nep-int New Economics Papers
on International Trade
Issue of 2023‒05‒22
43 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Trade diversion and labor market adjustment: Vietnam and the U.S.-China trade war By Karin Mayr-Dorn; Gaia Narciso; Duc Anh Dang; Hien Phan
  2. Patterns of global and regional value chain participation in the EAC By Krantz, Sebastian
  3. Intra-industry trade: Revisiting theory and Literature Survey By Aggarwal, Sakshi
  4. The Empire Project: Trade Policy in Interwar Canada By Lampe , Markus; Hjortshøj O’Rourke , Kevin; Reiter , Lorenz; Yotov, Yoto
  5. Do Exporters Import Gender Inequality? By Lark, Olga; Videnord, Josefin
  6. Can the World Trade Organization be saved? Should it? By Alan Wm. Wolff
  7. Are Your Labor Shares Set in Beijing ? The View through the Lens of Global Value Chains By Ariell Reshef; Gianluca Santoni
  8. Disentangling trade reform impacts on firm market and production decisions By Maria Bas; Caroline Paunov
  9. Chinese data governance and trade policy: from cyber sovereignty to the quest for digital hegemony? By Oscar Borgogno; Michele Savini Zangrandi
  10. Trade Shocks and Credit Reallocation By Stefano Federico; Fadi Hassan; Veronica Rappoport
  11. The EU-UK relationship: regulatory divergence and the level playing field By Susana Moreno Sánchez
  12. A (more) systematic exploration of the trade effect of product-specific rules of origin By Julien Gourdon; Karin Gourdon; Jaime de Melo
  13. Imperial Politics, Open Markets and Private Ordering: The Global Grain Trade (1875-1914) By Jérôme Sgard
  14. What the United Kingdom’s new Developing Countries Trading Scheme means for least developed countries (LDCs), including countries in the graduation process By Mohammad Abdur Razzaque
  15. How Far Goods Travel: Global Transport and Supply Chains from 1965-2020 By Sharat Ganapati; Woan Foong Wong
  16. Industrial Decarbonization and Competitiveness: A Domestic Benchmark Intensity Approach By Kopp, Raymond J.; Pizer, William; Rennert, Kevin
  17. Industrial Decarbonization and Competitiveness: Building a Performance Alliance By Kopp, Raymond J.; Pizer, William; Rennert, Kevin
  18. Foreign Technology Adoption as a Flying Propeller By Yunfang Hu; Takuma Kunieda; Kazuo Nishimura; Ping Wang
  19. Economic sectors and globalization channels to gender economic inclusion in Sub-Saharan Africa By Asongu, Simplice A; Odhiambo, Nicholas M
  20. Industrial policy for electric vehicle supply chains and the US-EU fight over the Inflation Reduction Act By Chad P. Bown
  21. On the pass-through of large devaluations By Carlos Casacuberta; Omar Licandro
  22. Populism and the Skill-Content of Globalization: Evidence from the Last 60 Years By Frédéric Docquier; Lucas Guichard; Stefano Iandolo; Hillel Rapoport; Riccardo Turati
  23. Multilateral Comovement in a New Keynesian World: A Little Trade Goes a Long Way By Paul Ho; Pierre-Daniel G. Sarte; Felipe Schwartzman
  24. Export Rebates and Import Charges for Border Tax Adjustments Under an Upstream US GHG Tax: Estimates and Methods By Flannery, Brian; Mares, Jan
  25. The Greenhouse Gas Index for Products in 39 Industrial Sectors By Mares, Jan; Flannery, Brian
  26. Imported carbon emissions: evidence from French manufacturing companies By Dussaux, Damien; Vona, Francesco; Dechezleprêtre, Antoine
  27. The Economic and Geopolitical Consequences of Belt and Road Initiative (BRI)for China: A preliminary model-based analysis By Khan, Haider
  28. The Eurozone's Achilles heel: Reassessing Italy's long decline in the context of European integration and globalization By Dario Guarascio; Philipp Heimberger; Francesco Zezza
  29. Why the proposed Brussels buyers club to procure critical minerals is a bad idea By Cullen S. Hendrix
  30. Addressing the Leakage and Competitiveness Risks of Climate Policy By Aldy, Joseph E.
  31. Global food policy report 2023: Rethinking food crisis responses: Synopsis [in French] By International Food Policy Research Institute (IFPRI)
  32. Measuring transboundary impacts in the 2030 Agenda: Conceptual approach and operationalisation By Junya Ino; Fabrice Murtin; Michal Shinwell
  33. The antecedents of MNC political risk and uncertainty under right-wing populist governments By Sallai, Dorottya; Schnyder, Gerhard; Kinderman, Daniel; Nölke, Andreas
  34. Impact techniques of modelling next-gen infrastructure investment projects to redress regional disparities using multi-regional input-output model By Darlington Agbonifi
  35. Does Official Development Assistance Benefit the Donor Economy? New evidence from Japanese overseas infrastructure projects By NISHITATENO Shuhei
  36. The Effect of the Out of Africa Migration on Cultural Diversity By Wainstock, Daniel Crisóstomo; Galor, Oded; Klemp, Marc
  37. Military Expenditure, Policy Syndromes and Tourism in the World By Simplice A. Asongu; Nicholas M. Odhiambo
  38. Climate change and sustainable growth: international initiatives and European policies. By Leonor Dormido; Isabel Garrido; Pilar L´Hotellerie-Fallois; Javier Santillán
  39. Determining the Greenhouse Gas Index for Covered Products of Specific Manufacturers By Flannery, Brian; Mares, Jan
  40. Inferring comparative advantage via entropy maximization By Matteo Bruno; Dario Mazzilli; Aurelio Patelli; Tiziano Squartini; Fabio Saracco
  41. International Migration in Ireland, 2022 By Philip J. O’Connell
  42. Inequalities in education from a global perspective: Theoretical approaches, dimensions and policy discussions By Langthaler, Margarita; Malik, Julia
  43. The Usual Suspects: Offender Origin, Media Reporting and Natives' Attitudes Towards Immigration By Sekou Keita; Thomas Renault; Jérôme Valette

  1. By: Karin Mayr-Dorn (JKU Linz); Gaia Narciso (Trinity College Dublin); Duc Anh Dang (NCIF); Hien Phan (NCIF)
    Abstract: This paper investigates the effects of the U.S.-China trade war on trade diversion and the labor market outcomes in a third country, Vietnam. We exploit variation in Vietnamese exports following the unexpected and exogenous U.S. tariff hikes on Chinese imports and find that Vietnamese workers and districts more exposed to the trade war display higher employment, longer working hours, and higher wages as a result of the U.S.-China trade war. The effects are mainly driven by women and non-college-educated individuals. Our findings reveal that bilateral trade policies can have substantial spillover effects on trade flows and labor markets in third countries.
    Keywords: trade diversion, trade war
    JEL: F14 F16 R23
    Date: 2023–04
  2. By: Krantz, Sebastian
    Abstract: Using global Multi-Region Input-Output (MRIO) data from 2005-2015, this paper empirically investigates the extent and patterns by which East African Community (EAC) countries have integrated into Global Value Chains (GVCs) and Regional Value Chains (RVCs). Results imply that the foreign content of exports (I2E) and the share of exports being re-exported (E2R) are between 10% and 20% in most EAC countries. During 2005-2015, all EAC members apart from Kenya experienced a decline in E2R. Trade in intermediates with the rest of the world remains 12-14 times greater in value-added (VA) terms than inside the EAC. Kenya expanded its role as a regional supplier of manufactured inputs (higher E2R with EAC partners), and Uganda slightly increased its agricultural input to the Kenyan food processing sector. Furthermore, a downstream shift is evident, by which more VA (both domestic and foreign) is used for the production of final goods while maintaining high levels of exports in primary agriculture and mining. Only Kenya was able to broadly maintain and improve its comparative advantage in manufacturing. Econometric analysis suggests that higher I2E and E2R shares increase GDP with an average elasticity of Ï 0.25 over 2 years. Estimates for manufacturing sectors were slightly higher at elasticities Ï 0.3 in response to E2R shifts. These results imply that policy measures to increase manufacturing competitiveness and promote more horizontal RVCs would benefit EAC economic growth in the medium run.
    Keywords: Regional Integration, Global Value Chains, Africa
    Date: 2023
  3. By: Aggarwal, Sakshi
    Abstract: Early references to intra-industry trade were mostly ignored for many years. It was only in the past two decades that intra-industry trade has received significant attention and has become a leading area for international economists. It has become increasingly common in recent decades due to the growth of international trade, globalization, and the integration of economies. Intra-industry trade can benefit countries by allowing them to specialize in their areas of comparative advantage and to access a wider range of products and services at lower prices. However, it can also pose challenges for some industries and workers who may face increased competition from foreign producers. The purpose of this paper is to review the extensive literature on intra-industry trade, assess the accomplishments of researchers in this area and predict future research directions. The paper evaluates intra-industry trade as a research program and assesses whether it can continue to advance in the future. To organize the paper, the authors evaluate current perspectives in four distinct areas: theory, measurement, empirical evidence, and policy aspects.
    Keywords: Intra-industry trade, imperfect competition, classical theories of trade
    JEL: F11 F12 F14 F16
    Date: 2023–04–27
  4. By: Lampe , Markus (WU-Vienna); Hjortshøj O’Rourke , Kevin (NYU Abu Dhabi); Reiter , Lorenz (WU-Vienna); Yotov, Yoto (Drexel University)
    Abstract: This paper uses a new dataset on the universe of Canadian imports and tariffs between 1924 and 1936, disaggregated into 1697 goods originating in 112 countries, to analyze the impact on Canadian imports of interwar Canadian trade policy, including the 1932 Ottawa trade agreements. Rather than use a dummy variable approach, we compute the impact of individual tariffs which varied substantially across goods, trade partners, and time. We develop a novel method of controlling for multilateral resistances in the context of a one-country dataset, and perform a variety of counterfactual exercises to determine the impact of tariffs on trade flows. The overall impact of post-1929 tariff shifts, including the 1932 agreements, was relatively small, reflecting the fact that Canadian trade policy was already highly protectionist: trade agreements can have heterogeneous effects on participants because the shocks involved are different. Compared with a free trade counterfactual, the impact of the overall structure of protection on the level and composition of trade was large.
    Keywords: Trade policy; Trade Agreements; Interwar Tariffs; Multilateral Resistances; Trade Elasticities; Canada; Empire
    JEL: F13 F14 N72
    Date: 2023–05–05
  5. By: Lark, Olga (Department of Economics, Lund University); Videnord, Josefin (Uppsala University)
    Abstract: We examine whether exposure to gender inequality at export destinations affects the gender wage gap in exporting firms. We motivate the analysis through a stylized model where wages depend on worker productivity, and men have a comparative advantage when trading with gender-unequal countries due to customer discrimination. Empirically, we use high-quality matched employer-employee data from Sweden and calculate how exposed firms are to country-level gender inequality through their export destinations. Although increased export intensity on average leads to a wider within-firm gender wage gap, the effect is entirely driven by trade with gender-unequal countries; we find no impact on the gender wage gap when firms increase their exports to countries with gender-equality levels close to that of Sweden. Female managers, who are most likely to interact with foreign customers, experience the most pronounced negative relative wage effects.
    Keywords: Export; International trade; Gender wage gap; Gender inequality; Customer discrimination; Gender inequality index
    JEL: F14 F16 F66 J16 J31
    Date: 2023–04–27
  6. By: Alan Wm. Wolff (Peterson Institute for International Economics)
    Abstract: Heads of state, trade ministers, and academics have repeatedly called for reforming the World Trade Organization (WTO), the institution charged with the stewardship of the global trading system. The durability and worth of the WTO are being increasingly questioned despite the fact that by almost all objective measures, it has been a great success, with world trade growing much faster than global GDP over the last 75 years. However, past success does not guarantee future performance. This Policy Brief examines the institution's most serious defects and the multitude of challenges it faces. It suggests the institution needs to evolve to reach broad-based international trade agreements, adding much needed new rules to the world trade rulebook and developing effective means to settle disputes that would render the rules of the system enforceable once again.
    Date: 2023–05
  7. By: Ariell Reshef (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, 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); Gianluca Santoni (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)
    Abstract: We study the evolution of labor shares in 1995-2014, while taking into account international trade based on value added concepts. Declines in labor shares accelerate in 2001-2007, concurrently with global value chain (GVC) integration, after which there is no trend for both. We develop a gravity-based instrument for GVC integration and find that the acceleration in the decline in labor shares is caused by increased intensity of forward GVC integration. The integration of China into GVCs has a disproportionally large effect through this mechanism. Declines in labor shares are shouldered mostly by less skilled workers in fabrication functions. Relatively capital abundant countries integrate more into forward GVCs linkages, which is associated with greater upstreamness within GVCs and increases in capital intensity. Forward GVC integration is associated with international vertical integration of both upstream intermediate input production and of offshoring of downstream assembly.
    Keywords: labor share, global value chains, upstreamness
    Date: 2022–05
  8. By: Maria Bas (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Caroline Paunov (OCDE - Organisation de Coopération et de Développement Economiques = Organisation for Economic Co-operation and Development)
    Abstract: This paper disentangles the impacts of trade liberalization on firm market and production decisions. Using firm-product data for Ecuador, we exploit exogenous tariff changes at entry to the World Trade Organization and find positive effects of trade liberalization on revenue total factor productivity (TFP-R). Input-trade liberalization improves firm efficiency, measured by quantity total factor productivity (TFP-Q) and leads firms to raise their markups and to introduce new products following an increase in imported input quality. Output-trade liberalization also improves firm efficiency and raises marginal costs as firms increase input quality and improve the quality of their core products. Firms' markups and product scope decrease. Chinese imports also contributed positively to productivity while the exchange rate's volatility prior to dollarization had reverse effects. We find positive welfare effects as consumers were offered better and cheaper products. Trade liberalization also benefited the more productive firms introduce new or better products while less productive firms were more likely to exit.
    Keywords: Gains from trade, Input and output tariff reduction, Revenue and physical quantity total factor productivity (TFP-R, TFP-Q), Markups, Output and input prices, Firm-product-level data, Ecuador
    Date: 2021–06
  9. By: Oscar Borgogno (Bank of Italy); Michele Savini Zangrandi (Bank of Italy)
    Abstract: The paper provides an up-to-date overview of the data governance framework developed by the People’s Republic of China. The work investigates whether and how the domestic legal framework on data governance has influenced Chinese trade policy with reference to cross-border data flows and e-commerce issues (at the WTO and G20 level). This study shows that Chinese data governance features a two-pronged legal architecture in which the Cyberspace Administration of China plays a prominent role. By prioritizing the need to maintain party-state domestic control across the digital economy, China has proved to be extremely averse to any international agreement that could undermine its domestic data governance framework.
    Keywords: data governance, digital infrastructure, China, data sovereignty, digital trade
    JEL: K20 K33 O33 P33 P37
  10. By: Stefano Federico; Fadi Hassan; Veronica Rappoport
    Abstract: This paper identifies a credit-supply contraction that arises endogenously after trade liberalization. Banks with loan portfolios concentrated in sectors exposed to competition from China face an increase in non-performing loans after China’s entry into the World Trade Organization. As a result, they reduce the supply of credit to firms, irrespective of the firm’s sector of operation. This cut in credit translates into lower employment, investment, and output. Through this mechanism, the financial channel amplifies the shock to firms already hit by import competition from China and passes it on to firms in sectors expected to expand upon trade liberalization.
    JEL: F1 F60 G21
    Date: 2023–04
  11. By: Susana Moreno Sánchez (Banco de España)
    Abstract: Since the United Kingdom’s departure from the EU, policy decisions made by both the UK and the EU will, over time, lead to regulatory divergence and create barriers to trade between the two separate regulatory and legal spaces. The UK government has already undertaken a comprehensive review of all retained EU law, to reap the benefits of its regulatory autonomy, and specific regulatory reforms have been identified in high-growth sectors. Yet there are some constraints. The UK has committed to respecting certain EU and international standards provided for in the Trade and Cooperation Agreement concluded with the EU. Most notably, a common level of protection is secured in certain areas deemed relevant for the level playing field, such as subsidy control, taxation, labour and social standards and environment and climate, although the strength of the level playing field safeguards differs considerably by area. Moreover, regulatory divergence would come at the expense of single market access. In this setting, certain regulatory measures and subsidies granted to economic operators could be a potential source of political friction between the EU and the United Kingdom and could lead to future legal disputes under the Trade and Cooperation Agreement. At the first meeting of the Trade Specialised Committee on Level Playing Field for Open and Fair Competition and Sustainable Development held on 12 October 2021, EU and UK representatives addressed issues related to subsidy control (the UK’s Subsidy Control Bill and the EU’s proposed Regulation on foreign subsidies), specific subsidies (the UK’s renewable energy schemes and the EU’s Brexit Adjustment Reserve) and several regulatory initiatives on labour and social standards and environment and climate. These technical discussions could prove crucial in limiting the risk of EU-UK disputes arising in level playing field issues.
    Keywords: Brexit, EU-UK relationship, Trade and Cooperation Agreement (TCA), level playing field (LPF), regulatory autonomy, regulatory divergence
    JEL: F53 K33
    Date: 2022–09
  12. By: Julien Gourdon (CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne, AFD - Agence française de développement); Karin Gourdon (World Bank Group); Jaime de Melo (FERDI - Fondation pour les Etudes et Recherches sur le Développement International)
    Abstract: Rules of Origin (RoO) are critical components of Preferential Trade Agreements (PTAs). They are designed to stop products coming into a PTA through the partner that applies the lowest tariff – a phenomenon known as trade deflection. While RoO are necessary, complex RoO may undo the benefits of trade agreements. Using a novel database of RoO, this paper evaluates the incidence and restrictiveness of different types of Product-Specific Rules of Origin (PSRs) across 128 reciprocal PTAs for the period 1990 - 2015. Results, based on a structural gravity model controlling for confounding factors, display wide heterogeneity across different categories of PSRs attached to preferential margins, with more flexible PSRs associated with a significantly stronger trade effect compared to more restrictive ones where exporters do not have a choice among PSRs or have to satisfy multiple PSRs. A simulation exercise reveals that a radical simplification reform leading to the adoption of flexible PSRs providing alternative choices to prove origin would have increased global trade under PTAs on average by between 2.7 and 4 percent during the sample period
    Keywords: Rules of origin, Product-specific rules of origin, Regime-wide rules of origin, Compliance costs
    Date: 2023–04–01
  13. By: Jérôme Sgard (CERI - Centre de recherches internationales (Sciences Po, CNRS) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)
    Abstract: From the 1870s onwards, global commodity markets were all governed by self-standing private bodies, typically controlled by elite merchants. The London Corn Trade Association thus standardized supply from across the world, turning grain into a fungible commodity; it arbitrated disputes; and it offered to traders a range of standard contracts that integrated the value chains, from the various export harbors till destination. Enforcement rested on market power and the threat of blacklisting, which were inherently extra-territorial: few merchant houses in the world could afford being expelled from the London market. On the other hand, governments, whether sovereign or colonial, played a very limited direct role in how transactions were conducted. Ultimately, however, this private trading platform worked under English law exclusively and it was upheld by both the London courts and the Bank of England. It was both global and local, and hence a full part of Britain's imperial project. It policed a global network of private commercial routes while mediating the demands for market integration and the sheer instability of the global political geography. Rule-based market power should thus be seen as a specific factor in Britain's economic supremacy, together with relative productivity levels or capital exports.
    Keywords: grain trade, market governance, imperialism, globalization, United Kingdom
    Date: 2023–04
  14. By: Mohammad Abdur Razzaque
    Abstract: The United Kingdom has adopted a new Developing Countries Trading Scheme (DCTS) which comprises three different regimes – one for least developed countries (LDCs), one for non-LDC economically vulnerable low-income and lower-middle-income countries, and one for other low-income and lower-middle-income countries. Compared to the previous scheme, which largely mirrored the European Union’s, the DCTS makes it easier for an LDC to accede to the intermediary “Enhanced Preferences†scheme when it graduates. For most countries, graduation from the LDC category will have little impact on trade with the United Kingdom, and less impact than it might have had under the previous regime. Impacts will be greater for countries whose main exports are not covered by Enhanced Preferences, such as certain agricultural products, or whose exporters are unable to comply with the more stringent rules of origin than those applied to LDCs.
    JEL: F13
    Date: 2023–03
  15. By: Sharat Ganapati; Woan Foong Wong
    Abstract: This paper considers the evolution of global transportation usage over the past half century and its implications for supply chains. Transportation usage per unit of real output has more than doubled as costs decreased by a third. Participation of emerging economies in world trade and longer-distance trade between countries contribute to this usage increase, thereby encouraging longer supply chains. We discuss technological advances over this period, and their interactions with endogenous responses from transportation costs and supply chain linkages. Supply chains involving more countries and longer distances are reflective of reliable and efficient transportation, but are also more exposed to disruptions, highlighting the importance of considering the interconnectedness of transportation and supply chains in policymaking and future work.
    JEL: F14 F15 L91 R4 R41
    Date: 2023–04
  16. By: Kopp, Raymond J. (Resources for the Future); Pizer, William (Resources for the Future); Rennert, Kevin (Resources for the Future)
    Abstract: To achieve the net-zero ambitions of the Paris Agreement, emissions from the “hard-to-abate, †greenhouse gas–intensive industrial sectors (steel, aluminum, cement, and chemicals) must be reduced. The pace of current decarbonization efforts will be aided by the introduction of new low- and zero-carbon production technologies driven by government policies. In many cases, products from these sectors are exchanged on highly competitive international markets, raising concerns that domestic decarbonization policies could result in lost competitive advantage vis-à -vis nations with weaker environmental policies.To address such competitiveness concerns, decisionmakers have proposed policies to couple domestic industrial decarbonization efforts with trade policies and thereby address three goals: a) maintain domestic competitiveness against imports produced in countries with relatively weaker environmental policies, b) maintain competitiveness in export markets, and c) provide incentives for trading partners to improve their environmental performances. A prominent example of such a trade policy is a carbon border adjustment mechanism (CBAM) that applies a fee to imported goods. A proposed CBAM is under active discussion in the European Union and CBAM legislation is in the early stages of development within the US Congress. Traditionally, trade policies to address competitiveness concerns have been proposed as a layer on top of a country’s preexisting approach to decarbonizing the industrial sector. Another approach, which may be more appropriate for the current state of global climate policy, is to design an industrial decarbonization policy that natively and explicitly addresses competitiveness concerns.This issue brief outlines such an alternative approach. This policy would define a performance metric for a selected set of industrial sectors and apply a fee based on the greenhouse gas (GHG) content of produced goods in those sectors, but only to the extent the goods’ GHG content exceeds the metric. The fee would be applied equally to both foreign and domestically produced goods, maintaining a level playing field. Overall, this policy approach inherently addresses competitiveness concerns and creates incentives to reduce emissions down to the performance metric, while offering additional advantages. By starting with a performance metric close to current US industrial performance, it would primarily affect those trading partners with higher emissions and not US producers. By assessing the fee only on emissions above the performance metric, the metric would reduce potential effects on the price of regulated industrial goods compared to a traditional carbon price, thereby minimizing downstream and export disruptions.In a follow-on issue brief, we will introduce the idea of an alliance of like-minded nations working to drive decarbonization in selected industrial sectors through an alignment of comparable efforts. Such an alignment would level the playing field of economic competition and negate the need for border measures within the alliance. Border measures would continue to be imposed on countries that do not choose to meet the minimum comparable effort and join the alliance.
    Date: 2022–05–12
  17. By: Kopp, Raymond J. (Resources for the Future); Pizer, William (Resources for the Future); Rennert, Kevin (Resources for the Future)
    Abstract: Reducing greenhouse gas (GHG) emissions from carbon-intensive industrial sectors like steel, aluminum, cement, and chemicals will be aided by the introduction of new low- and zero-carbon production process technologies. While the cost of new technologies will decline over time, in the short run they will likely cost more than more carbon-intensive, incumbent technologies. When the products from these sectors are exchanged on highly competitive international markets, decarbonization efforts could therefore lead to lost competitive advantage vis-à -vis nations with weaker environmental policies.A recent issue brief, “Industrial Decarbonization and Competitiveness: A Domestic Benchmark Approach†(hereafter, “Benchmark†), introduced an idea for a domestic emissions reduction policy that targets the US industrial sector, paired with a border adjustment tariff. The Clean Competition Act recently introduced by Senator Sheldon Whitehouse (D-RI) builds on the paired policy structure. As US industry continues to decarbonize, these paired policies would protect domestic producers from competitive imports, maintain competitiveness in export markets, and provide incentives for trading partners to increase environmental ambition.In this issue brief, we introduce the related idea of a “performance alliance†in which a group of countries align industrial decarbonization efforts and trade policies to maintain competitiveness, limit leakage of emissions, and provide incentives for others to pursue ambitious decarbonization policies. This idea can be traced to work on “climate clubs, †initially popularized by William Nordhaus. The most recent reference to a climate club can be found in the G7 Leaders Communiqué, released May 20, 2022. Catalyzing leadership, action, and inclusivity is a key element of the G7 grouping and suggests the idea of an alliance more than the notion of exclusivity and protectionism suggested by a club.The international policy proposed in the Clean Competition Act and the EU carbon border adjustment mechanism (CBAM) proposal point to implicit climate clubs. In the EU case, a nation exporting primary commodities to the European Union could be a member of the club if that nation imposes a carbon price on its domestic production. That carbon price for the nation’s primary commodities would have to be equal to or greater in magnitude to the price charged within the European Union. In such a case the exporting nation does not face an EU-imposed border fee. In the case of the Clean Competition Act, a nation exporting primary commodities to the United States could be a member of the club if the GHG intensity of its domestic primary commodity production is less than the US benchmark intensity. In such a case the exporting nation does not face a US-imposed border fee. If one were to consider the Clean Competition Act and the EU CBAM as forms of climate clubs, true members of each club might further align their own border measures to match the European Union and the United States.Admission to such an EU club requires the adoption of a common policy to address emissions from the industrial sector; that policy is a specific and explicit carbon price. Admission to such a US club requires environmental performance on a par with the United States, where that performance is measured in terms of GHG intensity of production. We might think of the EU approach as a policy club, while thinking of the US as a performance club.In the remainder of this issue brief we elaborate on the idea of an alliance, rather than a “club, †where members work to drive industrial sector decarbonization–this would happen through an alignment of efforts and advanced technology that levels the playing field of economic competition and negates the need for border measures within the alliance. Border measures would remain a component of this approach for countries that do not choose to increase their ambition and join the alliance. The border measures need not be harmonized among the alliance members. This reduces the protectionist feel of the alliance.
    Date: 2022–07–06
  18. By: Yunfang Hu; Takuma Kunieda; Kazuo Nishimura; Ping Wang
    Abstract: We construct a dynamic general equilibrium model of foreign direct investment (FDI) and foreign technology adoption, incorporating adoption barriers, international technology spillover, and relative price advantages. A higher FDI conversion efficacy, a lower adoption barrier, or a stronger international technology spillover, together with a lower relative price of FDI, can propel an economy to exhibit a flying geese paradigm escaping from a middle-income trap and catching up with the world frontier. We calibrate the model to eight representative Asian economies, including Asian Tigers and less-developed countries. Growth accounting exercises show that total factor productivity, FDI conversion efficacy, and foreign technology spillover drive Asian Tigers’ growth miracle, whereas a reduced adoption barrier and a favorable relative price of FDI are more crucial for the growth of less-developed Asian economies. The counterfactual analysis confirms that technology-embodied FDI serves as a flying propeller, explaining almost two-thirds of their economic growth.
    JEL: E20 F21 O40
    Date: 2023–04
  19. By: Asongu, Simplice A; Odhiambo, Nicholas M
    Abstract: This study complements the extant literature by assessing economic sector and globalization channels for gender economic inclusion. The study is focused on 35 countries in sub-Saharan Africa for the period 1995-2019 and the empirical evidence is based on fixed effects regressions. The following findings are established. First, economic and political globalization positively affect female employment in agriculture and the positive effect of economic globalization is driven by the trade globalization dynamic while social globalization negatively affects female employment in agriculture and the negative effect of social globalization is driven by cultural and informational globalization dynamics. Second, aggregate globalization and sub-components (i.e. economic globalization, social globalization and political globalization) negatively affect gender employment in the industry and the negative effect is driven by the financial globalization sub-component of economic globalization and by the informational and cultural components of social globalization. Third, aggregate globalization and sub-components positively affect gender employment in the service sector and the corresponding positive effect is driven by the trade globalization sub-component of economic globalization and by all sub-components (i.e. interpersonal, informational and cultural dimensions) of social globalization. In the terms of policy implications, policy makers should focus on promoting dimensions of globalization that are established to positively influence female employment as well as put in place measures that are designed to reverse the negative incidence of globalization dynamics that have been established to affect female employment. Moreover, policy makers should also be aware of the fact that when formulating the corresponding policies, the effect of globalization is contingent on globalization dynamics as well as on various economic sectors.
    Keywords: Mobile money; technology; diffusion; financial inclusion; inclusive innovation, information asymmetry
    Date: 2023–04
  20. By: Chad P. Bown (Peterson Institute for International Economics)
    Abstract: The Inflation Reduction Act (IRA) of 2022 provoked a transatlantic trade spat. After the law was passed, the Biden administration addressed some of the concerns raised by the European Union by writing controversial rules to implement the legislation. These regulations are expected to have complex effects that, in some instances, may offset the intended impact of other provisions in the original legislation. This paper examines how the law, its implementing regulations, policy decisions on leasing, as well as potential critical minerals agreements all have the potential to affect the electric vehicle (EV) supply chain. The EV case study showcases the political-economic complications involved in US and EU attempts to cooperate over clean energy transition policy to address the global externality of carbon dioxide emissions. EVs are but one example of the challenge facing partners with integrated supply chains and similar levels of economic development that share concerns about climate change, rising inequality, workers, other social issues, and democracy itself. The EV conflict laid bare the differing US and EU prioritization of these issues relative to economic efficiency, World Trade Organization rules, the approach to nonmarket economies, and national security vulnerabilities that arise from depending on an authoritarian regime such as China for import sourcing of critical inputs.
    Keywords: Electric vehicles, industrial policy, supply chains, climate, US, EU
    JEL: L52 F13
    Date: 2023–05
  21. By: Carlos Casacuberta; Omar Licandro
    Abstract: In 2002 Uruguay faced a sudden stop of international capital flows, inducing a deep financial crisis and a large devaluation of the peso. The real exchange rate depreciated and exports expanded. Paradoxically, export shares and real exchange rates negatively correlate among Uruguayan exporters around 2002. To unravel this paradox, we develop a small open economy model of heterogeneous firms. Domestic firms are price takers in the international market, operate under monopolistic competition in the domestic market, and face financial constraints when exporting. Confronted to a large nominal devaluation, financial constraints deepen. Financially constrained exporters cannot optimally expand in the export market and react by passing-through the devaluation to the domestic price only partially, expanding domestic sales. As a consequence, the more financially constrained exporters are, the less their export shares expand and the more their firm specific real exchange rates depreciate. As a result, export shares and real exchange rates of exporters are negatively correlated as in the data.
    Date: 2023
  22. By: Frédéric Docquier; Lucas Guichard; Stefano Iandolo; Hillel Rapoport; Riccardo Turati
    Abstract: We analyze the long-run evolution of populism and explore the role of globalization in shaping such evolution. We use an imbalanced panel of 628 national elections in 55 countries over 60 years. A rst novelty is our reliance on both standard (e.g., the "volume margin", or vote share of populist parties) and new (e.g., the "mean margin", a continuous vote-weighted average of populism scores of all parties) measures of the extent of populism. We show that levels of populism in the world have strongly fluctuated since the 1960s, peaking after each major economic crisis and reaching an all-time high – especially for right-wing populism in Europe – after the great recession of 2007-10. The second novelty is that when we investigate the "global" determinants of populism, we look at trade and immigration jointly and consider their size as well as their skill-structure. Using OLS, PPML and IV regressions, our results consistently suggest that populism responds to globalization shocks in a way which is closely linked to the skill structure of these shocks. Imports of low-skill labor intensive goods increase both total and right-wing populism at the volume and mean margins, and more so in times of de-industrialization and of internet expansion. Low-skill immigration, on the other hand, tends to induce a transfer of votes from left-wing to right-wing populist parties, apparently without aecting the total. Finally, imports of high-skill labor intensive goods, as well as high-skill immigration, tend to reduce the volume of populism.
    Keywords: Populism;Globalization
    Date: 2023–04
  23. By: Paul Ho; Pierre-Daniel G. Sarte; Felipe Schwartzman
    Abstract: We study how international linkages and nominal price rigidities jointly shape the dynamics of inflation and output across multiple large economies. We describe how these features produce a global system of Phillips curves explicitly connected by multilateral trade relationships. In equilibrium, disturbances abroad propagate to domestic variables not only directly, through pairwise trade between countries, but also indirectly through third-country effects arising from the network structure of trade. The combined propagation mechanisms imply that country-specific shocks alone explain almost 90 percent of the observed average pairwise comovement in output growth between countries. These idiosyncratic shocks also explain more than 1/2 the cross-country comovement in inflation, and between output and inflation. We estimate that a European inflationary shock results in significant U.S. inflation accompanied by lower output, and that these responses transpire almost entirely from the network effects of trade. In addition, a tightening of U.S. monetary policy generates a percentage decline in output globally that is comparable to 1/2 the domestic response.
    Keywords: international comovement; multilateral trade; New Keynesian Phillips Curve
    JEL: E31 E32 F41 F44
    Date: 2022–11–16
  24. By: Flannery, Brian (Resources for the Future); Mares, Jan (Resources for the Future)
    Abstract: In recent reports, we’ve proposed a Framework to create and implement border tax adjustments (BTAs) in the context of an upstream US GHG tax that are compatible with US obligations under World Trade Organization (WTO) agreements. Determining BTAs—export rebates and import charges—for covered greenhouse gas (GHG)-intensive products presents significant but feasible administrative challenges, especially at startup and during early years of the program. Challenges include developing required information for the large number of GHG-intensive products exported from and imported to the United States, the availability of reliable data (especially from firms in developing countries), and the need to develop capacity in affected firms around the world and in the US government to determine BTAs for covered products.To illustrate how some of these challenges could be met, this report describes how indicative, representative estimates of export rebates and import charges can be determined based on available information, as well as estimates for what they would be for a sampling of commodity products from several industrial sectors. Section 2 summarizes the technical background to determine BTAs for covered products based on the GHG index (GGI)—a critical concept and administrative index proposed in the 2020 Framework report (see footnote 1). Section 3 discusses issues and approaches to address challenges to the start-up and phase-in of BTAs in the initial years. Section 4 provides an overview of methods to determine initial estimates for GGIs. Section 5 presents a summary and conclusions. Two related documents complement this report. The first, accompanying report (see footnote 3) describes how specific facilities and operations would determine their GHG tax and GGI values for covered products they create. The second, forthcoming report (see footnote 4) contains modules with estimates of GGI values for products in about 40 sectors based on the methods described here.Click "Download" above to read the full working paper.
    Date: 2021–10–21
  25. By: Mares, Jan (Resources for the Future); Flannery, Brian (Resources for the Future)
    Abstract: In recent work, we proposed the GHG index (GGI) as a central concept and administrative tool to determine border adjustments (BAs)—export rebates and import charges for covered products.Flannery 2021. Accounting for Emissions in Global Trade with a Greenhouse Gas Index. Washington, DC: Resources for the Future. With colleagues Jennifer Hillman and Mathew Porterfield (both at Georgetown University Law Center at the time), we initially developed the GGI in the context of a potential upstream US GHG tax. Our Framework report describes how GGIs could be used to determine border tax adjustments (BTAs) compatible with World Trade Organization (WTO) obligations. Flannery, Brian P., Jennifer A. Hillman, Jan W. Mares, and Matthew C. Porterfield, 2020. Framework Proposal for a US Upstream GHG Tax with WTO-Compliant Border Adjustments: 2020 Update. Washington, DC: Resources for the Future. Among other criteria for WTO compatibility, the GGI incorporates relevant aspects of recognized international standards to determine the GHG emissions from an industrial facility and its supply chain, and then allocates them to products it manufactures (see Section 3 of the Framework). Essentially, a product’s GGI, which is expressed as tonnes of CO2 equivalent (CO2e) per tonne of product, multiplied by the GHG tax rate (US$ per tonne of CO2) determines its BTA (US$ per tonne of product). Note that the GGI itself does not depend on the policy used to set a GHG price. Rather, it is a technical metric, based on physical quantities associated with products (i.e., the carbon content of produced fossil resources and GHG process emissions required to create covered products used and produced by manufacturers). For that reason, the GGI could be used in the context of climate policies for BAs other than a GHG tax—or, more generally, as the basis for an international metric that associates GHG emissions with GHG-intensive products for various analyses and policies.For BAs based on a range of policies (besides a tax) that are now under consideration (see footnote 1), the GGI could serve as a metric to assign GHG emissions to products as the basis to apply a price, if there were an objective way to determine the effective GHG price for covered products of these policies. Proposals include the Coons–Peters bill (the FAIR Transition and Competition Act of 2021) and other recent US legislative proposals based on a variety of price-based and regulatory policies, See, for example, the Whitehouse bill (The Clean Competition Act 2022); as well as the European Union’s (EU’s) Carbon Border Adjustment Mechanism (CBAM) based on the EU Emissions Trading System (EU ETS), which applies to facilities, not products. Both provide for BAs only for imports, not exports. The Coons–Peters bill requires procedures both to determine an effective price for US GHG emissions and to assign GHG emissions to imported products. CBAM, which calls for emissions permits for imports, requires procedures to assign emissions to covered products (not facilities). Both proposals also require procedures to determine the effective price of GHG policies in nations from which they import covered products. While designing procedures to determine effective GHG prices pose significant challenges (see discussion in the reference cited in footnote 1), here we focus on the potential application of the GGI to assign emissions as the basis to apply a price or charge to covered products.Our related Policy Guidance report Flannery, Brian P., Jennifer A. Hillman, Jan W. Mares, and Matthew C. Porterfield. 2020. Policy Guidance for US GHG Tax Legislation and Regulation: Border Tax Adjustments for Products of Energy-Intensive, Trade-Exposed and Other Industries. Washington, DC: Resources for the Future. discusses tasks for legislators and regulators In Section 3 of the policy guidance report (footnote 4), we proposed that the US Department of the Treasury should establish a new office as the lead agency to manage implementation of the Framework with assistance from the US Environmental Protection Agency and Department of Commerce. We referred to this set of agencies as the US “Regulator†that would be responsible, among other tasks, for administering BTAs under the Framework. In this introduction to the modules, we refer to US and other national officials responsible for administering BAs as “regulators†but use “Regulator†as defined above throughout the modules. to authorize and implement the Framework. Of note, these tasks include procedures to promote continuous improvement as national and international climate policies and practices inevitably evolve. In particular, they include an appeals process allowing affected parties to challenge information from exporters and importers that they suspect to be incorrect, incomplete, or fraudulent. This appeals process recognizes and relies on existing capabilities of US regulators to conduct investigations in foreign nations regarding relevant data for covered, imported products.In the 25 modules that follow, we provide procedures and information to estimate indicative values of the GGIs for representative, covered products. These modules cover 39 industrial sectors and over 100 individual products, as listed in the North American Industry Classification System (NAICS). As discussed in a related working paper, Flannery, Brian P., and Jan W. Mares. 2021. “Export Rebates and Import Charges for Border Tax Adjustments under an Upstream US GHG Tax: Estimates and Methods.†Working paper 21-32. Washington, DC: Resources for the Future. these procedures rely on information from publicly available sources, such as national average values of products and the resources required to produce them. Our work on this project is ongoing. We are preparing additional modules that cover other sectors. We note that other nations classify covered sectors and products in different ways, and that sectors with similar names in different nations may not include identical products.The modules demonstrate the feasibility of determining indicative estimates for GGI values. They also provide a basis to inform the development of official procedures for BTAs by the regulators in the United States, as well as to engage input from affected industries. We use a variety of publicly available sources of national and sectoral averages for key factors that contribute to GGIs (e.g., average GHG emissions for electricity generation, fuels for thermal energy, and GHG process emissions in key sectors). We refer to these estimates for the GGIs of products as “indicative†and “representative†because they are based on a variety of sources and, for the most part, use average factors rather than facility-specific information. Note that we do not aim to determine GGI values for all possible covered products; rather, we do so for a representative set to demonstrate the process. In many cases this involves only a single product. We used data from national agencies, international institutions, industry and academic sources, and, in a few cases, our own estimates. The GGI values are representative of national averages, rather than actual determinations of the GGI for products of specific facilities, which can differ significantly from national averages.These estimates and procedures to determine the GGI provide a starting point for regulators and manufacturers to determine initial values for export rebates and import charges of GHG-intensive products based on their GGIs. The approaches could be especially useful as a model or template for the US regulators to determine initial import charges based on average values of GGIs for products (or groups of products) exported to the United States from nations that do not currently require detailed reporting of GHG emissions from industrial facilities. In practice, under the Framework, the regulators would develop official estimates for initial import charges based on more up-to-date information using uniform procedures within a sector to allocate emissions from manufacturers to the products they create. During an initial two-year start-up period, import charges would be determined by the US regulators based on national average values of the GGIs for imports. After the start-up period, GGI values for products imported into the United States would be based on facility- and firm-wide averages (as required for US manufacturers seeking export rebates, see immediately below). The start-up period would allow time for capacity building by foreign governments and firms that export to the United States to implement available international procedures to determine GGI values (see Section 3.1 of the Framework). As well, even in the initial years, if the foreign exporter had firm-wide data demonstrating lower values for the GGIs of their products, they would be entitled to appeal for a reduced import charge.In a related working paper, Flannery, Brian P., and Jan W. Mares. 2021. “Determining the Greenhouse Gas Index for Covered Products of Specific Manufacturers.†Working paper 21-31. Washington, DC: Resources for the Future. we describe procedures that would be used to determine GGI values for covered products manufactured in specific facilities, and the use of domestic firm-wide averages as the basis to claim rebates for exports from the United States. In the United States, the information required to determine such GGI values exists and much of it is publicly reported annually. This information could be used by the US regulators to develop authorized procedures for facilities to determine and report their GGI values as the basis for firms to claim export rebates based on their entire domestic production of each covered product.
    Date: 2022–09–27
  26. By: Dussaux, Damien; Vona, Francesco; Dechezleprêtre, Antoine
    Abstract: This paper analyzes imported carbon emission at the firm level. To do so, we combine information on emissions, imports, imported emissions and energy prices for French manufacturing firms between 1997 and 2014. We document a significant increase of the carbon emissions embedded in imports of French manufacturing companies over the period 1997 to 2014 that is attributable mainly to a shift towards more carbon-intensive products and countries. We then estimate the impact of imported emissions on domestic emissions and emission intensity using a shift-share instrumental variable strategy based on third countries supply shocks. We do not find compelling evidence of an impact of carbon imports on total emissions, but emission efficiency improves significantly in companies offshoring emissions abroad. A 10% increase in carbon offshoring causes a 4% decline in emission intensity. In addition, we find that the elasticity of domestic emission intensity to imported emissions is stronger in energy-intensive sectors, on high-productivity companies and among exporters. Reassuringly, the relationship between imported emissions and emission intensity does not seem to be driven by a pollution haven motive.
    Keywords: Horizon 2020 Framework Programme; project INNOPATHS (grant number 730403
    JEL: F18 F14 Q56
    Date: 2023–07–14
  27. By: Khan, Haider
    Abstract: Abstract The debate about the Belt and Road Initiative (BRI) in the west seems to have reached an impasse in the absence of any model-based scientific analysis. In order to assess the impact of BRI using consequentialist logic, it is desirable to have model-based counterfactual results. This paper is a first step in that direction. Aggregate consequences for the Chinese economy in terms of economic growth, output and employment impacts are estimated for two BRI scenarios—a high investment and demand scenario and the current low investment and demand scenario. Some important dynamic econometric issues are discussed in an appendix. Also, a more complex economic systems model with explicit banking and financial sectors for the Chinese economy is presented for further, more sophisticated modeling work. As a first approximation, the current modeling results show that BRI will certainly not harm the Chinese economy; but the low demand scenario does not translate into great gains either. The high demand longer term scenario is much more attractive for the economic policymakers in China. However, even in that instance the economic consequences alone cannot justify the strategic importance given to BRI by the Chinese rulers. One possible conclusion is that the geopolitical motives are the main drivers of BRI with modest prospects of economic gains but real prospects of energy security and overall trade and investment security. But this is a delicate and fraught game in geoeconomics and geopolitics in the 21st century.
    Keywords: Belt and Road Initiative, China, East Asia, Social Accounting Matrix, Finance
    JEL: C3 F02 F6
    Date: 2023–01–15
  28. By: Dario Guarascio; Philipp Heimberger; Francesco Zezza
    Abstract: This paper analyzes how Italy's decades-long decline turned the country into the Eurozone's Achilles heel, the most vulnerable spot of the common currency. We use a new structuralist framework to synthesize different (competing) supply-side and demand-side explanations. We argue that structural domestic factors that were already present in the decades after World War II ('original sins') – low-cost competition and labour fragmentation, many small firms linked to low innovation, and a deep territorial divide – interacted with the policy constraints brought about by globalization and European integration to exacerbate Italy's decline vis-Ã -vis its large Eurozone peers.
    Keywords: Italy, decline, Eurozone, crisis
    JEL: F02 F15 F45 F55
    Date: 2023–03
  29. By: Cullen S. Hendrix (Peterson Institute for International Economics)
    Abstract: Concerned about critical mineral supply chains and its own strategic vulnerabilities, the European Union is advancing a buyers club to procure minerals critical to the clean energy transition, such as bauxite, cobalt, lithium, and nickel. The European Union is deeply dependent on imports of both raw and processed critical minerals and materials and thus highly exposed to global price volatility. The door appears to be open for the United States or other EU trading partners and like-minded countries to join this club. Decarbonization is not the only impetus behind the proposed Brussels buyers club. Both the European Union and United States view China's dominance of critical mineral supply chains as a national security issue, because these minerals are key inputs to modern military technology. Hendrix agrees that supply chains for critical minerals desperately need widening to meet projected global demand and tackle climate change mitigation, but he warns that a purchasers club would not be a step in the right direction. A buyers club would be prone to free riding, set up distributive conflicts within the European Union, and reduce the share of climate mitigation benefits accruing to critical mineral-producing countries, many of which are developing and middle-income economies.
    Date: 2023–05
  30. By: Aldy, Joseph E. (Resources for the Future)
    Abstract: Over the past year, governments across the world have called for more ambitious goals to combat climate change. The European Union, Japan, the United Kingdom, and many other countries have pledged net-zero emission goals by mid-century, with China aiming to do so by 2060. In April, the Biden Administration pledged to cut its emissions in half by 2030 as part of a broader set of aims that includes a carbon-free power sector by 2035 and net-zero emissions economy-wide by 2050.At the same time, a number of governments have raised concerns about how ambitious domestic mitigation policies may impose adverse competitiveness pressures on domestic energy-intensive industries that in turn result in emissions leakage. To address such risks, policymakers have turned their attention to carbon border adjustments, a surcharge on imports from countries that do not have comparable climate policies.Challenges in Implementing Ambitious US Climate GoalsUnder current law, the United States has imperfect tools to deliver on the Biden Administration’s ambitious climate change goals. US climate policy is characterized by a patchwork of energy and environmental tax expenditures, appropriated spending, and regulations at federal, state, and local levels of government. These are subject to legal uncertainty, such as emissions regulatory standards; political uncertainty, such as tax credits with sunset provisions; technological uncertainty, such as on the innovation necessary to decarbonize the economy; and environmental uncertainty, such as the eventual emissions-cutting outcomes of the complicated, overlapping policy patchwork. Crafting an economy-wide, long-term emissions-cutting program requires new legislation. In the interim, making progress in combatting climate change, driving innovation, and leveraging partners around the world necessitate the Biden Administration’s use of all existing authorities as effectively as possible until Congress acts on a credible, durable climate change policy.Applying US Trade Law to Address Competitiveness ConcernsAs a part of this effort, the Biden Administration can explore ways of applying existing trade law to ensure that competitiveness pressures do not result in the leakage of emissions and the shifting of jobs to other jurisdictions with insufficient domestic emissions mitigation policies. Below, I describe briefly the policy principles that could guide this effort to use trade law to mitigate competitiveness risks, before elaborating on how US countervailing duty law could effectively satisfy these principles.
    Date: 2021–10–05
  31. By: International Food Policy Research Institute (IFPRI)
    Abstract: In 2022, the world faced multiple crises. Disruptions to food systems from the protracted COVID-19 pandemic, major natural disasters, civil unrest and political instability, and the growing impacts of climate change continued, as the Russia-Ukraine war and inflation exacerbated a global food and fertilizer crisis. The growing number of crises, their increasing impact, and rising numbers of hungry and displaced people have galvanized calls to rethink responses to food crises, creating a real opportunity for change.
    Keywords: agriculture; development; food security; hunger; policy; resilience; crises
    Date: 2023
  32. By: Junya Ino; Fabrice Murtin; Michal Shinwell
    Abstract: This paper explores the conceptual framing and measurement of transboundary impacts in the context of the 2030 Agenda. It starts by defining transboundary impacts and reviewing different measurement approaches used so far. It then proposes a typology of transboundary impacts, classified depending on the type of international flows involved: financial flows, trade flows, movements of people, environmental flows and knowledge transfers. For each of these flows, transboundary impacts can be either positive or negative, depending on the aspect considered and on the conditions in origin and destination countries. Based on this framework, the paper presents evidence from a qualitative survey of experts about the potential impact of these five flows on each of the 17 Goals and 169 targets of the 2030 Agenda. Transboundary impacts are deemed by experts to be quite pervasive across SDGs, but also limited in scope to a small number of well-identified targets. Finally, the framework is operationalised for some specific areas within each of the five types of flows mentioned above, with the help of some proxy indicators. At the global level, the five types of transboundary relationships are dominated by three macro-regions, namely China, the United States-Canada and Europe, mainly reflecting the large size of these regions in most cases. When the assessment is conducted in relative terms (i.e. when impacts are normalised by population size or GDP), the picture becomes more nuanced, as 7 out of the 11 world regions considered record at least two large transboundary impacts. While this operationalisation is only meant to show how the proposed framework could be applied to concrete cases, the paper recommends its applications to other areas within each of the five flows, based on a richer set of indicators.
    Keywords: Sustainable Development Goals, Transboundary Impacts
    JEL: Q01 Q56 F00
    Date: 2021–11–16
  33. By: Sallai, Dorottya; Schnyder, Gerhard; Kinderman, Daniel; Nölke, Andreas
    Abstract: Right-wing populist parties who obtain governmental power rely on ethno-nationalist mobilization for domestic legitimacy. They may therefore adopt policies that explicitly seek to disadvantage foreign multinational corporations (MNCs). Understanding what factors increase a foreign MNC’s exposure to adverse action by right-wing populists is an understudied question in the field of international business policy. We investigate this question in post-socialist member states of the European Union, which constitute extreme cases of right-wing populist government power. As such, they constitute a fertile ground to further our theoretical understanding of the distinction between calculable political risk and incalculable political uncertainty. Through a case study-based theory-building approach, which draws on existing literature and interview data, we derive a series of propositions and develop a research agenda. We identify factors at the country-, sector-, and firm-level that influence exposure to adverse policy action by host-country governments. We explore when political risk may turn into political uncertainty and provide suggestions to foreign MNCs operating in right-wing populist contexts on how to reduce this uncertainty. Our study provides insights for policy makers too, who should be aware of the impact political shifts towards right-wing populist governments have on political uncertainty for foreign companies.
    Keywords: business–government relations; MNE–host-country relations; multinational corporations (MNCs) and enterprises (MNEs); political risk; populism; 462-19-080
    JEL: J50
    Date: 2023–04–05
  34. By: Darlington Agbonifi (Department of Economics (University of Verona))
    Abstract: This paper estimates the socio-economic impact of infrastructure recovery investments and resilience plan related to the Institutional Development Contract (CIS) for the city of Taranto on different categories of households, labor markets (skilled and unskilled), and private enterprises in Italy. It does so by implementing a multi-regional input-output (MRIO) model with inter-regional trade at the level of Apulia region, to estimate the intra-regional impact, and, at the national level, to estimate the inter-regional and inter-sectoral supply chain linkages and spillover effects through trade. The intra-regional effects are almost two times the inter-regional effects. Almost 51% of the inter-regional impact on value-added accrues to northern regions, 22% at the centre, while about 27% is captured by the regions in southern Italy. This evidence clearly shows a good degree of connection of the Apulia local economy with the macro region of northern Italy, while it is quite weak with the macro south in Italy. The considerable share of inter-regional spillover effects in terms of value-added, which is transferred outside the southern macro-region, over 73% reflects the persisting regional disparities in Italy, where the productive northern-regions mostly benefit from the national development policies made in the most marginal areas in southern Italy.
    Keywords: multiregional input-output (MRIO) model, local-NGEU investment projects, interregional trade flows, regional disparities, Taranto, Apulia, Italy
    JEL: C67 D57 F14 Q58 R13
    Date: 2023–04
  35. By: NISHITATENO Shuhei
    Abstract: Given the growing pressure on donors to curtail foreign aid budgets, analyzing the effectiveness of bilateral official development assistance (ODA) in realizing national interests has become more significant than ever before. From the viewpoint of economic interests, prior research has revealed that ODA can help expand donor exports and outward foreign direct investments. This study provides evidence that ODA can also help firms from donor countries win infrastructure project contracts in recipient countries. Employing unique contract data on Japanese overseas infrastructure projects, I estimate a fixed effects Poisson model with a panel dataset for 158 recipients for the period between 1970 and 2020. The results suggest that 17% of the total number of overseas infrastructure projects contracted to Japanese firms during 1970–2020 were attributable to Japanese ODA disbursement. I also explore the potential mechanism, finding that the Japanese ODA-infrastructure link is strengthened when Japanese loans and grants are simultaneously provided to a recipient country. This finding is consistent with the view that pre-investment studies conducted as part of technical cooperation could generate goodwill effects for Japanese firms during their bidding for Japanese yen loan projects.
    Date: 2023–04
  36. By: Wainstock, Daniel Crisóstomo (Brown University); Galor, Oded (Brown University); Klemp, Marc (University of Copenhagen)
    Abstract: Evidence suggests that the Out of Africa Migration has impacted the degree of intra-population genetic and phenotypic diversity across the globe. This paper provides the first evidence that this migration has shaped cultural diversity. Leveraging a folklore catalogue of 958 oral traditions across the world, we show that ethnic groups further away from East Africa along the migratory routes have lower folkloric diversity. This pattern is consistent with the compression of genetic, phenotypic, and phonemic traits along the Out of Africa migration routes, setting conditions for the emergence and proliferation of differential cultural diversity and economic development across the world.
    Keywords: diversity, culture, Out of Africa migration, folklore
    JEL: O10 Z10
    Date: 2023–04
  37. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: This study assesses the importance of military expenditure in moderating the role of insecurity dynamics on tourist arrivals or international tourism in 163 countries. It is framed to assess how the future of international tourism can be improved when military expenditure is used as a tool to mitigate perceived and real security risks that potentially reduce international tourists’ arrivals. The empirical evidence is based on Negative binomial regressions. The following main findings are established. Military expenditure significantly moderates violent crimes and perception of criminality to induce a favorable net impact on international tourist arrivals. The corresponding net effect is insignificant and negative for insecurity dynamics of “access to weapons†and “political instability†, respectively. An extended analysis is performed to assess thresholds at which political instability can be modulated for the desired net effect. This threshold is the critical mass at which the unconditional negative impact from political instability is neutralized with military expenditure. Policy implications are discussed.
    Keywords: Military Expenditure; Peace; Insecurity; Tourism
    JEL: D74 H56 Z32 Z38
    Date: 2023–01
  38. By: Leonor Dormido (Banco de España); Isabel Garrido (Banco de España); Pilar L´Hotellerie-Fallois (Banco de España); Javier Santillán (Banco de España)
    Abstract: In recent years, the fight against climate change and for sustainable growth has been gaining prominence on the international agenda. Reducing pollutant emissions depends on a sufficiently large number of countries adopting efficient mitigating measures that are in line with international agreements. International cooperation is essential to deliver on the commitments undertaken pursuant to these agreements, implement the energy transition and stop climate change. Both the G-20, some of whose members are among the largest greenhouse gas emitters, and the International Monetary Fund are increasingly taking into account climate issues when performing their functions. The European Union plays an active and leading role in this global commitment and is pursuing increasingly ambitious goals. In compliance with the European Green Deal, the European Union has enshrined its goal of climate neutrality in the European Climate Law and has launched a number of groundbreaking policies to implement it, such as the “Fit for 55” package. The war in Ukraine adds an element of uncertainty to this path, given the importance of Russia as a supplier of fossil fuels to the European Union.
    Keywords: climate change, decarbonisation, European Union, G-20, IMF, COP, Green Deal, Ukraine/Russia.
    JEL: F53 P18 H23 H87 Q54 F64 F68
    Date: 2023–01
  39. By: Flannery, Brian (Resources for the Future); Mares, Jan (Resources for the Future)
    Abstract: In the context of a US upstream GHG tax, our 2020 Framework and related Policy Guidance reports propose a Framework to create and implement border tax adjustments (BTAs)—export rebates and import charges for covered greenhouse gas (GHG) intensive products—consistent with US obligations under the World Trading Organization (WTO). They provide background and details on internationally recognized methodologies to determine GHG emissions from facilities and how they can be used to create WTO-compatible BTAs for GHG-intensive products eligible for and subject to BTAs.The GHG index (GGI) is a central concept and administrative index proposed in the Framework that is used to determine BTAs for covered products. Given the GGI (with units of carbon dioxide-equivalent [CO2e] per tonne of product) of a covered domestic product, the rate for its export rebate (US$ per tonne of product) is given by the GGI multiplied by the GHG tax rate (US$ per tonne CO2). Similarly, for a covered imported product, the import charge is the US GHG tax rate multiplied by its GGI. GGI values for like products produced by different manufacturers in different ways (e.g., using different natural resources, technologies, processes, sources of thermal energy, and electricity) can have significantly varied GGI values. While like products will be taxed at the same US GHG rate, the amount of the import charge or export rebate will differ depending on the product’s GGI. Section 3.6 of the Framework report details how GGI is determined in a manner analogous to value-added taxes (VATs), but here we apply it to propagation of the upstream sources of taxed emissions.Click "Download" above to read the full working paper.
    Date: 2021–10–21
  40. By: Matteo Bruno; Dario Mazzilli; Aurelio Patelli; Tiziano Squartini; Fabio Saracco
    Abstract: We revise the procedure proposed by Balassa to infer comparative advantage, which is a standard tool, in Economics, to analyze specialization (of countries, regions, etc.). Balassa's approach compares the export of a product for each country with what would be expected from a benchmark based on the total volumes of countries and products flows. Based on results in the literature, we show that the implementation of Balassa's idea generates a bias: the prescription of the maximum likelihood used to calculate the parameters of the benchmark model conflicts with the model's definition. Moreover, Balassa's approach does not implement any statistical validation. Hence, we propose an alternative procedure to overcome such a limitation, based upon the framework of entropy maximisation and implementing a proper test of hypothesis: the `key products' of a country are, now, the ones whose production is significantly larger than expected, under a null-model constraining the same amount of information employed by Balassa's approach. What we found is that countries diversification is always observed, regardless of the strictness of the validation procedure. Besides, the ranking of countries' fitness is only partially affected by the details of the validation scheme employed for the analysis while large differences are found to affect the rankings of products Complexities. The routine for implementing the entropy-based filtering procedures employed here is freely available through the official Python Package Index PyPI.
    Date: 2023–04
  41. By: Philip J. O’Connell (University College Dublin)
    Abstract: This working paper is the Irish report to the OECD Expert Group on Migration. As such, the focus of the report is largely shaped by the reporting requirements for the preparation of the annual OECD International Migration Outlook. The purpose of the paper is to outline major developments and trends in migration and integration data and policy. The principal reference year is 2021, although information relating to early-2022 is included where available and relevant. The Executive Summary provides an overview of the main findings of the report. Section 2 discusses the main developments in migration and integration policy in Ireland in 2021. Section 3 discusses the statistics on inward and outward migration movements. Section 4 examines trends in the population. Migration and the labour market are discussed in Section 5.
    Keywords: Migration, labour market, Legislation and Policy
    Date: 2023–04–24
  42. By: Langthaler, Margarita; Malik, Julia
    Abstract: Attention to the issue of inequalities in education has risen considerably after the COVID-19 pandemic. Research points to school dropout rates and learning losses that have risen disproportionately among weak socio-economic groups. While patterns are similar in most countries, the rise in educational inequalities and its socio-economic consequences are markedly wider in the Global South than in the Global North. Educational disparities in a North-South-dimension, however, predate the pandemic. Their roots go back to the colonial past and they are still firmly embedded in the global asymmetric division of labour, power and wealth. This Briefing Paper assesses the current international debate on inequality in education focussing on a North-South perspective. We will first briefly reflect on terminology before discussing theoretical approaches. Then, we will provide an overview of the current status quo of global disparities in education. Finally, we will analyse the international policy discussion.
    Keywords: education, inequalities, global disparities
    Date: 2023
  43. By: Sekou Keita (IAB - Institute for Employment Research); Thomas Renault (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); Jérôme Valette (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)
    Abstract: This paper analyses whether the systematic disclosure of criminals' origins in the press affects natives' attitudes towards immigration. It takes advantage of the unilateral change in reporting policy announced by the German newspaper Sächsische Zeitung in July, 2016. Combining individual-level panel data from the German Socio-Economic Panel from 2014 to 2018 with 402, 819 crime-related articles in German newspapers and those newspapers' market shares, we find that systematically mentioning the origins of criminals increases the relative salience of natives' criminality and reduces natives' concerns about immigration, breaking the implicit link between immigration and crime.
    Keywords: Immigration, Crime, Media Bias
    Date: 2022–10

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