, sunflowers and maize (Figure 1). Ukraine is also an important source of sunflower seed oil, supplying about 50% of the global market. These exports have now largely seized as a result of war-related disruptions to production and logistics as well as economic sanctions on Russia and Belarus, its ally. This shock reduction of supply is driving up food commodity prices worldwide and will continue to do so while the current situation persists. The ongoing fighting has already disrupted the planting of barley and will soon disrupt the planting of maize, wheat, and oilseeds. The choke on global supply will thus continue for months (if not years) to come.
    Keywords: MALAWI; SOUTHERN AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; trade; wheat; maize; cooking oils; grain; fertilizers; policies; food prices; war; fertilizer price
    Date: 2022
  41. By: Davide Furceri; Mr. Yan Carriere-Swallow; Mr. Pragyan Deb; Daniel Jimenez; Mr. Jonathan David Ostry
    Abstract: The Covid-19 pandemic has disrupted global supply chains, leading to shipment delays and soaring shipping costs. We study the impact of shocks to global shipping costs—measured by the Baltic Dry Index (BDI)—on domestic prices for a large panel of countries during the period 1992-2021. We find that spikes in the BDI are followed by sizable and statistically significant increases in import prices, PPI, headline, and core inflation, as well as inflation expectations. The impact is similar in magnitude but more persistent than for shocks to global oil and food prices. The effects are more muted in countries where imports make up a smaller share of domestic consumption, and those with inflation targeting regimes and better anchored inflation expectations. The results are robust to several checks, including an instrumental variables approach in which we instrument changes in shipping costs with an indicator of closures of the Suez Canal.
    Keywords: Price shocks, shipping cost, inflation pass-through, monetary policy.; shipping cost; inflation pass-through; inflation expectation; import intensity; import share; Inflation; Import prices; Oil prices; Output gap; Producer prices; Global; Baltics
    Date: 2022–03–25
  42. By: Tapia, Pablo; Pastén, Boris; Sepulveda Velasquez, Jorge
    Abstract: China is the world’s largest importer and Russia one of its main exporters, particularly of energy. Consequently, foreign military activities by Russia could influence the performance of China’s energy market. The research objective is to present evidence on the effects of the 2002-2022 Russian military interventions on the returns of the Chinese energy market. Using event study methodology, we found evidence that Russian military intervention announcements had positive and negative effects on these returns. These findings suggest that the effect of these interventions could be related to the level of acceptance of each intervention and relationship between China and Russia.
    Keywords: China; energy markets; war; market efficiency; event study
    JEL: G11 G14 G15
    Date: 2022–04–10
  43. By: Ninon Sirdey (UMR MoISA - Montpellier Interdisciplinary center on Sustainable Agri-food systems (Social and nutritional sciences) - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - IRD - Institut de Recherche pour le Développement - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, Cirad-ES - Département Environnements et Sociétés - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement); Sylvaine Lemeilleur (UMR MoISA - Montpellier Interdisciplinary center on Sustainable Agri-food systems (Social and nutritional sciences) - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - IRD - Institut de Recherche pour le Développement - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, Cirad-ES - Département Environnements et Sociétés - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement)
    Abstract: AbstractFair trade (FT) schemes claim to improve food security by generating economic gains for certified households. Previous research has shown that FT-certified households may benefit from higher prices and incomes. However, little attention has been paid to the implications of FT for food security. In this paper, we use qualitative data, cross-sectional household surveys conducted among coffee-growing households in Peru and matching econometric methods to investigate whether economic gains resulting from FT are enough to ensure food security for farming households. Results show that although FT increased the return from certified coffee (prices, production, yields and net return), the extent of the food insecurity facing FT participants remained unchanged. Our qualitative results suggest that farming households use the additional income they receive from FT to pay for their children's higher education as a long-term non-farm investment. This leakage effect raises the question of the effect of FT in the medium and long term from a rural development perspective.
    Keywords: Fair trade,Food security,Impact,Coffee,Peru
    Date: 2021
  44. By: Schneider, Julia M.; Zabel, Florian; Schünemann, Franziska; Delzeit, Ruth; Mauser, Wolfram
    Abstract: The pressure on land resources continuously increases not only with the rising demand for agricultural commodities, but also with the growing need for action on global challenges, such as biodiversity loss or climate change, where land plays a crucial role. Land saving as a strategy, where agricultural productivity is increased to allow a reduction of required cropland while sustaining production volumes and meeting demand, could address this trade-off. With our interdisciplinary model-based study, we globally assess regional potentials of land saving and analyze resulting effects on agricultural production, prices and trade. Thereby, different land saving strategies are investigated that (1) minimize required cropland (2) minimize spatial marginalization induced by land saving and (3) maximize the attainable profit. We find that current cropland requirements could be reduced between 37% and 48%, depending on the applied land saving strategy. The generally more efficient use of land would cause crop prices to fall in all regions, but also trigger an increase in global agricultural production of 2.8%. While largest land saving potentials occur in regions with high yield gaps, the impacts on prices and production are strongest in highly populated regions with already high pressure on land. Global crop prices and trade affect regional impacts of land saving on agricultural markets and can displace effects to spatially distant regions. Our results point out the importance of investigating the potentials and effects of land saving in the context of global markets within an integrative, global framework. The resulting land saving potentials can moreover reframe debates on global potentials for afforestation and carbon sequestration, as well as on how to reconcile agricultural production and biodiversity conservation and thus contribute to approaching central goals of the 21st century, addressed for example in the Sustainable Development Goals, the Paris Agreement or the post-2020 global biodiversity framework.
    Date: 2022

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