nep-int New Economics Papers
on International Trade
Issue of 2023‒08‒14
33 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. German Firms in International Trade: Evidence from Recent Microdata By Matthias Fauth; Benjamin Jung; Wilhelm Kohler
  2. Japan’s New Trade Strategy Focuses on Supply Chain Resilience and Trade Liberalization By Kim , Gyu-Pan
  3. 미·중 전략 경쟁 시대 글로벌 기업의 대응과 중국진출 한국기업에 대한 시사점(Response to U.S.-China Competition by Multinational Companies and Implications for Korean Companies in China) By Hyun, Sang Baek; Moon, Jiyoung; Park, Minsuk; Oh, Jonghyuk; Oh, Yun Mi
  4. Reduced time at customs through implementing the Trade Facilitation Agreement (TFA) would be a significant boost to intra-African trade for AfCFTA countries WP328 By Jaime de Melo; Zakaria Sorgho; Laurent Wagner
  5. Modelling the effects of Brexit on the British economy By Minford, Patrick; Zhu, Zheyi
  6. Production, Trade, and Cross-Border Data Flows By Qing Chang; Lin William Cong; Liyong Wang; Longtian Zhang
  7. Russia’s participation in the WTO’s trade disputes in 2022 By Baeva Marina; Knobel Alexander
  8. The Impacts of Bilateral Value Chains between Japan and Korea on Value-added Creation of Manufacturing Firms By HUR Jung; KWON Hyeog Ug; SONG Hangeul
  9. Servicification of Japanese Manufacturing Firms and Its Impact on Corporate Performance in the Export Market By MATSUURA Toshiyuki
  10. Cheaper and Faster: The Role of Air Services Agreements on Transportation By Charlotte Emlinger; Amélie Guillin
  11. Migration, Search and Skill Heterogeneity By Myrto Oikonomou
  12. Functional specialisation and working conditions in Europe By Stöllinger, Roman; Leitner, Sandra M.; Zavarska, Zuzana
  13. Determinants of functional specialisation in EU countries By Kordalska, Aleksandra; Olczyk, Magdalena
  14. Exchange Rate Pass-Around By Matthieu Crozet; Julian Hinz; Federico Trionfetti
  15. Global Taxation and National Welfare States By Priyaranjan Jha; Rahul Mukherjee
  16. Trade and Investment Cooperation between South Korea and the Visegrad Group By Mazur, Grzegorz
  17. Emigrant Voyages from the UK to North America and Australasia, 1853-1913 By Hatton, Timothy J.
  18. Russian foreign trade in 2022 By Volovik Nadezhda
  19. 팬데믹과 전쟁 이후 국제경제질서 변화와 대응(Changes in the international economic order in the post-pandemic and war era and challenges for Korea) By Kim, Kyungsoo; Kim, Hongkee; Song, Chi-Young
  20. The Dollar in an Era of International Retrenchment By Ryan Chahrour; Rosen Valchev
  21. Environmental Migration and Labor Market By JANG, Youngook
  22. Влияние мировых и внешнеторговых цен на продовольственные товары на внутреннюю инфляцию Казахстана. // The impact of world and foreign trade prices for food products on domestic inflation in Kazakhstan. By Кожамкулов Канат // Kozhamkulov Kanat; Дәулетханұлы Елдос // Dauletkhanuly Yeldos; Агамбаева Саида // Agambayeva Saida
  23. European Trade & Growth Imbalances: An Analysis using a Sign-Restriction Bayesian-GVAR with Stochastic Volatility By Peter McAdam; Kostas Mouratidis; Theodore Panagiotidis; Georgios Papapanagiotou
  24. Nowcasting World Trade with Machine Learning: a Three-Step Approach By Menzie D. Chinn; Baptiste Meunier; Sebastian Stumpner
  25. How Brexit damaged the United Kingdom and the City of London By Ryan, John
  26. Immigration and support for anti-immigrant parties in Europe By Jäger, Julian
  27. Law-Abiding Immigrants: The Incarceration Gap Between Immigrants and the US-born, 1850–2020 By Ran Abramitzky; Leah Platt Boustan; Elisa Jácome; Santiago Pérez; Juan David Torres
  28. Globalisation of sports By Dilger, Alexander
  29. Trilemma revisited with dollar dominance in trade and finance By Vanessa Olakemi Dovonou
  30. The Euro Area’s Achilles Heel: Reassessing Italy’s Long Decline in the Context of European Integration and Globalisation By Dario Guarascio; Philipp Heimberger; Francesco Zezza
  31. 국제사회의 산업부문 탄소중립 추진 동향과 대응방향: 중소기업을 중심으로(Global Efforts to Achieve Carbon Neutrality in the Industrial Sector and Implications: Focusing on SMEs) By Kim, Eunmi; Lee, Sunghee
  32. Drivers of cross-border bank claims: The role of foreign-owned banks in emerging countries By Sophie Brana; Dalila Chenaf-Nicet; Delphine Lahet
  33. Institutions and Global Crop Yields By David Wuepper; Haoyu Wang; Wolfram Schlenker; Meha Jain; Robert Finger

  1. By: Matthias Fauth; Benjamin Jung; Wilhelm Kohler
    Abstract: In this paper, we zoom in on the firm level of German merchandise foreign trade, using a novel data base with information on the export and import value by firm, country, product and year for the period 2011-2019. Problems arising from the consolidated reporting of taxable entities and the reporting thresholds present in intra-EU trade have been largely eliminated through redistributions conducted by DESTATIS. Using the data, we examine how global German firms are by looking at the joint distribution of the number of products they trade and the number of countries they trade with. Moreover, we examine the importance of firms mainly engaged in trade intermediation, as opposed to production. Most importantly, we provide a rich description of heterogeneity among German firms by decomposing their trade relationships into intensive margins (value of trade) and extensive margins (number of firms, products and countries). We describe the distributions for each margin, distinguishing intra-EU and extra-EU trade as well as different firm types (producers, wholesalers, retailers). Finally, we reveal strong positive correlations between and within importing and exporting margins, supporting the presence of firm-level complementarities implied by recent theory.
    Keywords: trade statistics, firm-level data, trade intermediation, Germany
    JEL: F14 F23
    Date: 2023
    Abstract: Since the inauguration of the U.S Trump administration in January 2017, Japan's trade strategies have been shifting from trade liberalization to protectionism, emphasizing the strengthening of supply chains. The Kishida cabinet, which was launched in October 2021, is strengthening economic cooperation with the United States through bilateral dialogue as well as multilateral cooperation frameworks such as IPEF. It also enacted the Economic Security Promotion Act in May 2022, and strengthened industrial policies for strategic industries such as the semiconductors. However, the Japanese government's new trade strategy is not limited to supply chain strengthening measures and industrial policies. It is aiming to take the lead in digital trade, which is a new trade issue, and bolster its leadership in CPTPP. This brief is structured as follows. In the following section we will examine Japan’s new trade strategy in terms of supply chain resilience, focusing on industrial policies represented by reshoring policy and national semiconductor strategy, and supply chain policies of critical materials outlined in the Economic Security Promotion Act enacted in May 2022. And we look at bilateral coopera-tion between the U.S and Japan, and key negotiation agenda on supply chains at the Indo-Pacific Economic Framework (IPEF). The third section reviews the Japan’s trade liberalization strategy focused on the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership), and Digital Trade Agreements. In particular, we derived the direction of Japan’s free trade policy through an analysis of the characteristics of the CPTPP as a 21st-century trade norm, and a comparative analysis of major regulations related to e-commerce in the CPTPP, US-Japan Digital Trade Agreement, and RCEP.
    Keywords: Japans new trade strategy; Supply Chain Resilience Policy in Japan
    Date: 2023–07–04
    Abstract: 본 보고서는 미·중 전략 경쟁 시대 글로벌 기업의 대응전략을 살펴보고, 중국진출 한국기업에 주는 시사점을 도출하였다. 미·중 분쟁과 공급망 재편에 대응하기 위한 글로벌 기업의 대중국 전략 변화, 경영실태 및 유형별 사례를 분석하였다. 이러한 글로벌 기업의 대응과 중국진출 한국 제조업체의 실태조사 결과를 종합하여 시사점을 도출하였다. This report examines how multinational companies in China are responding to the intensifying strategic competition between the U.S. and China, and draws implications for Korean companies in China. With the integration of resources and markets around the world sparked by the trend of globalization, multinational companies have continued to grow at a rapid pace. In particular, global manufacturers have maintained their competitiveness by distributing resources more efficiently while establishing a global value chain with China as their main production hub. However, measures taken by the U.S. to block China’s access to technology and supply chains in some high-tech industries have prompted discussions on reorganization of the global supply chain, placing these multinational companies in an uncertain situation concerning their operations in China. At a time when competition between the U.S. and China is intensifying, it is necessary to look at the response strategies of global companies that have entered China and seek effective countermeasures for Korean companies. Chapter 2 examines the changes in the Chinese government’s foreign capital attraction policy and the current status of foreign direct investment (FDI) in China. Under its “dual circulation” strategy, China is responding to U.S. control measures and expanding foreign capital attraction in the service and high-tech manufacturing sectors necessary for China’s industrial advancement. In particular, the U.S.-China competition has led the Chinese government to expand its efforts to attract foreign capital through more preferential policies in high-tech manufacturing sectors, where the U.S. has concentrated its blocking measures. On the other hand, due to stricter labor and environmental regulations, and China’s establishment of an independent supply chain, the business environment of multinational companies in China is deteriorating as systems and laws related to economic security are undergoing transformation. he trend of foreign investment seen through Chinese FDI statistics indicates that, despite the U.S. ramping up efforts to contain China, the inflow of foreign investment is steadily increasing, especially in the service and high-tech manufacturing sectors that the Chinese government hopes to foster. (the rest omitted)
    Keywords: Economic cooperation; corporate management; era of strategic competition between the US and China; global companies; Korean companies entering China
    Date: 2022–12–30
  4. By: Jaime de Melo (UNIGE - Université de Genève = University of Geneva, FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Zakaria Sorgho (ULaval - Université Laval [Québec], FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Laurent Wagner (FERDI - Fondation pour les Etudes et Recherches sur le Développement International)
    Abstract: All WTO members participate in the Trade Facilitation Agreement (TFA), a rulesbased bottom-up approach built on monitorable provisions (e.g. the publication of information, advance rulings, appeal or review of decisions, transparency, and border agency cooperation) aimed at reducing time in customs. The paper draws on the OECD indicators of the state of implementation of provisions in the TFA summarized in a TFI (Trade Facilitation Index). to estimate the reduction in waiting-time at customs for a large sample of 160 countries.
    Keywords: International trade, trade policy, Trade Facilitation, LDCs, LLDCs, AFCFTA
    Date: 2023–06–18
  5. By: Minford, Patrick (Cardiff Business School); Zhu, Zheyi (Cardiff Business School)
    Abstract: We estimate the short run effects of Brexit border disruption on the UK economy. We estimate a structural VAR for the UK where Brexit effects are identified by the dates of Brexit events, the referendum and the exit from the single market. We find evidence of short run effects of Brexit: temporary effects on GDP, exports and imports (slightly negative), and on inflation and interest rates (slightly positive). These effects are consistent with modest disruption from introducing a border with the EU- a border due to be made barrier-free and seamless by the UK-EU Trade and Cooperation Agreement. Previous work using other countries as comparators is vulnerable to identification difficulties. We also survey earlier modelling work on the long run effects of evolving policies of free trade, UK-sourced regulation and liberalised immigration. Models of long run trade suggest the emergence of substantial gains.
    Date: 2023–07
  6. By: Qing Chang; Lin William Cong; Liyong Wang; Longtian Zhang
    Abstract: We build a two-country general equilibrium model to analyze the effects of cross-border data flows and pre-existing development gaps in data economies on each country's production and international trade. Raw data as byproducts of consumption can be transformed into various types of working data (information) to be used by both domestic and foreign producers. Because data constitute a new production factor for intermediate goods, a large extant divide in data utilization can reduce or even freeze trade. Cross-border data flows mitigate the situation and improve welfare when added to international trade. Data-inefficient countries where data are less important in production enjoy a "latecomer's advantage'' with international trade and data flows, contributing more raw data from which the data-efficient countries generate knowledge for production. Furthermore, cross-border data flows can reverse the cyclicity of working data usage after productivity shocks, whereas shocks to data privacy or import costs have opposite effects on domestic and foreign data sectors. The insights inform future research and policy discussions concerning data divide, data flows, and their implications for trade liberalization, the data labor market, among others.
    JEL: F15 F29 F43
    Date: 2023–06
  7. By: Baeva Marina (Gaidar Institute for Economic Policy); Knobel Alexander (Gaidar Institute for Economic Policy)
    Abstract: For several years now, the WTO system, in particular the mechanism for resolving trade disputes, is facing a crisis. The main reasons are as follows: growth of protectionism, trade wars, the COVID-19 pandemic, systemic problems, primarily, freezing of the Appellate Body (AB). According to the U.S., the AB exceeds authority, sometimes making decisions outside of the WTO law, which creates rights or obligations for member states that are not provided for in the existing WTO agreements, violating time limits for consideration of appeals. Many WTO member states agree on the need for reforms.
    Keywords: Russian economy, foreign trade, WTO, trade disputes
    JEL: F10 F13 F19
    Date: 2023
  8. By: HUR Jung; KWON Hyeog Ug; SONG Hangeul
    Abstract: This study investigates the bilateral value chain participation between Japan and Korea and the impacts on their firms’ value-added creation. We found a firm-level evidence that there exist mutual gains of Japanese and Korean firms when both firms belong to an industry that highly participates in a backward bilateral value chain of Korean with Japan, or equivalently say, a forward bilateral value chain of Japan with Korea. This evidence qualitatively remains the same in main manufacturing industries except for automobile and trailer industry. Our result may imply that a trade dispute between Japan and Korea hurts firms in both countries and a mutually beneficial trade relationship should be restored.
    Date: 2023–07
  9. By: MATSUURA Toshiyuki
    Abstract: This study revisit the impact of the servicification of Japanese manufacturing firms in terms of firm-level performance in export markets, using Japanese firm-level panel data set from 2009 to 2019. We constructed two measures of firm-level servificiation: in-house service production and bought-in service input, which is service input procured from external providers. We then examine its impact on corporate performance in export markets, measured by the Global Value Chain participation dummy, namely, the two-way trader dummy and the export intensity. Unlike previous studies, we examine various measures of service outsourcing and estimate the Correlated Random effects model, which enables us to control for unobserved individual fixed effects. We find that bought-in service input, especially service outsourcing, significantly impacts GVC participation and export intensity, and that this effect is more pronounced for high-tech industries.
    Date: 2023–06
  10. By: Charlotte Emlinger; Amélie Guillin
    Abstract: We assess the impact of bilateral air services agreements (ASAs) on air transportation using an unique dataset providing direct observations of bilateral air transport cost and time for a standardized good, for 1, 190 country-pairs, between 2011 and 2015. Our results show that ASAs reduce transportation cost by 8% while they only impact transportation time for landlocked countries and RTA members. Our estimates also reveal that bilateral trade decreases cost of transport, which highlights the role of backhauling in air transportation.
    Keywords: Transport Cost;Transport Time;Air Services Agreements;Trade
    JEL: F14 F13 L91
  11. By: Myrto Oikonomou
    Abstract: Cross-border migration can act as an important adjustment mechanism to country-specific shocks. Yet, depending on who moves, it can have unintended consequences for business cycle stability. This paper argues that the skill composition of migration plays a critical role. When migration flows become more concentrated in skilled labor an important trade-off arises. On the one hand, migration releases unemployment pressures for the origin countries. On the other hand, it generates negative compositional effects (the so-called “brain drain” effects) and skill imbalances, which reduce supply capacity in origin countries. This paper analyses quantitatively the impact of cyclical migration in an open-economy Dynamic Stochastic General Equilibrium (DSGE) model with endogenous migration flows, trade linkages, search and matching frictions, and skill heterogeneity. I apply this framework to the case of the Greek emigration wave following the European Debt Crisis. What I find is that emigration flows implied strong negative effects for capital formation, leading to more than a 15 percentage point drop in investment. Rather than stabilizing the Greek business cycle, labor mobility led to a deeper and more protracted recession.
    Keywords: Migration; Matching Frictions; Skill Heterogeneity
    Date: 2023–06–30
  12. By: Stöllinger, Roman; Leitner, Sandra M.; Zavarska, Zuzana
    Abstract: Specialisation in value-chain functions is one of the new phenomena introduced by global value chains and holds great potential for productivity gains. The advantages of global value chain integration, however, could be potentially countered by unfavourable functional specialisation. This study shows that functional specialisation in production activities ('fabrication') tends to hold back wages. For Central and East European EU member states, a specialisation as 'factory economies' could thus become a development trap.
    Keywords: GVC, FDI, social economy, global value chain
    Date: 2023
  13. By: Kordalska, Aleksandra; Olczyk, Magdalena
    Abstract: Functional specialisation in global value chains is a complex phenomenon. This paper examines the determinants of functional specialisation patterns in EU countries, focusing on the business functions fabrication and research and development. The core result of the study is that lower wages favour functional specialisation in fabrication activities, while higher wages promote specialisation in research and development activities. The result is robust with respect to using different methodologies for measuring functional specialisation.
    Keywords: global values chains trade, R&D, GVC, research and development
    Date: 2023
  14. By: Matthieu Crozet (RITM - Réseaux Innovation Territoires et Mondialisation - Université Paris-Saclay); Julian Hinz; Federico Trionfetti
    Abstract: In January 2015, The Swiss Franc (CHF) appreciated unexpectedly against the Euro by approximately 15%. We document a new fact: French firms that exported to both the Swiss market and the Eurozone also exhibited a sudden change in their export prices to the Eurozone. We coin this the "exchange rate pass-around" effect. We rationalise this fact with a simple model based on the endogenous decision of some firms to give up pricing-to-market and opt for single-pricing to all markets. An important implication of this finding is that single-pricing may be one of the causes of the incomplete pass-through. This mechanism has so far remained unexplored in the literature, which may have led to overestimating the importance of other factors. Based on monthly French export data, our empirical analysis confirms the existence of the pass-around. Firms directly affected by the CHF exchange rate shock increased their prices in neighboring markets by 0.8% compared to other exporters. The effect was stronger for firms with lower ex-ante price heterogeneity across markets and for firms with smaller trade costs to Switzerland. However, the effect was short-lived. As time passed, exporters tended to decouple the prices they set on the Swiss market from those for the Eurozone, and the pass-around effect faded.
    Keywords: Exchange rate pass-through, International trade, Pricing-to-market
    Date: 2023–04
  15. By: Priyaranjan Jha; Rahul Mukherjee
    Abstract: This paper studies the effects of globalization on the ability of governments to generate tax revenues for the financing of national welfare states. In this context, it summarizes the theoretical predictions of various economic models of tax competition between countries and discusses the role of factor mobility and country-specific characteristics such as size and factor abundance. It then draws on existing empirical evidence to outline the effects of globalization on capital, labor and consumption taxes. It touches on recent trends in income tax incentives for highly skilled workers, the challenges related to digital platforms, and ends with a discussion of recent attempts at international tax coordination among countries, including the OECD BEPS initiative.
    Keywords: globalization, welfare state, tax competition, corporate taxation, income taxation, global tax coordination
    JEL: F21 F22 F23 F62 F68 H11 H21 H25 H71 J61
    Date: 2023
  16. By: Mazur, Grzegorz (Poznań University of Economics and Business)
    Abstract: The Visegrad group (V4) is a political alliance of four countries of Central Europe – the Czech Republic, Hungary, Poland and Slovakia, reaching its roots to the beginning of the 1990s, when the countries started reforming their political and economic systems from centrally planned to democratic free market economies. The coalition - consisting of countries with similar historical experience, transformation challenges and level of socio-economic development - aimed at regional co-operation and mutual support on their strategic goal of full membership in the European Union (EU). The V4 countries are currently full members of the EU (since 2004) with dynamic and competitive economies. The four countries form a market of over 60 million consumers with a share of ca. 7.7% of the EU’s GDP (Table 1). Over last three decades V4 countries have experienced high economic growth, closing a development gap with highly developed countries of the EU. Their economies have opened up to the global trading system, changing directions (mostly towards other EU countries) and expanding volumes of their international trade. Liberalizing economies have become attractive destinations for FDIs due to their central location at the continent, well-educated society as well as restructuration and privatization of many economic sectors (Mazur, 2009). Joining the European Union in 2004, V4 countries became part of the European Single Market leading to various consequences for economic policy and business conditions. While membership in the EU brought new economic opportunities and enhanced the countries’ business attractiveness, it has also had relevant consequences for their trade co-operation with third countries. The V4 states adopted all rights and commitments from the EU’s Common Trade Policy and have since been developing their trade and economic co-operation with third countries, including the Republic of Korea, commonly with other EU partners and exclusively at the EU level.
    Keywords: Trade and Investment Cooperation; South Korea and the Visegrad Group
    Date: 2023–07–06
  17. By: Hatton, Timothy J. (University of Essex)
    Abstract: Studies of the determinants of emigration from Europe from 1850 to 1913 include the gains to migrants but often neglect the costs. One component of those costs is earnings forgone on the voyage. In this paper I present new data on the voyage times for emigrants from the UK traveling to the United States and to Australia. Between 1853-7 and 1909-13 the voyage time from Liverpool to New York fell from 38 days to just 8 days (or 79%). Over the same years, the emigrant voyage to Sydney fell by more in absolute terms, from 105 days to 46, but by less in relative terms (56%). Differences in profiles of travel times are explained with a focus on the relative efficiency of sail and steam and (for Australia) the use of the Suez Canal. Data series for fare prices and foregone wage costs are combined to create new series on the 'total' cost of emigrant voyages. Econometric analysis of UK emigration to the US, Canada and Australia supports the view that time costs mattered.
    Keywords: international migration, steam ships, voyage times
    JEL: F22 O33 N73
    Date: 2023–07
  18. By: Volovik Nadezhda (Gaidar Institute for Economic Policy)
    Abstract: In late 2021 and early 2022, the global recovery from the pandemic was expected to continue in 2022 and 2023, supported by continued progress in vaccination, favorable macroeconomic policies in major economies, and financial conditions. In December 2021, the OECD projected global GDP growth of 4.5% in 2022 and 3.2% in 2023.3 National accounts data in early 2022 were broadly in line with this forecast, with business activity recovering quickly in most countries following a decline in the number of people infected with the Omicron strain. However, higher food and energy prices, supply constraints associated with the pandemic, and a rapid recovery in demand since mid-2020 have accelerated inflation in most OECD countries, especially in the United States, Latin America, and many Central and Eastern European countries.
    Keywords: Russian economy, foreign trade, terms of trade, regional pattern
    JEL: F10 F13 F19
    Date: 2023
  19. By: Kim, Kyungsoo (Sungkyunkwan University); Kim, Hongkee (Hannam University); Song, Chi-Young (KOOKMIN UNIVERSITY)
    Abstract: 팬데믹과 전쟁 후 세계질서변화의 양상과 변화의 동인을 규명하고 새로운 국제경제질서를 전망한다. 포스트 팬데믹/전쟁 세계는 미국이 주도하는 선진국, 중국이 주도하는 유라시아, 글로벌 사우스로 3분되는 가운데 미중간의 전략경쟁으로 포장되는 신냉전은 쉽게 종식되지 않을 것으로 기대된다. 냉전시대와 달리 국가간 상호의존성이 높고 세계질서의 전환에 따른 지정학적, 지경학적 위험이 고조되는 상황하에서 경제안보의 중요성이 강조된다. 경제안보란 한 나라의 지속가능한 번영을 위한 지정학적, 지경학적 또는 기후변화와 같은 위험요인을 식별하고 이를 제어하는 능력이다. 전략경쟁의 신냉전 시대에 경제안보를 위한 우리나라 대외경제정책 방향을 제시한다. The COVID-19 pandemic and the Russo-Ukrainian War marked the end of the post-Cold War era and the beginning of a new Cold War era. From the global economic perspective, it was an event in which cracks occurred in the integration of the world economy, which was completed with China's accession to the WTO in 2001, and de-globalization has begun. However, these changes did not happen suddenly, and many factors have contributed to this turmoil. Among them, the most fundamental cause can be attributed to the United States’ declining status as a hegemon, which continued to lead the world order since World War II. The declining status as a hegemon is not simply due to the declining trend of the US share of world GDP. Compared to the advanced countries, including the United States, the economies of emerging countries have made a rather explosive growth in the recent decades. Above all, China has achieved strong economic growth and military power to the extent that the G2 has been crowned. However, the status of the dollar as a reserve currency is still dominant. The dollar occupies an overwhelming share in world foreign exchange transactions, and as a global safe asset and settlement currency for international trade and commodity transactions, it is incomparable to any other currencies. The US Federal Reserve's monetary policy is having a huge ripple effect on the world economy by generating a global financial cycle. The declining power of the United States’ status as a hegemon should be found within the failure of domestic politics, which has caused much societal conflict and polarization such that no consensus can be reached on everything from masks to abortions. The failure of domestic politics is largely responsible for the vast societal inequality. Loss of jobs caused by China trade shock, automation (from digital technology development) and labor outsourcing (from GVC enabled) has contributed significantly to inequality. The failure of domestic politics also occurred in other center countries of the global world, such as Britain and France.(the rest omitted)
    Keywords: 포스트코로나; 국제경제; 대외경제정책; 국제금융; 경제안보(postcorona; international economy; foreign economic policy; international finance; economic security)
    Date: 2022–12–30
  20. By: Ryan Chahrour; Rosen Valchev
    Abstract: Recent trends suggest the world economy may be tending towards an equilibrium with two distinct trading blocs, each internally integrated, but with significant isolation between the blocs. This paper uses a quantitative theory to explore how far this bifurcation would need to go to pose a threat to the special role of the dollar in international exchange. The theory emphasizes the joint determination of countries' portfolio choices and trading currency. We find that unilateral protectionism on the part of the US could modestly reinforce the dollar's dominant role, but that policies directly supporting the Chinese yuan's use in trade could end the dollar's continued dominance if implemented over a long-enough period. Tit-for-tat responses between just the US and China would likely leave the dollar's role essentially unchanged. If both countries coordinate protectionist policies within their trading blocs, however, a transition away from global dollar dominance becomes far more likely.
    JEL: E44 F02 F33 F41 G15
    Date: 2023–06
    Abstract: This report highlights the significant impact of climate change on migration patterns and the need for Korea to prepare for the influx of climate migrants. While natural disasters have historically caused population displacement, the effects of climate change-induced slow-onset changes, such as rising sea levels and droughts, are increasingly evident. Environmental migration disrupts social, labor, and industrial structures in sending and receiving countries, particularly through labor migration, which affects wages, employment rates, production costs, commodity prices, and business cycles. The study by Jang et al. (2022) investigates regional patterns of environmental migration and the potential labor market implications. Although Korea is currently unaffected, it is projected to experience an increase in climate migrants in the near future, as Southeast Asian and South Asian countries facing climate and environmental challenges contribute significantly to Korea's migrant population. The report emphasizes the importance of understanding the socio-economic characteristics of potential migrants to develop appropriate policies to mitigate the negative impacts of this anticipated influx. By proactively addressing these challenges, Korea can better prepare for the future dynamics of climate-induced migration and its impact on society, labor markets, and industrial sectors.
    Keywords: migration; climate change; environmental migration; labor market
    Date: 2023–07–12
  22. By: Кожамкулов Канат // Kozhamkulov Kanat (National Bank of Kazakhstan); Дәулетханұлы Елдос // Dauletkhanuly Yeldos (National Bank of Kazakhstan); Агамбаева Саида // Agambayeva Saida (National Bank of Kazakhstan)
    Abstract: В рамках данного исследования проведен анализ факторов, влияющих на продовольственную инфляцию в Республике Казахстан со стороны внешнеторгового канала, и получена эмпирическая оценка степени влияния мировых продовольственных цен Продовольственной и сельскохозяйственной организации Объединенных Наций (далее – ФАО), экспортных цен и импортных цен Республики Казахстан на продовольственные товары. Была апробирована методология построения индексов экспортных и импортных цен. Динамика стоимости внешнеторгового потока разложена на составляющие: индексы цен и индексы физических объемов поставок. Проведен литературный обзор теоретических основ и применяемых методологических подходов, на основе которого построена модель структурной векторной авторегрессии для получения импульсных откликов продовольственной инфляции на шоки со стороны индексов импортных и экспортных цен и индексов мировых цен ФАО.
    Keywords: индексы экспортных цен, индексы импортных цен, индекс ФАО, условия торговли, мировые цены на продовольствие, обменный курс, факторный анализ, индекс потребительских цен, инфляция, XPI, MPI, FAO index, terms of trade, exchange rate, CPI, inflation, food inflation
    JEL: C43 E31 F10
    Date: 2023
  23. By: Peter McAdam (Federal Reserve Bank of Kansas City, USA); Kostas Mouratidis (University of Sheffield, UK); Theodore Panagiotidis (University of Macedonia, Greece); Georgios Papapanagiotou (University of Macedonia, Greece)
    Abstract: The persistent trade and economic imbalances between the south and north euro area countries generated severe strains for the euro following the global financial crisis. We assess alternative scenarios to restore the trade imbalances within the euro area. We use a Bayesian VECM SVAR with stochastic volatility in a Global-VAR, in which theory-consistent, long- and short-run restrictions are imposed.
    Keywords: European North-South Divide, Global VAR, Structural Impulse Response Analysis
    JEL: C33 E27 F14
    Date: 2023–07
  24. By: Menzie D. Chinn; Baptiste Meunier; Sebastian Stumpner
    Abstract: We nowcast world trade using machine learning, distinguishing between tree-based methods (random forest, gradient boosting) and their regression-based counterparts (macroeconomic random forest, gradient linear boosting). While much less used in the literature, the latter are found to outperform not only the tree-based techniques, but also more “traditional” linear and non-linear techniques (OLS, Markov-switching, quantile regression). They do so significantly and consistently across different horizons and real-time datasets. To further improve performances when forecasting with machine learning, we propose a flexible three-step approach composed of (step 1) pre-selection, (step 2) factor extraction and (step 3) machine learning regression. We find that both pre-selection and factor extraction significantly improve the accuracy of machine-learning-based predictions. This three-step approach also outperforms workhorse benchmarks, such as a PCA-OLS model, an elastic net, or a dynamic factor model. Finally, on top of high accuracy, the approach is flexible and can be extended seamlessly beyond world trade.
    JEL: C53 C57 E37
    Date: 2023–06
  25. By: Ryan, John
    Abstract: This paper examines the economic cost of Brexit for the City of London. Even though the Covid pandemic may have delayed some plans for relocations by financial firms from London to the EU, the EU’s finance hubs are growing. Paris has become the bloc’s top trading hub, while Frankfurt, Dublin and Amsterdam are also emerging as hubs for different financial services specialisms. There were three drivers behind the UK government’s stance on Brexit which have been largely detrimental to City of London interests: First, Getting Brexit Done by concluding a boilerplate agreement on goods, while neglecting financial services; second, leaving the single market and ending freedom of movement making a deal on financial services impossible, and third, the false and arrogant mantra that ‘the EU needed the City more than the City needed the EU’. Prime Ministers Johnson, Truss and Sunak have led the UK into further self-inflicted economic and political decline and regulatory uncertainty. Brexit will over the next few years have a negative impact on jobs and tax receipts. The City of London will have to adapt to the harsh realities of a hard Brexit, perennial tensions with Brussels and growing competition from European financial centres and from New York.
    Keywords: De Gruyter deal
    JEL: N0
    Date: 2023–06–20
  26. By: Jäger, Julian
    Abstract: My paper analyzes the link between immigration and support for anti-immigrant parties in Europe. I assemble a unique data set on the share of foreigners for 356 regions in 26 European countries and construct a novel scale for the anti-immigrant position of political parties. I find that Europeans are less supportive of anti-immigrant parties in regions with a higher share of foreigners, consistent with group contact theory. The negative association is driven by Europeans with proredistribution attitudes and is stronger among those with tertiary education, who live in the city, are in the labor force, of younger age, and female. I address several endogeneity concerns, e.g., using a shift-share instrumental variable approach, which provides evidence for a causal channel.
    Keywords: Europe, Immigration, Political preferences
    JEL: D72 J15 Z13
    Date: 2023
  27. By: Ran Abramitzky; Leah Platt Boustan; Elisa Jácome; Santiago Pérez; Juan David Torres
    Abstract: We combine full-count Census data (1850–1940) with Census/ACS samples (1950–2020) to provide the first nationally representative long-run series (1850–2020) of incarceration rates for immigrants and the US-born. As a group, immigrants had higher incarceration rates than US-born white men before 1870, similar rates between 1880-1950, and lower rates since 1960. Although there are substantial differences in incarceration by origin country, the relative decline in incarceration since 1960 occurred among immigrants from all sending regions. This decline cannot be explained by changes in immigrants’ observable characteristics or immigration policy, but may reflect immigrants’ resilience to economic shocks.
    JEL: K4 N31
    Date: 2023–07
  28. By: Dilger, Alexander
    Abstract: Globalisation affects not only politics and the economy, but also sport, which has become significantly more international, competitive and financially powerful. This is particularly advantageous for most consumers or spectators. Especially top athletes benefit, while not so good athletes can suffer from the greater competitive pressure. The same applies to event organisers and the mass media, from which the best and largest in particular benefit. Poorer nations can more easily enter and win international competitions, although richer nations retain advantages. All in all, globalisation of sports is not a zero-sum game, but the benefits outweigh the costs.
    Keywords: Competition, Globalisation, Media, Olympics, Sports
    JEL: F69 L83 Z20
    Date: 2023
  29. By: Vanessa Olakemi Dovonou (University of Orleans)
    Abstract: This paper explores the impact of the US dollar dominance on monetary and exchange rate policies in 51 advanced and developing countries from 1999 to 2021. We introduce a global exposure index to measure countries’ dependence on the US dollar. Our study reveals that the dominant currency framework creates a global monetary cycle driven by the US dollar, exposing non-U.S. economies to the U.S. monetary policy. However, we show that countries can reduce their exposure to the U.S. monetary policy by accumulating reserves and intervening in foreign exchange.
    Keywords: Dominant currency, Trade invoicing, foreign currency-denominated, Trilemma.
    JEL: F
    Date: 2023
  30. By: Dario Guarascio; Philipp Heimberger (The Vienna Institute for International Economic Studies, wiiw); Francesco Zezza
    Abstract: This paper analyses how Italy’s decades-long decline turned the country into the euro area’s Achilles heel, the most vulnerable spot in the common currency. We use a structuralist framework to synthesise different (competing) supply-side and demand-side explanations, accounting for long-term processes and sectoral interdependencies. 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 globalisation and European integration to exacerbate Italy’s decline vis-à-vis its euro area peers.
    Keywords: Italy, decline, euro area, crisis
    JEL: E65 P16 F45 F62
    Date: 2023–07
    Abstract: 전 세계적으로 다수의 국가와 기업이 탄소중립을 추구함에 따라 다량의 온실가스를 배출하는 산업부문의 감축 노력이 강화되고 있다. 본 연구는 주요국의 정부뿐만 아니라 민간의 온실가스 감축 전략을 비교분석하고, 설문조사를 토대로 우리나라 중소기업의 정책 수요를 파악하여 시사점을 도출하였다. 특히 산업부문의 탈탄소화 과정에서 중소기업의 역할이 중요함에도 이를 다각도로 분석한 연구가 부족하다는 점에서 차별성을 확보하고 있다. The international community has stepped up efforts to achieve carbon neutrality or net zero emissions and has begun to expand the scope of greenhouse gas management to all companies in the supply chain. In particular, the decarbonization of industries that emit large amounts of greenhouse gases is an important task for countries not only to effectively respond to climate change, but also to improve their energy security and international competitiveness. Although decarbonization can be achieved by all companies regardless of their sizes, small and medium-sized enterprises (SMEs) are struggling with a lack of resources and capabilities. Therefore, the purpose of this study is to analyze the characteristics of national and multilateral carbon-neutral strategies, identify policy demands of SMEs based on survey results, and derive implications for the decarbonization of the industrial sector and, in particular, SMEs in Korea. Chapter 2 mainly analyzes policies to reduce greenhouse gases in the industrial sector and cases of multilateral cooperation between both major governments and global companies. Sweden, Germany, the United States, the UK and Japan are increasing their financial support for decarbonization efforts in their industrial sectors, also rearranging relevant policies and institutions. Sweden is working closely with the EU and its local governments to support carbon reduction projects, and also subsidizes investments with greenhouse gas reduction benefits but not expected to generate a return on investment without subsidies. Germany is inducing technological innovation and international cooperation among SMEs. The United States is expanding its investment in clean energy and providing research and development funding to SMEs and startups through federal agency-level programs such as SBIR/STTR programs. The UK is promoting decarbonization particularly in high-emitting industrial clusters, and is stimulating private investment through public funding for technology innovation. Japan is expanding its financial support in this area, for instance through tax benefits for companies pursuing green transformation (GX), and helping SMEs and startups enter or expand their business in developing countries through funds including Official Development Assistance (ODA).(the rest omitted)
    Keywords: Environmental policy; industrial policy; carbon neutrality; decarbonization; climate change; sustainability; SMEs
    Date: 2023–05–28
  32. By: Sophie Brana (University of Bordeaux); Dalila Chenaf-Nicet (University of Bordeaux); Delphine Lahet (University of Bordeaux)
    Abstract: Studies of the determinants of cross-border bank claims are based on the economic situations of the lending and borrowing countries – the traditional push/pull macroeconomic factors – but fail to take into account the situation of the international banks that are at the origin of these flows and the presence of their subsidiaries in emerging countries. They also fail to explain the huge decrease in cross-border bank flows after the 2008 global financial crisis. In this paper, we analyze the determinants of cross-border bank claims on a panel of 28 emerging countries for three cases and transitional countries (claims on all sectors, claims on the nonbank sector, and interbank loans) and explicitly integrate banking determinants. Thus, we account for the financial situation of international lender banks and the existence of foreign locations in emerging countries as a potential pull stabilizing factor. We show that the presence of foreign banks in emerging countries is clearly a factor of attraction for cross-border bank claims. It remains when we explicitly take into account the 2008 crisis but to a lower extent and in favor of interbank loans. This may be proof of support from the international parent banks to their affiliates. Last, the financial situation of international banks, notably their liquidity and ability to respect prudential rules, also plays a role in their financing strategies in emerging countries.
    Keywords: cross-border bank claims; subsidiaries; global banks; emerging countries; Lasso method
    JEL: G
    Date: 2023
  33. By: David Wuepper; Haoyu Wang; Wolfram Schlenker; Meha Jain; Robert Finger
    Abstract: We estimate annual discontinuities in remotely-sensed crop yields at all international land borders and link them to changes in the economic freedom index by the Fraser Institute, a country-level measure of institutional quality. Each point of the ten-point index increases the discontinuity by 2.2% over the next five years, highlighting that institutional reforms have the potential to close some of the observed crop yield gap. Three subcategories are consistently significant: credit market regulation, inflation, and the top marginal tax rate. We present suggestive evidence that higher average yields are achieved through increased use of irrigation and mechanization. Yield variability remains unchanged, and reforms lead to cropland expansion through deforestation.
    JEL: O13 Q1
    Date: 2023–07

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