nep-int New Economics Papers
on International Trade
Issue of 2023‒01‒30
forty papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. FDI Inflows and Domestic Firms: Adjustments to New Export Opportunities By Brian McCaig; Nina Pavcnik; Woan Foong Wong
  2. The global geography of income and export patterns By Dorothee Hillrichs
  3. Shaking up Foreign Finance: FDI in a Post-Disaster World By Robert Reinhardt
  4. December report on progress of Ukrainian grains exports to Africa By Häberli, Christian; Kostetsky, Bogdan
  5. Regulatory Stringency and Emission Leakage Mitigation By Fabio Antoniou; Panos Hatzipanayotou; Nikos Tsakiris
  6. Import tariff pass-through effect and the spatial distribution of domestic consumer goods prices: Zimbabwe (2009-2014) By Everisto Mugocha; Haroon Bhorat
  7. Geo-Economic Fragmentation and the Future of Multilateralism By Mr. Shekhar Aiyar; Ms. Anna Ilyina; Mr. Jiaqian Chen; Mr. Alvar Kangur; Mr. Juan P Trevino; Mr. Christian H Ebeke; Tryggvi Gudmundsson; Gabriel Soderberg; Tatjana Schulze; Tansaya Kunaratskul; Michele Ruta; Mr. Roberto Garcia-Saltos; Mr. Sergio L. Rodriguez
  8. Estimating gravity from the short to the long run: A simple solution to the 'International Elasticity Puzzle' By Anderson, James; Yotov, Yoto
  9. Regulatory approximation under ALECA: Assessing the economic and social effects on the Tunisian agricultural sector By Raza, Werner G.; Tröster, Bernhard; Von Arnim, Rudi; Chandoul, Jihen; Ben Rouine, Chafik
  10. Foreign Direct Investment (FDI) Spillovers in Visegrad Countries By Eristian Wibisono; ;
  11. Three essays on spatial frictions By Pierre Cotterlaz
  12. Aggregation Across Each Nation: Aggregator Choice and Macroeconomic Dynamics By Lisack Noëmie; Sajedi Rana; Lloyd Simon
  13. Global value chains and the transmission of exchange rate shocks to consumer prices By Hadrien Camatte; Guillaume Daudin; Violaine Faubert; Antoine Lalliard; Christine Rifflart
  14. Supply Chain Subsidies and Production Relocation: A new look at Japanese multinational firms (Japanese) By ZHANG Hongyong
  15. Women's Rights and the Gender Migration Gap By Gutmann, Jerg; Marchal, Léa; Simsek, Betül
  16. How Foreign Aid Affects Migration: Quantifying Transmission Channels By Léa Marchal; Claire Naiditch; Betül Simsek
  17. Global Value Chains and Equilibrium Exchange Rate: Evidence from Central European Economies By Kamila Kuziemska-Pawlak; Jakub Mućk
  18. The Impact of International Trade on the Price of Solar Photovoltaic Modules: Empirical Evidence By Ivan Hajdukovic
  19. Governance quality and trade performance in Sub-Saharan Africa By Simplice A. Asongu; Nicholas M. Odhiambo
  20. Changes in Geopolitics of Semiconductors and Directions for Korea By Kyung, Heekwon; Lee, Jun
  21. A New Emerging U.S. Trade and Technology Policy? By Atkinson, Robert D.
  22. Induced Innovation and Carbon Leakage By Jonathon M. Becker; Jared C. Carbone; Andreas Loeschel
  23. The United States of Europe: A Gravity Model Evaluation of the Four Freedoms By Keith Head; Thierry Mayer
  24. Motivations and locational factors of FDI in CIS countries: Empirical evidence from South Korean FDI in Kazakhstan, Russia, and Uzbekistan By Han-Sol Lee; Sergey U. Chernikov; Szabolcs Nagy
  25. North Korea's Light Industry in the 2000s and Implications for Inter-Korean Economic Cooperation By Lee, SeogKi
  26. A Historical Note on the Assimilation Rates of Foreign-Born Women in the U.S. By Duleep, Harriet; Dowhan, Dan; Liu, Xingfei
  27. Nontariff barriers, trading companies and customs duties evasion By Mattos, Enlinson; Bressan, Rafael
  28. Dissecting the Sinews of Power: International Trade and the Rise of Britain’s Fiscal-Military State, 1689-1823 By Ernesto Dal Bó; Karolina Hutková; Lukas Leucht; Noam Yuchtman
  29. La diffusion internationale du choc de Covid-19 By Eric Heyer; Xavier Timbeau
  30. Climate change increases resource-constrained international immobility By Hélène Benveniste; Michael Oppenheimer; Marc Fleurbaey
  31. A Generalized Poisson-Pseudo Maximum Likelihood Estimator By Ohyun Kwon; Jangsu Yoon; Yoto V. Yotov
  32. Changes in International Immigration and Internal Native Mobility after Covid-19 in the US By Giovanni Peri; Reem Zaiour
  33. A Unifying Theory of Foreign Intervention in Domestic Climate Policy By Juan Moreno-Cruz; Anthony Harding
  34. Russia’s Reaction Against Greece's Hostile Behaviors And Violations Of The Demilitarization Provisions Of The 1947 Paris Treaty By Tulun, Teoman Ertuğrul
  35. The Evolution of Labor Market Disparities between Hispanic and non-Hispanic Men: 1970-2019 By Kospentaris, Ioannis; Stratton, Leslie S.
  36. Taxing Intellectual Property Assets on a Cross- Border Transaction: Application of Mobilia Sequuntur Personam and the Case of India-Mauritius Tax Treaty By M. P. Ram Mohan; Aditya Gupta
  37. QAnon and other conspiracy ideologies’ impact on Sub-Saharan Africa in the age of Global capitalism By Kohnert, Dirk
  38. Capital Account Liberalization, Financial Frictions, and Belief-Driven Fluctuations By Takuma Kunieda; Kazuo Nishimura
  39. Analysis of the Cross-Border E-Commerce Environment for Philippine Women-led MSMEs: Challenges and Opportunities By Bacasmas, Jill Angeli V.; Katigbak, Jovito Jose P.; Carlos, Jean Clarisse T.
  40. Economic Sanctions during Humanitarian Emergencies: The Case of North Korea By Noland, Marcus; Haggard, Stephan

  1. By: Brian McCaig; Nina Pavcnik; Woan Foong Wong
    Abstract: We investigate the long-term effects of export opportunities to a large destination market on multinational affiliates and domestic firms in a low-income host country. The US-Vietnam Bilateral Trade Agreement reduced US import tariffs on exports from Vietnam. Tariff reductions led to entry of foreign and private firms and to employment expansion in formal manufacturing, with foreign entrants contributing most to employment growth. State firms stall employment reallocation through slower contraction. Half of tariff-induced foreign entrant growth is post-entry and exporter-driven. Foreign entrants are from non-US sources, highlighting the importance of studying FDI from multiple source countries in a lower-income host.
    Keywords: trade liberalization, employment, foreign direct investment, exporting, firm dynamics, Vietnam
    JEL: F13 F14 O14 O19
    Date: 2022
  2. By: Dorothee Hillrichs (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: This paper studies heterogeneity in the income elasticity of exports across origin countries. Combining insights of the economic geography literature and the home market effect literature, I argue that foreign consumer preferences drive product specifications and thus export patterns. I capture foreign consumer preferences with a multilateral income term, “quality market potential”. Analysing product-level trade flows with a gravity framework, I show that countries with high quality market potential export more to high-income destinations. The effect outweighs the standard home market effect of domestic per capita income, is strongest for developing countries, and works chiefly through the quantity margin.
    Keywords: Non-homothetic preferences, home-market effect, trade margins
    JEL: F14 R12 O19
    Date: 2023–01–11
  3. By: Robert Reinhardt (Centre d'Economie de la Sorbonne - Université Paris1 Pantheon-Sorbonne)
    Abstract: This study investigates which effect earthquakes have on the inflow of foreign direct investment (FDI) within a country from a temporal, spatial and sectoral dimension. It uses a dynamic difference-indifference model of physical disaster exposure in 416 Indonesian districts between 2003 and 2019 in order to quantify the impact on investment behavior from abroad. Drawing geolocated data from a variety of sources, the results indicate that FDI inflows are temporarily reduced of around 90% in the year after the disaster. In this case study, spatial effects play a subordinate role, yet earthquake shocks affecting upstream industries tend to have substantial negative effects. Manufacturing appears to be the most affected sector
    Keywords: Foreign Direct Investment; Disasters; Risk; Economic Growth; Input-Output
    JEL: F21 O12 Q54 C67
    Date: 2022–12
  4. By: Häberli, Christian; Kostetsky, Bogdan
    Abstract: We publish today the December report on the outcome of the project "Repairing Broken Food Trade Routes Ukraine – Africa”. It covers development of Ukrainian grain exports (including Africa and Middle East destinations) under the Grain Initiative and change of Ukrainian origin’ market share at main African importing markets. Report recaptures the December 2022 developments of grain export shipments from Ukraine and touches on competitive standing of Ukrainian production in context of subsidies practiced by competitive origins. We also shed more light on sea freight insurance changes and impact on increased costs born in supply chain. This project has received funding from the European Union's Horizon 2020 research and innovation programme “Making Agricultural Trade Sustainable” (MATS) programme ( The role of MATS/WTI in this programme is to identify and explore “broken” Ukrainian - African food trade routes due to the Russian invasion of Ukraine. Starting with a food trade flow chart pre- and post-24 February 2022, it will assess, first, whether Ukrainian (or African) traders can again supply these products (Output 1). Failing that, whether the new EU-financed “Crisis Management” (or another) programme can possibly make up for lost Ukrainian agrifood exports (Output 2). It will also identify alternative exporters (if any) which might already have filled in agrifood demand in Africa (Output 3). Importantly, the Project also looks at the potential effect of these developments on competing farm production in Africa (Output 4). For further information and/or offer to assist in project implementation, please write to Christian Häberli ( or to Bogdan Kostetsky (
    Date: 2023–01–11
  5. By: Fabio Antoniou (Athens University of Economics and Business); Panos Hatzipanayotou (Athens University of Economics and Business); Nikos Tsakiris
    Abstract: We construct a two-country trade model where emissions are an input in production and generate cross-border pollution. We examine the strategic incentives of an active regulator that sets a binding level of emissions in production. We show that, in the presence of terms of trade and emission leakage strategic motives, tighter regulation can mitigate emission leakage, reduce global pollution, and improve a country's welfare. This result and the corresponding policy implications depend on the relative magnitude of emissions intensities of goods between sectors and on their relationship in production and consumption.
    Keywords: Environmental Regulation, International Trade, Emission Leakage, Cross-border Pollution
    JEL: F18 H23 Q54
    Date: 2023–01–13
  6. By: Everisto Mugocha; Haroon Bhorat
    Abstract: The study of import tariffs pass-through has been observed to be crucial for policy making, for instance, this may inflate some goods’ prices thus harming individual welfare. However, the extant literature on the import tariffs pass-through effect has largely ignored the possibility of spatial dependence between domestic goods prices which may brew imprecise estimates. Hence, […]
    Keywords: Africa, Import Tariff, Inflation, poverty, Prices, Sub-Saharan Africa, Trade Policy, Welfare
    JEL: E31 F1 H53 L51
  7. By: Mr. Shekhar Aiyar; Ms. Anna Ilyina; Mr. Jiaqian Chen; Mr. Alvar Kangur; Mr. Juan P Trevino; Mr. Christian H Ebeke; Tryggvi Gudmundsson; Gabriel Soderberg; Tatjana Schulze; Tansaya Kunaratskul; Michele Ruta; Mr. Roberto Garcia-Saltos; Mr. Sergio L. Rodriguez
    Abstract: After several decades of increasing global economic integration, the world is facing the risk of policy-driven geoeconomic fragmentation (GEF). This note explores the ramifications. It identifies multiple channels through which the benefits of globalization were earlier transmitted, and along which, conversely, the costs of GEF are likely to fall, including trade, migration, capital flows, technology diffusion and the provision of global public goods. It explores the consequences of GEF for the international monetary system and the global financial safety net. Finally, it suggests a pragmatic path forward for preserving the benefits of global integration and multilateralism
    Keywords: Geoeconomic fragmentation; globalization; global economic integration; geopolitical blocs; international monetary system; global financial safety net; multilateralism; costs of economic fragmentation; rules-based multilateral system.; IMF AREAER report; U.S. Dollar share; trade openness; trade agenda; share of Global Foreign Exchange; Capital flows; Trade barriers; Global
    Date: 2023–01–15
  8. By: Anderson, James (Boston College); Yotov, Yoto (Drexel University)
    Abstract: We propose a simple and flexible reduced-form econometric approach to estimate gravity models in the short and the long run. The theoretical lens for interpreting our methods amends the canonical Lucas-Prescott adjustment formulation to allow for time-interval-varying depreciation-cum-adjustment. A time-varying trade elasticity in the structural gravity model is implied. Our methods explain the `international elasticity puzzle, ' the discrepancy between trade elasticity estimates from the trade literature and the international real business cycle literature. The same theory-motivated estimating equation applied to the same data generates a distribution of trade elasticity estimates that vary from 0.4 in the short run to 4.8 in the long run. The results offer support for some existing theories of dynamic adjustment in trade costs and imply that the long-run equilibrium in our sample is reached in about 16 to 17 years.
    Keywords: Short vs. Long Run; Gravity Estimation; Trade Elasticity
    JEL: F13 F14 F16
    Date: 2022–12–18
  9. By: Raza, Werner G.; Tröster, Bernhard; Von Arnim, Rudi; Chandoul, Jihen; Ben Rouine, Chafik
    Abstract: The negotiations on a deep and comprehensive free trade area (DCFTA) between Tunisia and the European Union (EU) have been ongoing since 2015. Better known by its French acronym - Projet d'accord de libre-échange complet et approfondi' (ALECA) - the agreement aims for an ambitious liberalisation of trade and investment in order to integrate Tunisia's economy further into the EU single market. In this study, the authors explicitly consider the costs that Tunisian producers have to incur in the process of regulatory approximation of agricultural standards to EU regulations through ALECA. Based on estimations of compliance costs from interviews with Tunisian exporters to the EU, the effects of regulatory adjustment to EU regulations and private standards in agricultural and food sectors are simulated in the ÖFSE Global Trade model. Moreover, the effects of bilateral reductions in tariffs and quotas and potential changes in productivity and NTM trade costs are taken up in interrelated scenarios. With this approach, the authors are able to provide a more comprehensive picture than previous studies of the multiple implications of ALECA for the agricultural sector in Tunisia. Our assessment concludes that ALECA has significant downside risks, as value-added in Tunisian agriculture might decline by up to 8.3 %. These effects need to be considered in the negotiations and in the broader context for sustainable agricultural development in Tunisia.
    Date: 2022
  10. By: Eristian Wibisono; ;
    Abstract: Macroeconomic and microeconomic literature has raised the impact of FDI knowledge and technology spillovers in the host economy. However, there is still a research gap in addressing this topic in the knowledge economy. Based on a comprehensive literature review, this paper demonstrates the performance of FDI spillovers and their impact on the productivity of domestic firms in emerging and transition economies in Europe. Poland is the largest country in the Visegrad group but provides limited studies on FDI experience. The paper then shows the geographic distribution of FDI across Polish regions, where the western and eastern regions appear very different. There is a significant positive impact of FDI presence on the productivity of foreign-affiliated domestic firms. Unfortunately, the presence of FDI in these regions is not significant enough to induce knowledge and technology spillovers to improve firm productivity. The effectiveness of FDI knowledge and technology in boosting the productivity of the local economy may be worth questioning. Therefore, comparable spatial studies are encouraged to be conducted in future research with a more complete and robust data structure which is recognized as a limitation of this study.
    Keywords: FDI; knowledge and technology; spillovers; Visegrad; Poland; spatial dependencies
    JEL: B27 E22 O52 R11 R12
    Date: 2023–01
  11. By: Pierre Cotterlaz (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Spatial frictions are key to explain many economic phenomena. This thesis provides three pieces of evidence on the origins, prevalence and consequences of such frictions.In the first chapter, we focus on spatial frictions in the diffusion of knowledge. We explain the puzzling persistence and stability of the spatial decay in patent citation flows by innovator networks. We establish that knowledge percolates: firms disproportionately cite new patents from prior contacts, and form links with contacts of their contacts. Embedding this percolation into a network formation model is sufficient to rationalize the negative link between aggregate knowledge flows and distance.In the second chapter, we shed some light on the role of spatial information frictions in shaping international trade flows. We use the specific context of the XIXth Century, during which the creation of international news agencies facilitated the transmission of information across countries. We show that trade between a pair of countries increases when both are covered by a news agency. The reduction in information friction was therefore one of the many factors behind the First Globalization.The last chapter investigates whether transport costs are the main component of within-country trade costs. While it is well-established that international trade costs are not limited to transport costs, evidence is much scarcer for intra-national trade flows. We use hurricane Sandy as a natural experiment shifting upwards transport costs in some areas of the US to establish that if transport costs were the sole driver of the distance elasticity of trade flows within the US, this distance elasticity would be much lower.
    Abstract: Les frictions spatiales jouent un rôle crucial dans l'explication de nombreux phénomènes économiques. Dans cette thèse, nous étudions les origines, la prévalence et les conséquences de telles frictions à travers trois exemples. Dans le premier chapitre, nous nous intéressons aux frictions spatiales pesant sur la diffusion de la connaissance. Nous expliquons l'effet négatif de la distance sur les flux de citations entre brevets par la structure des réseaux d'innovation. Nous montrons que la connaissance percole: les entreprises tendent à citer davantage les nouveaux brevets de leurs contacts existants, et à former de nouveaux liens avec des contacts de leurs contacts. Dans le second chapitre, nous explorons les liens entre frictions informationnelles et commerce international. Nous utilisons le contexte spécifique du XIXe siècle, au cours duquel émergent des agences de presse mondiales, facilitant le partage d'informations sur les marchés étrangers. Nous montrons que deux pays commercent davantage une fois qu'ils bénéficient de ce choc positif sur la capacité à obtenir de l'information. Les agences de presse s'insèrent donc parmi les nombreux facteurs explicatifs de la Première Mondialisation. Le dernier chapitre cherche à déterminer si les coûts de transport constituent l'essentiel des obstacles au commerce à l'intérieur d'un pays. Nous utilisons l'ouragan Sandy comme une expérience naturelle à l'origine d'une hausse des coûts de transport pour les flux transitant par certaines zones, et montrons que l'élasticité intra-USA des flux commerciaux à la distance serait bien plus faible si les coûts de transport étaient les seuls responsables de cette élasticité.
    Keywords: Trade costs, Innovation, Networks, News agencies, Coûts du commerce, Réseaux, Agences de presse
    Date: 2021–06–03
  12. By: Lisack Noëmie; Sajedi Rana; Lloyd Simon
    Abstract: We study the implications of trade aggregation in an infinite-horizon economy with multiple countries, asking whether there is a role for alternatives to the Armington aggregator in a wide range of workhorse open-economy macroeconomics models. We show analytically that the first-order dynamics of the model are entirely captured by a few sufficient statistics. Over and above these statistics, the precise choice of functional form for the trade aggregator is irrelevant. This result has the following implications. For given steady-state trade elasticities and expenditure shares, any aggregator that is homogeneous of degree one is equivalent to the Armington aggregator at first order. Similarly, aggregators that are homogeneous of arbitrary degree are equivalent to a simple generalisation of the Armington aggregator, for given steady-state trade elasticities and expenditure shares. In models with more than two countries, alternative aggregators can play a role by allowing for steady-state differences in bilateral trade elasticities across different country pairs, which the Armington aggregator rules out. <p> Nous étudions les implications de l’agrégation entre biens échangeables dans un modèle multi-pays en horizon infini, et si des alternatives à l’agrégateur Armington ont un rôle à jouer dans les modèles typiques de macroéconomie ouverte. Nous montrons analytiquement que les dynamiques de premier ordre du modèle sont entièrement déterminées par un petit nombre de statistiques suffisantes. Au-delà de ces statistiques, le choix précis de la forme fonctionnelle de l’agrégateur du commerce n’a pas d’effet. Ce résultat a les conséquences suivantes. À élasticités de commerce et parts de dépenses à l’état stationnaire données, tout agrégateur homogène de degré 1 est équivalent à l’agrégateur Armington au premier ordre. De même, les agrégateurs homogènes de degré arbitraire sont équivalents à une simple généralisation de l’agrégateur Armington, étant données les élasticités de commerce et parts de dépenses à l’état stationnaire. Dans les modèles avec plus de deux pays, les agrégateurs alternatifs peuvent jouer un rôle en permettant aux élasticités bilatérales de commerce entre différentes paires de pays de prendre des valeurs différentes à l’état stationnaire, ce qui n’est pas possible avec l’agrégateur Armington.
    Keywords: International Trade, Open-economy Macroeconomics, Armington Aggregator, Elasticity of Trade; commerce international, macroéconomie ouverte, agrégateur Armington, élasticité de commerce
    JEL: F00 F10 F41
    Date: 2022
  13. By: Hadrien Camatte; Guillaume Daudin (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Violaine Faubert; Antoine Lalliard; Christine Rifflart (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: Following the 2008 financial crisis, inflation rates in advanced economies have been at odds with the prediction of a standard Phillips curve. This puzzle has triggered a debate on the global determinants of domestic prices. We contribute to this debate by investigating the impact of exchange rate shocks on consumer prices from 1995 to 2018. We focus on cost-push inflation through global value chains. We build on three sectoral world input-output datasets (WIOD and two versions of TiVA). We assume a Cobb-Douglas production framework and work in a partial equilibrium setting. The construction of World Input-Output tables is data-demanding and WIOTs are typically released with a lag of several years. To address this gap, we use more up-to-date GDP and trade data, thus providing a tool for approximating the partial equilibrium impact of an exchange rate shock on consumer prices from 2015 onwards. Depending on countries, the absolute value of the elasticity of the household consumption expenditure (HCE) deflator to the exchange rate ranges from 0.05 to 0.35, confirming the importance of global value chains in channelling external shocks to domestic inflation. Using data from WIOD on a sample of 43 countries, we find that the mean output-weighted elasticity of the HCE deflator to the exchange rate increased in absolute value from 0.075 in 2000 to 0.094 in 2008. After peaking in 2008, it declined to 0.088 in 2014. Extrapolations based on more up-to-date GDP and trade data suggest that the decline continued until 2016, before reversing in 2017 and 2018. Our findings are robust to using three different datasets.
    Keywords: input-output linkages, spillovers, global value chains, cost-push inflation
    Date: 2021–01–01
  14. By: ZHANG Hongyong
    Abstract: Using multiple government statistics, this paper first outlines trends in the reshoring of manufacturing industries to Japan and the relocation of overseas production bases (friend-shoring) from China to ASEAN countries. Overseas production and offshoring have stagnated in recent years, but it does not mean that the return to domestic production is progressing. Since the deterioration of Japan-China relations in 2012, the degree of dependence on China for overseas production has decreased, and production in ASEAN countries has expanded. Recently, the number of new entrants to the ASEAN countries has substantially increased. Next, using a data set that links government statistics with information on subsidy projects for supply chain resilience and diversification, this paper documents the characteristics of firms that obtained supply chain subsidies (hereinafter referred to as SCS firms) with a focus on their trade, investment, and performance before and after the COVID-19 crisis. There are four findings as follows: (1) Compared to non-SCS firms, SCS firms are more dependent on imported inputs in the years before COVID-19, but the concentration of imports from specific countries/regions is not so high. (2) Both the overseas production ratio of SCS firms and the concentration of production bases in specific countries/regions are high. In recent years, the overseas production ratio (especially in China since FY2018) has declined slightly, but a declining concentration of production bases was not observed. (3) Overseas manufacturing affiliates of SCS firms tend to a) be larger in scale than those of non-SCS firms, b) rely on Japan and third countries for procurement and sales, and c) function as export platforms. Since 2018, their capital investment and profit margin have been low, and the probability of withdrawal has increased. (4) After COVID-19, SCS firms did not show an upward trend in capital investment compared to non-SCS firms, despite the increase in domestic sales and employment. At the same time, there were no significant changes in capital investment, sales, or employment of SCS manufacturing affiliates in ASEAN countries. These results suggest that some firms have become less dependent on China for trade and investment since before COVID-19. After COVID-19, the return to domestic production was limited until Q2 2021, and relocations from China to ASEAN were limited until the end of FY2020.
    Date: 2023–01
  15. By: Gutmann, Jerg; Marchal, Léa; Simsek, Betül
    Abstract: This is the first global study of how institutionally entrenched gender discrimination affects the gender migration gap (GMG) using data on 158 origin and 37 destination countries over the period 1961-2019. We estimate a gravity equation derived from a random utility maximization model of migration that accounts for migrants' gender. Instrumental variable estimates indicate that increasing gender equality in economic or political rights generally deepens the GMG, i.e., it reduces female emigration relative to that of men. In line with our theoretical model, this average effect is driven by higher-income countries. In contrast, increased gender equality in rights reduces the GMG in lower-income countries by facilitating female emigration.
    Keywords: Discrimination, Gender equality, Individual rights, Migration, RUM model
    JEL: F22 J16 J71 K38 O15 P48
    Date: 2023
  16. By: Léa Marchal (UP1 - Université Paris 1 Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Claire Naiditch (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique); Betül Simsek (University of Hamburg)
    Abstract: This is the first global study that quantifies the transmission channels through which foreign aid impacts migration to donor countries. We estimate a gravity model derived from a RUM model, using OECD data between 2011 and 2019 and an instrumentation strategy. Our identification takes advantage of data on multilateral aid provided by multilateral agencies which is non-donor specific. We find evidence that aid donated by a country increases migration to that country through an information channel. If that channel were the only one at play, a 1% increase in bilateral aid would induce a 0.17% increase in migration. In addition, a 1% increase in multilateral aid reduces migration from the less poor origin countries by 0.05% via a development channel.
    Keywords: Aid, Gravity, Migration
    Date: 2022–11
  17. By: Kamila Kuziemska-Pawlak (Narodowy Bank Polski; University of Lodz); Jakub Mućk (Narodowy Bank Polski; SGH Warsaw School of Economics)
    Abstract: This paper proposes an extension of the fundamental equilibrium exchange rate (FEER) model that accounts for the trade linkages within the Global Value Chains (GVCs). In the modified FEER framework, both backward and forward linkages are taken into consideration. To demonstrate the empirical relevance of the complex nature of existing trade linkages, the proposed FEER model is applied to analyze exchange rate fluctuations of the selected Central and Eastern European countries against the euro. It is documented that in Czechia, Hungary, and Poland the standard FEER framework predicts rapid appreciation of the equilibrium exchange rate after 2010, which implies deepening undervaluation of the actual real exchange rate towards the end of the analysed period. Instead, when the GVCs’ linkages are taken into account in the framework, actual real exchange rates are broadly in line with the fundamental equilibrium exchange rates, and hence the missing real appreciation of the Czech krone, the Hungarian forint and the Polish zloty is to a large extent an equilibrium phenomenon.
    Keywords: exchange rate, current account, foreign trade, Global Value Chains
    JEL: C32 C33 F12 F31 F32
    Date: 2022
  18. By: Ivan Hajdukovic (University of Barcelona)
    Abstract: This paper provides an empirical examination on the relationship between international trade and the price of solar photovoltaic (PV) modules. Using a sample of 15 countries over the period 2006-2015, we propose a dynamic linear panel data model based on a new specification, including number of relevant factors influencing solar PV module prices. The empirical analysis reveals that an increase in imports of solar PV cells and modules is associated with a decline in solar PV module prices. This finding suggests that international trade could lead to further price reductions, thus fostering the deployment of solar PV technology. The use of renewable energy can in turn have positive effects on environmental quality by reducing the emission of detrimental greenhouse gases generated by the consumption of fossil fuels. The empirical part reveals several other important findings. Market and technological development are key factors explaining the decline in solar PV module prices. Government policies such as public budget for R&D in PV and feed-in tariff for solar PV are effective in reducing the price of solar PV modules. Moreover, an increase in renewable energy consumption has a negative influence on solar PV module prices.
    Keywords: Dynamic panel data models, Solar photovoltaic module prices, Trade and Environment, Trade and Environment JEL Classification: C23, F18, Q42, Q56
    Date: 2022–10–07
  19. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: In this study, nexuses between governance and trade performance in terms of natural resource rents are assessed in 44 sub-Saharan African countries. The empirical evidence is based on Tobit regressions. The findings show that political governance (entailing “voice & accountability†and political stability) and institutional governance (consisting of the rule of law and corruption control) have a negative effect on trade performance. The findings are consistent with the perspective that resources rents are linked to inefficiencies in governance which are further detrimental to trade performance within the remit of natural resource rents on the one hand and, on the other, the premise of the prevailing weak institutions in the region less likely to boost trade performance.
    Keywords: Natural Resources; Economic Growth; Governance; Sub-Saharan Africa
    JEL: H10 Q20 Q30 O11 O55
    Date: 2023–01
  20. By: Kyung, Heekwon (Korea Institute for Industrial Economics and Trade); Lee, Jun (Korea Institute for Industrial Economics and Trade)
    Abstract: The US and EU have reached consensus on one strategic objective: reducing their reliance on Northeast Asia for semiconductor manufacturing built up over the past 30 years. Since the 1950s, the global semiconductor industry has experienced continued structural transition and extensive specialization due to the advent of many technological innovations, new products, and geopolitical factors. Signs of structural change are again apparent today. Korea’s response to these changes will serve as a watershed, diverging from the paths taken by Japan and Taiwan since the 1980s. Accordingly, accurate forecasts on the topography of the industry, plans to secure competitive advantage in global value chains based on these projections, and a comprehensive international strategy centering on cooperation with allies are urgently needed.
    Keywords: Semiconductor Industry; Semiconductor Manufacturing; Structural Change
    JEL: L63 O53
    Date: 2022–07–29
  21. By: Atkinson, Robert D. (Information Technology and Innovation Foundation)
    Abstract: Since the end of WWII, the United States was the leading force globally for free trade. Since the early 1980s, it was also the leading force for laissezfaire economics, promoting the “Washington Consensus” of limited government and free markets, both at home and abroad. That era has ended. The United States now sees itself as in intense competition for high valueadded production with other nations, especially China. And many in both parties now see some kind of national competitiveness strategy, including policies to support advanced industries, as a critical component of U.S. economic policy. This change is not temporary—the result of a particular president in the White House—rather, it is long-term and structural. As such, other nations will need to recalibrate their thinking about U.S. trade and economic policy.
    Keywords: U.S. Economic Policy; Washington Consensus; Free markets; Free trade
    JEL: F13 O24 O25
    Date: 2022–06–27
  22. By: Jonathon M. Becker (Department of Economics and Business, Colorado School of Mines); Jared C. Carbone (Department of Economics and Business, Colorado School of Mines); Andreas Loeschel (Ruhr University Bochum)
    Abstract: We explore the ability of unilateral climate policies to induce innovation and diffusion of technology and its impacts on carbon leakage. We consider both energy-saving and carbon-saving (end-of-pipe) technologies, such as carbon capture and storage (CCS). To do so, we combine a computable general equilibrium (CGE) model of North-South trade with assumptions about R&D-based technological change to simulate counterfactual climate policies in the North. We model both a carbon tax and a carbon tariff levied on imports from South to North. Both policies drive an increase in R&D in carbon-saving technologies which comes primarily at the expense of investment in other sectors. Carbon-saving technology allows the North to meet its carbon reduction target without abating as much fossil fuel use, leaving demand and international prices for fossil fuels closer to pre-policy levels. Reduced R&D in energy and energy-intensive sectors raises the cost of production in these sectors. Both effects mitigate carbon leakage in the South. Technology diffusion to the South has a modest effect on leakage under the carbon tax. It leads to somewhat larger reductions in leakage when the cap is paired with carbon tariffs, as the tariffs provide an incentive for the South to adopt carbon-saving technologies developed in the North.
    Keywords: induced innovation, R&D, carbon leakage, carbon tariffs, carbon tax, carbon cap, technology diffusion, knowledge spillovers, computable general equilibrium
    JEL: C68 F10 O30 Q43 Q55
    Date: 2022–08
  23. By: Keith Head (UBC - University of British Columbia); Thierry Mayer (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)
    Abstract: One of the pillars of the 1957 Treaty of Rome that ultimately led to the European Union is the commitment to the four freedoms of movement (goods, services, persons, and capital). Over the following decades, as the members expanded in numbers, they also sought to deepen the integration amongst themselves in all four dimensions. This paper estimates the success of these policies based primarily on a gravity framework. Distinct from past evaluations, we augment the traditional equation for international flows with the corresponding intra-national flows, permitting us to distinguish welfare-improving reductions in frictions from Fortress-Europe effects. We complement the gravity approach by measuring the extent of price convergence. We compare both quantity and price assessments of free movement with corresponding estimates for the 50 American states.
    Date: 2021–05–01
  24. By: Han-Sol Lee; Sergey U. Chernikov; Szabolcs Nagy
    Abstract: Considering the growing significance of Eurasian economic ties because of South Korea s New Northern Policy and Russia s New Eastern Policy, this study investigates the motivations and locational factors of South Korean foreign direct investment (FDI) in three countries in the Commonwealth of Independent States (CIS: Kazakhstan, Russia, and Uzbekistan) by employing panel analysis (pooled ordinary least squares (OLS), fixed effects, random effects) using data from 1993 to 2017. The results show the positive and significant coefficients of GDP, resource endowments, and inflation. Unlike conventional South Korean outward FDI, labour-seeking is not defined as a primary purpose. Exchange rates, political rights, and civil liberties are identified as insignificant. The authors conclude that South Korean FDI in Kazakhstan, Russia, and Uzbekistan is associated with market-seeking (particularly in Kazakhstan and Russia) and natural resource-seeking, especially the former. From a policy perspective, our empirical evidence suggests that these countries host governments could implement mechanisms to facilitate the movement of goods across regions and countries to increase the attractiveness of small local markets. The South Korean government could develop financial support and risk sharing programmes to enhance natural resource-seeking investments and mutual exchange programmes to overcome the red syndrome complex in South Korean society.
    Date: 2022–12
  25. By: Lee, SeogKi (Korea Institute for Industrial Economics and Trade)
    Abstract: North Korea’s light industry has developed thanks to the nation’s adoption of market principles and the advent a limited economic recovery, in the 2000s, diverging from the growth path of the 1990s. Exports have boosted the textiles and garments industries and expanding supply to the domestic market. The food processing and household good sectors have rapidly grown in serving the domestic market. The percentage of medium and large businesses supplying markets nationwide has also grown, and both are key drivers of North Korea’s light industry. Such development indicates greater potential and opportunities for the two Koreas to collaborate. Once United Nations sanctions on North Korea are eased or lifted, cross-border economic cooperation should fully resume, especially in light industry, where restrictions on region, sector and method of collaboration are lax. Against this backdrop, South Korea should focus on removing hurdles to the expansion of economic cooperation with North Korea in light industry, rather than providing direct support.
    Keywords: Cross-border Economic Cooperation; Food Processing; Household Good Sectors
    JEL: P31
    Date: 2022–07–29
  26. By: Duleep, Harriet; Dowhan, Dan; Liu, Xingfei
    Abstract: Using historical, longitudinal data on individuals, we track the earnings of immigrant and U.S.-born women. Following individuals, instead of synthetic cohorts, avoids biases in earnings-growth estimates caused by compositional changes in the cohorts that are followed. The historical data contradict key predictions of the Family Investment Hypothesis, shed light on its genesis, and inform its further testing. Challenging the perception that the quality of U.S. immigrants fell after the 1965 Immigration and Nationality Act, immigrant women, as previously found for immigrant men, have high earnings growth.
    Keywords: Immigrant earning growth, human capital investment, skill transferability, immigrant quality, sample restrictions, family investment model
    JEL: J15 J16 J24 J31 C1
    Date: 2023
  27. By: Mattos, Enlinson; Bressan, Rafael
    Abstract: This paper leverages an exogenous tariff reform in Brazil with rich administrative data to document the elasticity of customs duties evasion (ECDE) for the universe of importers in Brazil. We focus on the role of two modulators of ECDE: (i) nontariff barriers (NTB) and (ii) trading companies. Our findings are threefold. First, we estimate the elasticity of misreported imports to be larger than that in comparable literature. Controlling for misclassification, our results suggest an increase of 2.43% in evasion for each percentage point increase in tariff rate for missing values and 1.45% for missing quantities. Second, NTBs can reduce the elasticity of evasion up to 0.91 and -0.06, for value and quantity, respectively. This finding reinforces the NTB’s stricter enforcement role due to its papertrail. Third, we find no evidence that trading companies evade differently than other importers. Auditing policies and reputation concerns are investigated.
    Date: 2022–12–19
  28. By: Ernesto Dal Bó; Karolina Hutková; Lukas Leucht; Noam Yuchtman
    Abstract: We evaluate the role of taxes on trade in the development of imperial Britain’s fiscal-military state. Influential work, e.g., Brewer’s (1989) "Sinews of Power, " attributed increased fiscal capacity to the taxation of domestic, rather than traded, goods: excise revenues, coarsely associated with domestic goods, grew faster than customs revenues. We construct new historical revenue series disaggregating excise revenues from traded and domestic goods. We find substantial growth in taxes on traded goods, accounting for over half of indirect taxation around 1800. This challenges the conventional wisdom attributing the development of the British state to domestic factors: international factors mattered, too.
    JEL: H2 N43 P1
    Date: 2022–12
  29. By: Eric Heyer (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Xavier Timbeau (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: En 2020, le commerce international a reculé pour la deuxième fois en vingt ans. Selon les données du FMI, le volume des échanges internationaux en biens et services a diminué de 9 % l'année dernière. Un tel recul du commerce international n'avait pas été observé depuis 2008 avec les effets de la crise financière (baisse de 11 % du volume des échanges). Si quantitativement les chutes observées en 2008 et en 2020 sont comparables, des différences qualitatives émergent. À la suite de la crise des subprime la chute des échanges commerciaux a eu lieu à un moment où le PIB mondial se stabilisait, à la faveur de la résilience de la croissance dans les économies émergentes (graphique 1). Ceci s'explique en grande partie par l'ampleur d'une crise forte et durable dans les économies avancées poussant les entreprises à diminuer leurs dépenses d'investissement. Or, comme les biens d'équipement sont fortement échangés entre pays, le choc a pesé de façon disproportionnée sur les flux de commerce international1. En 2020, la forte baisse du commerce international (-9 %) a été plus en phase avec l'évolution du PIB mondial (-3, 3 % selon le FMI) même si l'élasticité reste largement supérieure à l'unité (2, 72). [Premier paragraphe]
    Keywords: crise sanitaire, pandémie, croissance, commerce international, covid-19, crise financière
    Date: 2021–04
  30. By: Hélène Benveniste (Harvard University [Cambridge]); Michael Oppenheimer (Princeton University); Marc Fleurbaey (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: Migration is a widely used adaptation strategy to climate change impacts. Yet resource constraints caused by such impacts may limit the ability to migrate, thereby leading to immobility. Here we provide a quantitative, global analysis of reduced international mobility due to resource deprivation caused by climate change. We incorporate both migration dynamics and within-region income distributions in an integrated assessment model. We show that climate change induces decreases in emigration of lowest-income levels by over 10% in 2100 for medium development and climate scenarios compared with no climate change and by up to 35% for more pessimistic scenarios including catastrophic damages. This effect would leave resource-constrained populations extremely vulnerable to both subsequent climate change impacts and increased poverty.
    Date: 2022–07
  31. By: Ohyun Kwon; Jangsu Yoon; Yoto V. Yotov
    Abstract: We propose a Generalized Poisson-Pseudo Maximum Likelihood (G-PPML) estimator that relaxes the PPML estimator’s assumption that the dependent variable’s conditional variance is proportional to its conditional mean. Instead, we employ an iterated Generalized Method of Moments (iGMM) to estimate the conditional variance of the dependent variable directly from the data, thus encompassing the standard estimators in international trade literature (i.e., PPML, Gamma-PML, and OLS) as special cases. With conditional variance estimates, GPPML generates coefficient estimates that are more efficient and robust to the underlying data generating process. After establishing the consistency and the asymptotic properties of the G-PPML estimator, we use Monte Carlo simulations to demonstrate that G-PPML shows decent finite-sample performance regardless of the underlying assumption about the conditional variance. Estimations of a canonical gravity model with trade data reinforce the properties of G-PPML and validate the practical importance of our methods.
    Keywords: Poisson-Pseudo Maximum Likelihood, Iterated GMM, Gravity Models
    JEL: C13 C50 F10
    Date: 2022
  32. By: Giovanni Peri; Reem Zaiour
    Abstract: From the beginning of the Covid-19 pandemic to late 2021, international immigration flows to the US decreased significantly. We document the timing and the characteristics of these significant changes in flows, their evolution until late 2022 and their geographic and sector distribution. We consider, in a similar way, changes in internal native mobility in the US, before and after Covid-19. We then connect cross-state native mobility to foreign immigration, the emergence of remote-work options, and changes in labor demand, before and after Covid. In spite of the large changes in labor markets and international migration, we do not measure any significant changes in native internal mobility. Then, using a panel regression and a shift-share IV, we find that the post-Covid drop in immigration and differential increase in remote-work options across sectors and states were not associated with changes in natives' cross-state mobility. We discuss possible implications of the decline in immigration and low native mobility on unfilled jobs in local labor markets.
    JEL: J61
    Date: 2022–12
  33. By: Juan Moreno-Cruz; Anthony Harding
    Abstract: We propose a theory of climate-policy motivated foreign intervention to study different forms of international climate governance in the presence of power imbalance. Foreign countries have at least three options to intervene in another country’s domestic climate policy: i.) Agreements with Extraction; ii.) Agreements with Transfers; and iii.) Agreements with Sanctions. We distill the fundamental properties of different climate policy options into a simple parameterization and examine the incentivizes and preferences for each type of foreign intervention. We find that the preference for the type of foreign intervention depends critically on the policy externality of different domestic climate policies.
    Keywords: climate change, mitigation, adaptation, geoengineering, international environmental agreements
    JEL: Q54 Q55 C72
    Date: 2022
  34. By: Tulun, Teoman Ertuğrul (Center For Eurasian Studies (AVİM))
    Abstract: Russian Foreign Ministry Spokeswoman Maria Zakharova made a statement on 19 December 2022 regarding Greece's intentions to start supplying Ukraine with S-300 anti-aircraft missile systems. Ambassador Andrey Maslov, Ambassador of the Russian Federation to Athens, stated on July 26, 2022, "Since the end of February, our bilateral relations have been destroyed, they no longer exist". Greece increasingly pursues a revisionist policy in the Eastern Mediterranean region and Aegean. The Dodecanese were ceded to Greece with Article 14 of the 1947 Paris Treaty of Peace between the Allied Powers and Italy. It is a known fact that Greece continues to militarize these islands, openly violates an important Treaty that ended the Second World War.
    Date: 2022–12–28
  35. By: Kospentaris, Ioannis; Stratton, Leslie S.
    Abstract: We describe how ethnic disparities in the labor market between prime aged Hispanic and non-Hispanic white men have evolved over the last 50 years. Using data from the March CPS, the Census, and the ACS, we examine several employment and earning outcomes. Hispanics have experienced sizable gains to employment: from a negative 2% prior to 1990 to a positive 4% after 2010 compared to non-Hispanics. In terms of earnings, Hispanics face a substantial negative disparity between 20% and 30% with some improvement after 2000. Most of the employment gain is driven by those with less than a high school degree, while the earnings disparity increases with education. Comparing Hispanic immigrants with natives reveals much of the employment and earnings gains are attributable to Hispanic immigrants, particularly immigrants not fluent in English.
    Keywords: Hispanics, ethnicity, disparities, earnings, employment, education, immigration
    JEL: J15 J21 J31 J71
    Date: 2023
  36. By: M. P. Ram Mohan; Aditya Gupta
    Abstract: Intellectual Property (IP) assets enjoy a unique advantage in tax planning. Owing to their intangible nature and the lack of a physical attribution, IP assets can be methodologically parked to transfer income between tax jurisdictions. In 2016, the Delhi High Court was presented with a dispute where IP assets registered in India were transferred between an Australian and English company through their subsidiary holdings in Mauritius. The question before the Court was which tax jurisdiction, India, Australia or Mauritius, would be entitled to tax the capital gains arising from the transaction. The Court held that if a foreign corporation owns an IP asset, regardless of its registration and use in India, it would be taxed by the jurisdiction of the owner’s residence. Coming to its conclusion, the Indian Court found a legislative vacuum in the Indian Income Tax Act, 1961, and relied on the doctrine of Mobilia Sequuntur Personam to fill the lacunae. The present study examines the relevance of the doctrine in line with precedential guidelines and the international treaty framework. The paper reveals that, either inadvertently or by design, the Indo-Mauritian DTAA creates an instance of double tax exemption of Mauritian-owned, Indian-registered IP assets.
    Date: 2023–01–01
  37. By: Kohnert, Dirk
    Abstract: With the attack on the Capitol by the 'Proud Boys', Donald Trump's 'deep state' allegations reached the peak of US conspiracy ideologies. Conspiracy was at the core of Trump's policies, including his repeated claims that President Barack Obama was born in Africa. It reflects Trump's deep dislike of African states. After all, a third of the Republican electorate agreed with the far-right QAnon paranoia and other bizarre conspiracy theories. From the outside, the United States was taking on the shape of a banana republic. When US media identified a South African journalist as the mastermind behind QAnon's global rollout in 2019, many Republicans equated Africa with Pandora's box. However, it is no coincidence that the black continent is associated with occult powers. In the social sciences, the modernity of witchcraft beliefs in Africa has been debated hotly for decades. Modern techniques and utensils have become central to the occult's continued importance to Africans. The crisis of the modern nation-state is closely intertwined with the global spread of neoliberal capitalism and the 'invisible hand' that shapes its political and material conditions and forms of society. Beliefs in witchcraft and zombies reflect the alienation of labour, capitalist exploitation, and class formation in African societies. The poor of Africa and the people of the Global South in general, do not lack modernity but have been denied the promise of modernization. Today, even cybercriminals working in the Ivory Coast, impersonating Europeans on social media profiles and seducing partners into falling in love with them, feel compelled to seek the advice of witch doctors to outwit their prey. Given the worldwide importance of social media, this suggests that the virtual space of the global economy as a hotbed of magic and witchcraft is under researched. As in the US election campaign and its entanglement with fake news, examination of the cosmology of the occult in Africa and elsewhere reveals the threat of destructive forces inherent in social relations. African religions could provide a framework for valuable self-determined solutions to current problems in contemporary life, including the issue of witchcraft violence. In addition, this could open up an inspiring new dimension of philosophical thinking and emancipative action to the outside world, for example, regarding conflict resolution and reconciliation.
    Keywords: Global economy; conspiracy theories; deep state; Trump government; African occult belief; modernization; neoliberalism; commodification; international trade; migration; governance; sustainable development; post-colonialism; Sub-Saharan Africa; South Africa; Nigeria; Kenya; Ivory Coast; African Studies
    JEL: E26 F15 F16 F22 F54 F65 I31 J15 J46 J61 N37 O17 P17 Z13
    Date: 2023–01–08
  38. By: Takuma Kunieda (School of Economics, Kwansei Gakuin University); Kazuo Nishimura (Kobe University and Research Institute of Economy, Trade and Industry)
    Abstract: To investigate the macroeconomic effects of capital account liberalization, we apply a dynamic general equilibrium model with two production sectors. In contrast to the literature on belief-driven sunspot fluctuations caused by production externalities, our model does not assume any production externalities. In our model, agents face ï¬ nancial constraints and production heterogeneity. The ï¬ nancial constraints and agents’ production heterogeneity are sources of dynamic inefficiency. Although indeterminacy of equilibrium and belief-driven sunspot fluctuations never occur in the closed economy, dynamic inefficiency combined with a negative foreign asset in the steady state produces indeterminacy in the small open economy if ï¬ nancial constraints are fully relaxed under the condition that the investment goods sector is more labor intensive than the consumption goods sector.
    Keywords: Two-sector growth model; small open economy; ï¬ nancial constraints; heterogeneous agents; dynamic inefficiency; indeterminacy.
    JEL: E32 F36 F43 O41
    Date: 2023–01
  39. By: Bacasmas, Jill Angeli V.; Katigbak, Jovito Jose P.; Carlos, Jean Clarisse T.
    Abstract: Operationalizing a SWOT (strengths, weaknesses, opportunities, and threats) framework to process data gathered from an adapted diagnostic toolkit entitled “Women-Owned Businesses in Cross-border E-commerce: a Diagnostic Toolkit, ” this study reveals that regional and national policy landscapes have put utmost interest in promoting and fostering an enabling environment for women-led micro, small, and medium enterprises and digitalization. However, there are gaps in public-private sector coordination, access to enabling and support programs such as financing and capacity building, awareness due to informality, and scaling-up and sustainability of their e-commerce businesses. Moreover, the results also show that the cross-border e-commerce environment is promising from the point of view of (a) networks, representation, and visibility and (b) digital literacy, e-payments, e-commerce, and digital trade regulations. However, there are areas for improvement, such as in (a) digital literacy, e-payments, and e-commerce and digital trade regulations; (b) discrimination on online platforms; (c) trade facilitation agreement; and (d) logistics and customs duties. Given the diagnostic toolkit and SWOT results, the authors identified key practical policy recommendations for consideration. Comments to this paper are welcome within 60 days from the date of posting. Email
    Keywords: MSMEs;e-commerce;cross-border;trade;digitalization;women-led MSMEs
    Date: 2022
  40. By: Noland, Marcus; Haggard, Stephan
    Abstract: North Korea is experiencing yet another cycle of humanitarian distress. While sanctions are not the primary cause, they are a contributing factor. This essay examines the channels through which sanctions affect the North Korean economy and reaches four conclusions: First, sanctions have contributed to a deterioration of economic performance. Second, the UNSC’s 1718 Sanctions Committee should consider a thorough review to identify goods that would warrant blanket humanitarian exemptions or removal from the sanctions lists altogether. Third, financial sanctions have raised the risk premium on all financial transactions with North Korea; the sanctioning authorities need to do a better job of clarifying transactions permissible under humanitarian exemptions. Finally, while the global community should reassess its policies, the government of North Korea bears responsibility as well. The benefits of sanctions relief will be diminished if North Korea refuses to engage constructively with the international community on a broader range of issues running from basic humanitarian relief to economic reform.
    Keywords: North Korea; sanctions; food insecurity; complex humanitarian emergency
    JEL: F35 F51 H84 P33 Q18
    Date: 2023–01–06

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