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on International Trade |
| By: | Cabrini, Silvina; Olemberg, Demián; Cristeche, Estela; Pace, Ignacio; Amaro, Ignacio Benito |
| Abstract: | Climate change poses a challenge to agri-food systems. Recognizing the need for emission reduction, the European Union (EU) is contemplating the integration of the agricultural sector into formal carbon pricing mechanisms. This study employs the CLIMTRADE model to assess the potential consequences of a EU's carbon border adjustment mechanism (CBAM) on beef trade for Argentina, Brazil and Uruguay. The model considers a baseline bilateral trade matrix, emission intensities, international transport emissions, and potential carbon prices, resulting in the corresponding impacts on imports and exports, depending on the scenario considered. The results indicate that imposing a carbon tax within the EU leads to reduced beef imports, increased domestic prices, and potential carbon leakage. However, deploying a CBAM could mitigate carbon leakage and further reduce emissions. This study contributes to the discussion on the consequences for livestock production in South America of the advancement of emission reduction policies in agriculture driven by developed countries and their implications for the configuration of international trade. |
| Keywords: | Environmental Economics and Policy, International Relations/Trade |
| Date: | 2024–07–26 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344399 |
| By: | Siying Ding; Ahmad Lashkaripour; Volodymyr Lugovskyy |
| Abstract: | We develop a method to measure the incidence of monopolistic markup distortions in the global economy. Using semi-parametric formulas, we measure how trade modifies the deadweight loss of markups through two channels: (1) trade-induced change in markup dispersion, and (2) international rent-shifting. The latter, which has received less attention in the literature, constitutes zero-sum welfare effects similar to implicit tariffs that tilt the terms of trade in favor of countries exporting high-markup goods. To measure these effects, we estimate firm-level markups globally using demand-based and cost-based methods and compile new data on global profit ownership. Our findings reveal that trade has greatly reshaped the global incidence of monopoly distortions, reducing the deadweight loss of markups for high-income countries by 15% while increasing it by 44% among low-income nations. These asymmetric effects are primarily due to international rent-shifting and represent an 8% implicit tariff imposed by high-income countries on low-income partners. These findings are robust to accounting for global input-output linkages and fixed investment costs. Our results challenge the prevailing view that high-income countries have made disproportionately greater concessions under existing trade agreements. We show that rent-shifting externalities can be effectively mitigated through additional preferential tariff concessions under the WTO or a globally coordinated destination tax on profits. |
| Keywords: | markup, incidence, distortion, market power, trade, profits, rents, welfare, unequal, tariff, policy |
| JEL: | F12 F13 F14 O24 O25 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11211 |
| By: | Agnes Norris Keiller |
| Abstract: | In 2016, the UK voted to leave the European Union and growth in UK manufacturing investment ground to a halt. This paper uses administrative trade data to investigate the causal relationship between these events. We exploit firm-level customs data from 2005 on-wards to quantify firms' exposure to EU and non-EU trade in inputs and outputs. Focusing on investment as a forward-looking, dynamic outcome (since the UK did not leave the EU until 2021), we relate firms' investment to their pre-referendum EU exposure. This analysis shows firms' exposure to EU trade had a negative impact on investments post-referendum, especially in 2021. Estimated impacts are stronger for import exposure than for export exposure and there is some evidence of depressed investment from exposure to non-EU imports, likely due to the large depreciation in sterling that followed the vote. Had the UK voted to remain in the EU, these estimates imply manufacturing investment would have been over 7% higher, about £2.4 billion annually between 2016 and 2021. Data Disclaimer: this work was produced using statistical data from the UK Office for National Statistics ("ONS"). The use of ONS data does not imply the endorsement of the ONS in relation to its interpretation or analysis. Analysis using ONS research datasets may not exactly reproduce ONS aggregates and was carried out in the Secure Research Service, part of the Office for National Statistics. |
| Keywords: | firm level, investment, international trade, European Union, manufacturing, Brexit |
| Date: | 2024–08–05 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2025 |
| By: | Quimba, Francis Mark A.; Barral, Mark Anthony A. |
| Abstract: | This study proposes using text-of-trade analysis to understand the design of the Japan-Philippines Economic Partnership Agreement and the European Free Trade Association (EFTA). It examines the similarities between these agreements and other free trade agreements of Japan and EFTA member countries and how these similarities impact Philippine trade. The paper illustrates how text analysis can complement conventional methods, such as the gravity model and other econometric approaches, in assessing trade agreement impacts. The results reveal that similarities across trade agreements, whether at the document, chapter, or topic-specific provision levels, which strongly reference sustainable development, can influence and foster trade. |
| Keywords: | free trade agreement;trade |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:phd:pjdevt:pjd_2024_vol__48_no__1c |
| By: | Liu, Jiancong; Auboin, Marc; Haile, Beliyou; Wang, Yu |
| Abstract: | We use panel data for listed firms from China for 2013-2021 to examine the association between their export earnings and trade finance, particularly those receiving trade loans. Results show that a percent increase in trade finance loan is associated with 0.067-0.083 percent increase in export earnings depending on the model. When we proxy trade finance by the sum of trade finance loans and export-adjusted notes receivable, elasticity estimates range between 0.18-0.31 depending on the sample of exporters. These estimates are comparable to single and multi-instrument trade finance instrument elasticities in the literature. Elasticity of export earnings is higher for smaller firms that may have relatively limited financing options from domestic capital markets. Given that listed firms represent the largest companies, we acknowledge that study findings may not be generalizable to the universe of highly heterogeneous Chinese traders. Nonetheless, our results suggest that well-functioning markets for trade finance are likely to enhance trade, while, by contrast, lack of affordable trade finance can be a barrier to trade, or a trade cost, in its own right. |
| Keywords: | Trade, empirical studies on trade, trade finance |
| JEL: | F10 G21 O16 F14 F19 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:wtowps:300859 |
| By: | Bosone, Costanza; Stamato, Giovanni |
| Abstract: | Rising trade tensions, a spate of trade-inhibiting policy measures and a weakening of multilateral institutions have sparked a growing concern about the potential implications of global trade fragmentation. Yet, empirical evidence that geopolitical considerations are already materially affecting trade flows is scant. In this study, we quantify the impact of geopolitical tensions on trade of manufacturing goods over the period 2012-2022 in a structural gravity framework. To capture the influence of geopolitical tensions, we use a measure of geopolitical distance based on UN General Assembly voting. The econometric analysis offers robust evidence that geopolitical distance has become a trade friction and its impact has steadily increased over time. Our results suggest that a 10% increase in geopolitical distance, like the observed increase in the US-China distance since 2018, is associated with a reduction in trade by about 2%. Our findings also highlight a differential and stronger impact on advanced economies and the emergence of friend-shoring. JEL Classification: F10, F13, F14, F15 |
| Keywords: | friend-shoring, geopolitics, structural gravity models, trade costs, trade fragmentation |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20242960 |
| By: | El Weriemmi, Malek; Bakari, Sayef |
| Abstract: | This study rigorously investigates the effect of agricultural exports on economic growth across 12 low-income countries—Burkina Faso, Burundi, Central African Republic, Ethiopia, Gambia, Madagascar, Mali, Niger, Rwanda, Sudan, Togo, and Uganda—during the period from 2004 to 2023. Employing an advanced gravity model with both fixed and random effects, the analysis aims to discern the nuanced impact of agricultural exports on economic growth. The model is designed to account for various control variables, including capital, labor, other exports, and imports, to ensure a precise measurement of the agricultural export variable's influence. By integrating these controls, the study seeks to provide a comprehensive understanding of how agricultural exports contribute to economic development in these countries, highlighting both direct and indirect effects within the broader economic context. |
| Keywords: | Agricultural Exports, Economic Growth, Static Gravity Model, Low-Income-Countries. |
| JEL: | F11 F13 F14 F43 O47 Q17 Q18 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121631 |
| By: | Giancarlo Corsetti; Banu Demir; Beata Javorcik |
| Abstract: | Geopolitical fragmentation triggers complex dynamics in international trade. Sanctions forcing existing (large) exporters to discontinue or reduce their sales in target countries create profit opportunities in these markets. But firms responding to these opportunities face (i) risk of nonpayment, (ii) reputational risks and the threat of punitive measures, if exposed trading with unfriendly countries and (iii) higher costs of established trading practice, e.g., payment in international currencies through inter national circuits. This paper builds a stylized model accounting for these factors and provides empirical evidence exploiting developments in Türkiye’s international trade in the aftermath of Russia’s invasion of Ukraine and the subsequent introduction of western sanctions on Russia. It shows that Turkish exports to Russia have risen sharply across sanctioned and nonsanctioned products, with Turkish firms charging higher markups and prices. These developments were accompanied by an increase in the share of cash-in-advance transactions and the share of Turkish firms invoicing in Turkish liras instead of dollars. Overall, the paper provides evidence of strong trade diversion, particularly for products for which the pre-war market share of European exporters was high. Yet, exports of firms with significant Western ties via ownership and trade have dropped or remained unchanged. |
| Date: | 2024–08–10 |
| URL: | https://d.repec.org/n?u=RePEc:oxf:wpaper:1052 |
| By: | Inoue, Yutaro; Saito, Katsuhiro; Kawasaki, Kentaro |
| Abstract: | This study examines the effects of Non-Tariff Measures (NTMs) on global agro-food trade by analyzing seven different NTMs and their interactions. We estimated structural gravity models with the Poisson Pseudo Maximum Likelihood estimator. The results indicate that NTMs generally restrict agro-food trade, reducing it by approximately 28.6% compared to a no-NTM scenario. Two NTMs show larger negative trade effects than SPS and TBT, the commonest measures in agro-food trade. Additionally, the negative impacts of NTMs vary by sector; animal-based product trade may be restricted due to food safety concerns, whereas plant-based product trade seems to be reduced by protectionist measures. On the contrary, NTMs may have positive effects in some sectors by correcting market failures, reducing transaction costs, and aligning with the importing countries’ economic or industrial strategies. Policymakers should balance the benefits of NTMs against the potential loss of food access and ensure inter- ministerial coordination when setting NTMs. |
| Keywords: | International Relations/Trade |
| Date: | 2024–07–26 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344387 |
| By: | Célestin Coquidé (UTINAM - Univers, Théorie, Interfaces, Nanostructures, Atmosphère et environnement, Molécules (UMR 6213) - INSU - CNRS - Institut national des sciences de l'Univers - CNRS - Centre National de la Recherche Scientifique - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]); José Lages (UTINAM - Univers, Théorie, Interfaces, Nanostructures, Atmosphère et environnement, Molécules (UMR 6213) - INSU - CNRS - Institut national des sciences de l'Univers - CNRS - Centre National de la Recherche Scientifique - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]); Dima Shepelyansky (LPT - Laboratoire de Physique Théorique - UT3 - Université Toulouse III - Paul Sabatier - UT - Université de Toulouse - CNRS - Centre National de la Recherche Scientifique - FeRMI - Fédération de recherche « Matière et interactions » - INSA Toulouse - Institut National des Sciences Appliquées - Toulouse - INSA - Institut National des Sciences Appliquées - UT - Université de Toulouse - UT3 - Université Toulouse III - Paul Sabatier - UT - Université de Toulouse - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Abstract During the April 2023 Brazil–China summit, the creation of a trade currency supported by the BRICS countries was proposed. Using the United Nations Comtrade database, providing the frame of the world trade network associated to 194 UN countries during the decade 2010–2020, we study a mathematical model of influence battle of three currencies, namely, the US dollar, the euro, and such a hypothetical BRICS currency. In this model, a country trade preference for one of the three currencies is determined by a multiplicative factor based on trade flows between countries and their relative weights in the global international trade. The three currency seed groups are formed by 9 eurozone countries for the euro, 5 Anglo-Saxon countries for the US dollar and the 5 BRICS countries for the new proposed currency. The countries belonging to these 3 currency seed groups trade only with their own associated currency whereas the other countries choose their preferred trade currency as a function of the trade relations with their commercial partners. The trade currency preferences of countries are determined on the basis of a Monte Carlo modeling of Ising type interactions in magnetic spin systems commonly used to model opinion formation in social networks. We adapt here these models to the world trade network analysis. The results obtained from our mathematical modeling of the structure of the global trade network show that as early as 2012 about 58% of countries would have preferred to trade with the BRICS currency, 23% with the euro and 19% with the US dollar. Our results announce favorable prospects for a dominance of the BRICS currency in international trade, if only trade relations are taken into account, whereas political and other aspects are neglected. |
| Keywords: | World trade network, International trade, Currency, Opinion formation model |
| Date: | 2023–09–19 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04641803 |
| By: | Bai, Yan; Jin, Keyu; Lu, Dan |
| Abstract: | This paper formalizes a classic idea that in second-best environments trade can induce welfare losses: incremental income losses from distortions can outweigh trade gains. In a Melitz model with distortionary taxes, we derive sufficient statistics for welfare gains/losses and show departures from the efficient case (Arkolakis, Costinot, and Rodríguez-Clare 2012) can be captured by the gap between an input and output share and domestic extensive margin elasticities. The loss reflects an endogenous selection of more subsidized firms into exporting. Using Chinese manufacturing data in 2005 and model-inferred firm-level distortions, we demonstrate that a sizable negative fiscal externality can potentially offset conventional gains. |
| JEL: | L60 F14 H25 O19 P31 P33 |
| Date: | 2024–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124221 |
| By: | King Abdullah Petroleum Studies and Research Center (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | Hydrogen is projected to play an important role in meeting decarbonization targets. Hydrocarbon-rich countries perceive this as an opportunity to decarbonize existing assets and monetize undeveloped hydrocarbon reserves. Meanwhile, non-traditional energy exporters rich in renewable energy resources view hydrogen as an opportunity to improve grid stability and a means to export surplus electricity. |
| Keywords: | Carbon, Carbon capture and storage, Carbon neutrality, Hydrogen |
| Date: | 2023–03–21 |
| URL: | https://d.repec.org/n?u=RePEc:prc:wbrief:ks--2022-wb08 |
| By: | Horn, Henrik (Research Institute of Industrial Economics (IFN), Stockholm & Centre for Economic Policy Research, London); Lavenius, Axel (IVL Swedish Environmental Research Institute, Stockholm); Sanctuary, Mark (KTH Royal Institute of Technology, Stockholm & IVL Swedish Environmental Research Institute, Stockholm) |
| Abstract: | Protecting biodiversity will require the phase-out of harmful production at a large scale. However, some of these stranded investments will be foreign-owned, and can therefore be protected by the more than 2 600 investment treaties that are in force worldwide. The compensation requirements that these treaties impose are often alleged to dissuade host countries from undertaking desirable policy measures that harm foreign investor interests. This paper seeks to identify the countries, and the bilateral investment treaties they are parties to, that pose the most severe threat to biodiversity protection. It assumes that these treaties combine three features: (i) they can be interpreted to impose far-reaching protection of (ii) considerable foreign investment positions, (iii) in countries with vulnerable biodiversity. To operationalize these notions, the paper identifies 15 criteria that a treaty must fulfil to be considered problematic from a host country regulatory perspective. It also introduces an index for biodiversity vulnerability, based on Red List data. The analysis of 1 781 bilateral investment treaties and the 172 countries that are parties to these treaties identifies 12 countries that are the most concern from a biodiversity perspective. These countries are almost all newly industrialized and middle-income. The paper also identifies 44 agreements that from a biodiversity perspective should be prioritized targets for renegotiation or termination. |
| Keywords: | Biodiversity; international investment agreements; investment treaties; stranded assets; regulatory chill |
| JEL: | F21 F23 F53 K33 Q57 |
| Date: | 2024–08–12 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cesisp:0500 |
| By: | LEE, Seungshin (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Choi, Wonseok (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Moon, Ji Young (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); NA, Su Yeob (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Oh, Jonghyuk (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | This paper reviews China's policy of nurturing small and medium sized enterprises. The Chinese government is expanding its establishment of national manufacturing innovation centers necessary to promote national strategies. It plays a very important role in the financial support process for these hidden champions. This is because the government certification process to identify hidden champions is linked to direct and indirect financial support using government and private capital. This paper attempted to analyze the management situation and export competitiveness of listed hidden champions. As a result of analyzing the trade statistics of materials, parts, and equipment from 2012 to 2022, when China's policy of cultivating foster hidden champions was fully implemented, the global trade balance of the China's materials, parts, and equipment industry increased significantly from a deficit of $55.6 billion in 2012 to a surplus of $264.1 billion in 2022. The improvement of China's competitiveness in the fields of materials, parts, and equipment can also be seen as a change in the trade specialization index (TSI) of these industries. Looking at China's global trade specialization index for materials, parts, and equipment, it was import-specialized at -0.033 in 2012, but rose to 0.100 in 2022, improving export competitiveness. Korea should recognize the changes in the trade and industrial structure between Korea and China and form a new paradigm of economic cooperation to overcome the limitations of economic exchanges between the two countries. China, which used to be seen as a manufacturing base for other countries, must now be seen as an advanced country in new industries with which the current structure of economic cooperation structure must be modified accordingly. |
| Keywords: | nurturing enterprises; china economy; hidden champions |
| Date: | 2024–08–05 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kiepwe:2024_024 |
| By: | Tobias Kruse; Jonas Teusch; Filippo Maria D’Arcangelo; Mauro Pisu |
| Abstract: | What is the effect of recent carbon price developments on domestic emissions and carbon leakage? This paper first develops a comprehensive plant-level carbon pricing dataset for key heavy industries at risk of carbon leakage, i.e. aluminium, cement and steel plants in 140 countries, drawing on satellite observations. The new dataset reveals that the average plant-level carbon price for these sectors increased by a factor of seven from USD 1.4 per tonne of CO2-equivalent (tCO2e) in January 2015 to USD 11/tCO2e in December 2021. Over the same time period, carbon price asymmetries i.e. the average difference in carbon prices among trading partners, increased by more than 350%. The paper then tests whether higher carbon prices have reduced plant-level emissions and whether rising carbon price asymmetries have affected international trade and led to carbon leakage. Results suggest that, on average, a USD 1/tCO2e increase in carbon prices reduces cement and steel plants’ emissions by 1.3%. Back-of-the-envelope calculations suggest that carbon leakage through international trade offset around 13% of these domestic emission reductions. |
| Keywords: | carbon leakage, carbon pricing, climate policy, emissions trading, industrial decarbonisation |
| JEL: | C23 H23 Q41 Q48 Q54 F18 |
| Date: | 2024–07–25 |
| URL: | https://d.repec.org/n?u=RePEc:oec:ecoaaa:1813-en |
| By: | Federico S. Mandelman; Yang Yu; Francesco Zanetti; Andrei Zlate |
| Abstract: | We document a steady decline in low-skilled immigration that began with the onset of the Great Recession in 2007, which was associated with labor shortages in low-skilled service occupations and a decline in the skill premium. Falling returns to high-skilled jobs coincided with a decline in the educational attainment of native-born workers. We develop and estimate a stochastic growth model with endogenous immigration and training to account for these facts and study macroeconomic performance and welfare. Lower immigration leads to higher wages for low-skilled workers and higher consumer prices. Importantly, the decline in the skill premium discourages the training of native workers, persistently reducing aggregate productivity and welfare. Stimulus policies during the COVID-19 pandemic, amid a widespread shortage of low-skilled immigrant labor, exacerbated the rise in consumer prices and reduced welfare. We show that the 2021-2023 immigration surge helped to partially alleviate existing labor shortages and restore welfare. |
| Keywords: | immigration, skill premium, task upgrading, heterogeneous workers |
| JEL: | F16 F22 F41 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11202 |
| By: | Jaghdani, Tinoush Jamali; Glauben, Thomas; Prehn, Sören; Götz, Linde; Svanidze, Miranda |
| Abstract: | The international wheat market has entered into a new era since 2000 as the structural changes in post-Soviet Union states had impacts. Kazakhstan, the Russian Federation, and Ukraine (KRU) have started to utilize their vast resources and rapidly became major actors in international grain markets. Romania in East Europe is another emerging grain exporter upon the collapse of the Iron Wall. Upon the Russia invasion of Ukraine and short-run disruptions in global wheat, corn and oilseed supply chains, it becomes a question how different is the sta-bility of grain trade relation between these new actors and old actors. We have tried to respond to this question by using the annual trade data during 2001-2021 and applying the discrete time hazard model to estimate the baseline hazard and the survival ratio for 11 major wheat exporters. The results of these estimations show that we can’t recognize separate clusters for old and new actors, and the probability of trade survival over a longer period is very diverse between old actors and new actors. |
| Keywords: | International Relations/Trade, Supply Chain |
| Date: | 2023–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:ags:gewi23:344241 |
| By: | Jésus Fernández-Villaverde; Tomohide Mineyama; Dongho Song; Jesús Fernández-Villaverde |
| Abstract: | After decades of rising global economic integration, the world economy is now fragmenting. To measure this phenomenon, we introduce an index of geopolitical fragmentation derived from various empirical indicators. This index is developed using a flexible dynamic factor model with time-varying parameters and stochastic volatility. We then employ structural vector autoregressions and local projections to assess the causal effects of changes in fragmentation. Our analysis demonstrates that increased fragmentation negatively impacts the global economy, with emerging economies suffering more than advanced ones. Notably, we document a key asymmetry: fragmentation has an immediate negative effect, while the benefits of reduced fragmentation unfold gradually. A sectoral analysis within OECD economies reveals that industries closely linked to global markets —such as manufacturing, construction, finance, and wholesale and retail trade— are adversely affected. Finally, we examine the interaction between fragmentation and the economic dynamics of regional economic blocs, highlighting significant differences in the impacts across various geopolitical blocs. |
| Keywords: | dynamic factor model, causality, geopolitical fragmentation, fragmentation index |
| JEL: | C11 C33 E00 F01 F20 F40 F60 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11192 |
| By: | Michel Beine; Michel Bierlaire; Evangelos Paschalidis; Silvia Varotto; Andreas B. Vortisch |
| Abstract: | We address the question of the impact of a possible Trump reelection on the location choices of potential Mexican migrants. We use migration aspiration data from the Gallup World Poll Surveys which provide the preferred location choices of Mexican respondents before, during and after the Trump Presidency. We show that Trump presidency led to an increase in disapproval rates about the US leadership among Mexican respondents, which in turn led to a reduced level of attractiveness of the US location. Using a Cross-Nested Logit model that allows to account for the heterogeneity in the substitution patterns between alternative locations to the US, we simulate the impact of a possible reelection of Donald Trump based on different scenarios about these dis-approval rates. We find that such a reelection would lead to an increase in the number of stayers in Mexico but would also create heterogeneous immigration pressures from Mexico across potential foreign locations. In particular, countries such as Canada, the UK, Germany, Spain, and France would face significantly higher increases in Mexican immigration pressures. We also show that the reelection of Donald Trump would lower the skill content of Mexican potential immigrants in the US and would induce an opposite effect in destinations that are perceived as close substitutes. |
| Keywords: | location choice models, migration aspirations, Mexican immigrants, substitution effects |
| JEL: | C25 F22 J61 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11195 |
| By: | James R. Markusen |
| Abstract: | Applied general-equilibrium (AGE) models have often made compromises to circumvent difficult modeling problems. One of these is avoiding endogenous zeros, ruling out important questions. Traditional perfect competition models: when do technologies or trade links switch from active to inactive or vice versa? Heterogeneous firms: what types of firms are active in equilibrium? Multinationals: when do firms switch from exporting to foreign production? Capacity constraints: could trade links or production sectors hit capacity limits? Here I exploit the complementarity approach to general equilibrium, focusing on modeling heterogeneous firms and endogenous multinational production. Instead of the traditional continuum formulation, there is a discrete and finite set of firm types, differing in marginal costs across but not within types. There is an upper bound on the number of firms that can enter in each firm type. Formulated as a non-linear complementarity problem, we can solve for the set of active firm types in relation to characteristics of the economy such as size or trade costs and their modes of operation: no entry, domestic, exporting, multinational. The analysis easily incorporates endogenous markups and positive aggregate profits. Productivities can be calculated directly from data and no integrals/integration/parametric distributions are required. |
| JEL: | C63 F12 F23 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32721 |
| By: | Gafarova, Gulmira; Perekhozhuk, Oleksandr; Glauben, Thomas |
| Abstract: | This study looks at whether Kazakh and Russian wheat exporters leverage their dominant share of the wheat markets in the South Caucasus to exercise market power. We apply a three-stage estimation for systems of simultaneous equations and Zellner’s seemingly unrelated regression to analyse residual demand elasticity. The results of both estimations provide empirical evi-dence of Russian market power in the wheat markets of the South Caucasus but no evidence of a Kazakh oligopoly. Russian exporters possess greater market power in Armenia than in Geor-gia. Market power depends on the presence of competitors in the destination market. The results show that Kazakh exporters restrict the market powers of Russian exporters in the Azerbaijani wheat market, while Russian exporters constrain the market power of Kazakh exporters in the Azerbaijani and Georgian wheat markets. Ukrainian wheat exporters are able to intervene in the market powers of Russian exporters in Azerbaijan and Georgia, while they restrict Kazakh oligopoly in the Georgian market. Some export restrictions imposed by wheat exporting coun-tries significantly affected competition in wheat importing countries. |
| Keywords: | International Relations/Trade |
| Date: | 2023–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:ags:gewi23:344230 |
| By: | Zi Wang; Xingcheng Xu; Yanqing Yang; Xiaodong Zhu |
| Abstract: | We propose a deep learning framework, DL-opt, designed to efficiently solve for optimal policies in quantifiable general equilibrium trade models. DL-opt integrates (i) a nested fixed point (NFXP) formulation of the optimization problem, (ii) automatic implicit differentiation to enhance gradient descent for solving unilateral optimal policies, and (iii) a best-response dynamics approach for finding Nash equilibria. Utilizing DL-opt, we solve for non-cooperative tariffs and industrial subsidies across 7 economies and 44 sectors, incorporating sectoral external economies of scale. Our quantitative analysis reveals significant sectoral heterogeneity in Nash policies: Nash industrial subsidies increase with scale elasticities, whereas Nash tariffs decrease with trade elasticities. Moreover, we show that global dual competition, involving both tariffs and industrial subsidies, results in lower tariffs and higher welfare outcomes compared to a global tariff war. These findings highlight the importance of considering sectoral heterogeneity and policy combinations in understanding global economic competition. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.17731 |
| By: | Wellhausen, Rachel L |
| Abstract: | In the global waste trade, importers buy foreign-origin waste and scrap. After recycling waste products into raw materials destined for new goods, the leftovers are just trash—imported negative externalities that can overwhelm low-capacity developing states. Yet there is power in piles of foreign garbage, especially as modern waste management systems are designed around trade. When a waste product’s imports concentrate in fewer states, those states gain market power to raise tariffs while still accommodating domestic demand. To support the theory, I introduce a list of 179 internationally traded waste products (HS 6-digit), as well as novel data on product-level tariffs and the international distribution of waste imports (1995–2020). I show the theory in action following China’s shocking 2017 ban on imports of 26 waste products, where states on the receiving end of diverted imports have exercised their newfound power to use tariffs in service of environmental protection. |
| Keywords: | Social and Behavioral Sciences, Global South, end-of-life (EOL) waste, environmental protection, tariffs |
| Date: | 2023–08–23 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:globco:qt40m4179x |
| By: | Görg, Holger (Kiel Institute for the World Economy); Jäkel, Ina C. (Aarhus University) |
| Abstract: | In this paper, we investigate whether gender norms and institutions act as a constraint to the performance of female businesses. We exploit novel and unique micro data on start-ups in Denmark, which we combine with information on individual-level characteristics of the entrepreneur as main decision maker of the firm. We overcome the challenge of disentangling norms and institutional biases against women from other constraints and hurdles that female businesses might face by exploiting detailed trade data. In this trade context, we study the relative performance of firms across markets with varying institutions, while controlling for other factors that affect female businesses uniformly across all markets. We provide evidence that gender inequality and institutional biases against women in trade partner countries play an important role in explaining gender differences in export and import behaviour. We also perform an event study of a concrete policy change in a destination market – the introduction of quotas for the share of females on the boards of directors in Norway – and how it has affected the gender gap in trade participation. |
| Keywords: | gender inequality, firm internationalization, start-up performance |
| JEL: | F14 J16 M13 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17123 |
| By: | Bakari, Sayef |
| Abstract: | This study explores the determinants of economic growth in 17 East Asia-Pacific countries from 2004 to 2023, analyzing the effects of capital, labor, digitalization, financial development, natural resources, and trade openness. Utilizing a suite of statistical and econometric techniques—including descriptive statistics, correlation analysis, Static Gravity Model, Generalized Method of Moments (GMM), and Two-Stage Least Squares (2SLS)—the research reveals significant insights into the region's economic dynamics. Descriptive statistics illustrate considerable variation in key economic indicators, with capital and financial development showing strong positive correlations with GDP. The Static Gravity Model and GMM results confirm the vital roles of capital, labor, financial development, and trade openness in driving economic performance, while digitalization and natural resources display limited or non-significant impacts. The 2SLS model further supports the robustness of these findings, highlighting the dominant influence of capital and labor despite the less pronounced effects of digitalization and natural resources. This study offers a comprehensive assessment of the factors shaping economic growth in the East Asia-Pacific region, providing valuable implications for policy and investment strategies. |
| Keywords: | Digitalization, Natural Resources, Trade Openness, Economic Growth, Panel Data Analysis, East Asia-Pacific Countries. |
| JEL: | D83 F10 F13 F14 L63 L86 L96 N55 N70 N75 O13 O24 O47 P28 P33 P45 P48 Q26 Q27 Q34 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121643 |
| By: | Brian D. Varian |
| Abstract: | At the time of Australian federation in 1901, Queensland’s manufacturing sector was considerably less productive than those of its southern neighbours: New South Wales and Victoria. It remained propped by a protectionist tariff policy that was the most trade-restrictive among the policies of all six colonies. The formation of the Australian customs union entailed both the free entry into Queensland of Australian goods and the replacement of Queensland’s colonial tariff by the Commonwealth’s common external tariff. Following a difference-indifferences approach across industries, this paper analyses the effect of Australian market integration, including the adoption of the common external tariff, on Queensland’s intraindustry growth in output, employment, labour productivity, total factor productivity, the number of factories, and average output per factory. This case study makes use of the annual, industry-specific output data reported by the colony—the only Australian colony to have done so both pre- and post-federation. The predictions of ‘new trade theory’ do not find much support in this case study. Nevertheless, the intensity of trade liberalisation was significantly and negatively associated with intra-industry growth in employment, to the extent that Queensland’s manufacturing employment would have been an estimated 11.4 per cent higher in 1906, but for federation. |
| Keywords: | Australia, customs union, federation, manufacturing, market integration, tariffs |
| JEL: | F12 F13 F15 N67 N77 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:auu:hpaper:122 |
| By: | Ajewole, Kayode; Johnson, Michael |
| Abstract: | This study deals specifically with the international transmission of wheat prices wherein the effect of prices in one market impacts the prices of another. Specifically, it shows that import prices in some countries respond in an asymmetric fashion to changes in the export prices of U.S. wheat. Our results indicate that market concentration in the importing country influences price asymmetry and amount of price variability sends a sufficient clear signal to market participants. We also find that the 2008 financial and food price crisis changed the degree of asymmetry in most of the countries studied in this paper. |
| Keywords: | Demand and Price Analysis, International Relations/Trade |
| Date: | 2024–07–26 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344396 |
| By: | Ondarza, Nicolai$cvon |
| Abstract: | Labour has won a landslide in the United Kingdom (UK) snap elections and will now lead the government. Following the mutual estrangement caused by Brexit, among other changes, this provides an opportunity to revitalise relations with the European Union (EU). Particularly in foreign, security and defence policy, cooperation has already increased in the wake of Russia's war of aggression, but mainly on an ad hoc basis. In the medium term, it is not a question of reversing Brexit, but rather of establishing an EU-UK Common Strategic Initiative - in other words, a new model for structured relations with a partner that is very important for the EU and Germany. Here, the EU should also show more flexibility than in the past. |
| Keywords: | Vereinigtes Königreich, Europäische Union, Beziehungen zwischen EU und Großbritannien, Außen- und Sicherheitspolitik, britische Unterhauswahl 2024, Gemeinsame Strategische EU-UK-Initiative, Premierminister Rishi Sunak, Keir Starmer, Labour-Partei, United Kingdom (UK), European Union (EU), Northern Ireland, Brexit, EU-UK Common Strategic Initiative, Rishi Sunak, Kier Starmer, Nigel Farage, Conservative Party, elections, Labour, Liberal Democrats, Permanent Structured Cooperation (PESCO) |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:swpcom:300619 |
| By: | Campo, Francesco; Mendola, Mariapia; Morrison, Andrea; Ottaviano, Gianmarco |
| Abstract: | We investigate the importance of co-ethnic networks and diversity in determining immigrant inventors' settlements in the United States by following the location choices of thousands of them across counties during the Age of Mass Migration. To do so, we combine a unique United States Patent and Trademark Office historical patent dataset on immigrants who arrived as adults with Census data and exploit exogenous variation in both immigration flows and diversity induced by former settlements, WWI, and the 1920s Immigration Acts. We find that co-ethnic networks play an important role in attracting immigrant inventors. Yet, we also find that immigrant diversity acts as an additional significant pull factor. This is mainly due to externalities that foster immigrant inventors' productivity. |
| JEL: | F22 J61 O31 |
| Date: | 2022–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124052 |
| By: | Ramakrishnan Padmanabhan; Chandan Satyarth; Sundaravalli Narayanaswami |
| Abstract: | In recent years, despite reforms and ambitious initiatives like establishing exchanges to enhance transparency in the gold ecosystem, significant time has been consumed by corrective actions and a lack of clear government direction. The corrective actions included the decisions taken during the intervention phase (2012-2013), the transparency phase (2014-2018) and the RBI circulars, notifications and guidelines post 2012 till date. Some of the aspects of gold policy that require corrective action may include the Free Trade Agreements with different countries and trade blocs, different government of India notifications to tackle the import of gold exploiting the India Government Policy loopholes. A review may be timely of the NITI Aayog Report on Transformation Gold Policy issued in February 2018, the recommendations of IGPC-IIMA working group and the subsequent launch of India International Bullion Exchange (IIBX) and its future. There's a need for decisive steps that promise long-term benefits for the nation. |
| Date: | 2024–08–12 |
| URL: | https://d.repec.org/n?u=RePEc:iim:iimawp:14714 |
| By: | Michael Sposi; Kei-Mu Yi; Jing Zhang |
| Abstract: | We add to recent evidence on deindustrialization and document a new pattern: increasing industry polarization over time. We assess whether these new features of structural change can be explained by a dynamic open economy model with two primary driving forces, sector-biased productivity growth and sectoral trade integration. We calibrate the model to the same countries used to document our patterns. We find that sector-biased productivity growth is important for deindustrialization by reducing the relative price of manufacturing to services, and sectoral trade integration is important for industry polarization through increased specialization. The interaction of these two driving forces is also essential as increased trade openness transmits global technological change to each country's relative prices, sectoral specialization and sectoral trade imbalances. |
| Keywords: | structural change; international trade; Sector Biased Productivity Growth |
| JEL: | F11 F43 O41 O11 |
| Date: | 2024–08–05 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddgw:98630 |
| By: | Liu, Xiaolu; Zhang, Yumei; Lan, Xiangmin; Si, Wei |
| Abstract: | This study employs national Computable General Equilibrium (CGE) model to simulate the impacts of reducing domestic agricultural trade costs on agricultural production, household income, food prices, macroeconomic conditions, as well as food consumption and dietary quality of urban and rural residents. We find that in comparison to trade costs associated with agricultural imports and exports, the reduction of domestic agricultural trade costs is more conducive to expanding food production and cultivation areas, reducing food prices, and improving the dietary conditions of both urban and rural residents in China. Moreover, it stimulates the growth of agricultural, agro-processing, and agrifood system GDP. In terms of specific foods, the reduction in domestic agricultural product trade costs will lower the prices of various food items, decrease the consumption of rice and wheat, and increase the consumption of other types of food. This study provides theoretical and empirical foundations for achieving the dual objectives of revitalizing the national unified market and promoting the transformation of the agrifood system to enhance nutritional welfare within the framework of the new development paradigm, thereby Copyright 2024 by Xiaolu Liu, Yumei Zhang, Xiangmin Lan, and Wei Si. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies. offering valuable insights for informing governmental trade policy decisions. In the future, efforts should focus on intensifying the construction of infrastructure for perishable fresh agricultural products, reducing transportation distances, lowering transport costs, and establishing a "unified national market" in the agricultural sector to enhance the sustainability and resilience of China's agrifood system. |
| Keywords: | Agricultural and Food Policy, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344315 |
| By: | Gelan, Ayele U.; Atkinson, Giles |
| Abstract: | This study is concerned with food security effects of global warming in Kuwait. The Intergovernmental Panel on Climate Change (IPCC) approach to monitor impacts of human activities on climate change has essentially remained top-down. Hence, it fallen out of favour among end user communities. In this procedure, the needs of policymakers at national scale have been peripheral. Kuwait's food security is a good illustration of this. The study is implemented by applying a recursive dynamic computable general equilibrium model for Kuwait. The model was calibrated on Kuwaiti data to examine food security impacts of the five Shared Socio-economic Pathways. The simulation results indicate asymmetrical impacts on Kuwait's agriculture and food processing industries. Arid countries would benefit by enhancing national capacities to assess food security implications of global warming scenarios. |
| Keywords: | arid agriculture; food prices; food security; global warming scenarios; integrated assessment models |
| JEL: | R14 J01 |
| Date: | 2022–09–25 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124122 |
| By: | Basedow, Robert |
| Abstract: | In the last thirty years, international commercial courts (ICCs) have emerged around the world. ICCs offer adjudication in international commercial disputes. They are not creatures of international law – as their name may suggest – but specialized domestic courts embedded in national legal orders. The rise of ICCs is remarkable in that scholars expected commercial arbitration to gradually displace litigation in the twenty first century. What drives the creation of ICCs? Legal research suggests that ICCs are a manifestation of a new era of assertive unilateralism in global governance. Scholars point to states’ geopolitical motives, backlashes against private authority in the form of arbitration, and economic statecraft. Drawing on the New Interdependence Approach, this study argues that most ICCs are the result of policy entrepreneurship of elite law firms in the pursuit of growing the global market for commercial litigation. Depending on the legal-political context, they forge coalitions with domestic judiciaries or political leaders to advance ICC projects. The study highlights deep-rooted changes in the global dispute resolution landscape, the important role of commercial law in International Political Economy (IPE), and points to the mostly overlooked significance of law firms and judiciaries as architects of global economic governance. |
| Keywords: | international commercial courts; commercial law; neoliberalism; new interdependence approach; global economic governance |
| JEL: | J1 |
| Date: | 2024–04–14 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:123505 |
| By: | Kohnert, Dirk |
| Abstract: | Sub-Saharan Africa (SSA) accounts for a third of the countries on the Financial Action Task Force (FATF) grey list. In the Money Laundering and Terrorist Financing (ML/TF) Ranking and Risk Assessment Tool, the region performed poorly in terms of resilience to ML/TF, with more than 60% of countries falling into the high-risk category. Although countries on the grey list are not subject to sanctions, inclusion on the list has a significant impact on their economies. This includes a significant reduction in capital inflows and foreign direct investment. The four main sources of illicit financial flows from SSA, South Africa, the Democratic Republic of Congo, Ethiopia and Nigeria, accounted for more than 50% of total illicit financial flows. While SSA received nearly $2 trillion in foreign direct investment (FDI) and official development assistance (ODA) between 1980 and 2018, it issued over $1 trillion in illicit financial flows. These illicitly acquired funds and diverted from the region continue to pose a development challenge. Illicit financial flows increased overall, but not concerning trade. In the 38 years from 1980 to 2018, they increased significantly in the 2000s, in parallel with the growth of African trade. Emerging and developing countries in Asia and the Middle East have become key targets. Previous initiatives to curb money laundering and improve the exchange of tax information between countries have largely failed, including the three most important: the Financial Action Task Force (founded in 1998), the Global Forum on Transparency and Exchange of Information for Tax Purposes (founded in 2009 ) and the Inclusive Framework on Base Erosion and Profit Shifting (founded in 2016). First, African countries lack the resources and capacity to address illicit financial flows. Second, many advanced economies are not sufficiently engaged in these initiatives. However, the repatriation of illegal funds is an important tool for strengthening the resource base of African countries. In 2020, for example, the United States and the self-governing British Crown Dependency of Jersey, one of the world's most notorious tax and money laundering havens, reached an agreement with Nigeria to repatriate more than $300 million stolen by Nigeria's former military dictator General Sani Abacha. |
| Keywords: | Money laundering; Money Laundering Control Act; Embezzlement; Corruption; tax evasion; Terrorism financing; Informal economy; Illegal drug trade; Human trafficking; Blood diamonds; Good governance; Sub-Saharan Africa; South Africa; Kenya; DR Congo; Ethiopia; Mozambique; Uganda; Rwanda, Nigeria; Ghana, Mali;, Cameroon; |
| JEL: | D23 D53 D63 D74 E21 E26 E42 F35 F38 F53 F54 G28 H26 K42 N27 N47 O17 Z13 |
| Date: | 2024–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121354 |
| By: | Wollni, Meike; Bohn, Sophia; Ocampo Ariza, Carolina; Paz, Bruno; Santalucia, Simone; Squarcina, Margherita; Wätzold, Marlene |
| Abstract: | The global agri-food system faces major challenges of meeting growing food demand in an equitable way, while mitigating environmental impacts such as deforestation, soil degradation and climate change. Voluntary sustainability standards (VSS) have surged in recent decades as a potential instrument to foster more sustainable global value chains and sourcing practices. While the number of VSS impact evaluations is growing, most studies focus on a single outcome dimension. In this paper, we propose a conceptual framework to assess the effects of VSS interventions on sustainable food system outcomes in three dimensions, considering potential trade-offs between them. To illustrate key trade-offs identified in our conceptual framework, we present empirical data from three case studies in Ghana, Rwanda, and Peru. Our empirical results shed light on associations between certification and various outcomes, including agricultural yields and income, biodiversity at farm and landscape scales, female empowerment, and food security. We highlight the importance of balancing trade-offs in multiple sustainability dimensions and assessing VSS performance within the broader policy and landscape context. Our study contributes to ongoing discussions on the effectiveness of VSS in promoting sustainability while highlighting potential trade-offs that must be addressed to achieve more sustainable food systems. |
| Keywords: | Supply Chain, Sustainability |
| Date: | 2024–07–26 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344358 |
| By: | Cullen S. Hendrix (Peterson Institute for International Economics) |
| Abstract: | This Policy Brief assesses the prospects for three Sub-Saharan African countries--Madagascar, Mozambique, and Tanzania--for providing stable supplies of natural graphite to the US market, considering both domestic factors in the three countries and US policies established by the Inflation Reduction Act. These countries have adequate graphite resources and operators headquartered in Western allies. The problem is that there are significant governance-related challenges in Madagascar and Mozambique and some domestic challenges to incorporating East African graphite into US electric vehicle supply chains. US critical mineral sourcing policies will need to be modified to facilitate greater involvement of African producers in US graphite supply chains. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iie:pbrief:pb24-5 |
| By: | Hafner-Burton, Emilie M; Schneider, Christina J |
| Abstract: | Recent years have witnessed significant democratic backsliding. Many democracies around the world experience incremental deteriorations of democratic institutions, rules, and norms resulting from the actions of duly elected governments, but we still know little about how backsliding is affected by international integration. We argue that integration of countries into the U.S.-led Liberal International Order (LIO) after the end of the Cold War has provided aspiring autocrats in office with tools, resources, and political support to pursue strategies of incremental executive aggrandizement. Our theory implies that integration has increased the likelihood of democratic backsliding, especially in regimes where anti-pluralist forces are able to capture international integration for their own purposes. We test the empirical implications of our theory with a mixed-methods approach that combines a large-n quantitative comparative analysis of democratic backsliding in 97 democracies after the Cold War with a typical case study to trace the underlying causal mechanisms of the theory. The findings indicate that international economic and political integration have had a robust positive effect on the likelihood of democratic backsliding in a broad range of contexts and that the hypothesized mechanisms are observable in the detailed case study. These findings have important implications for democracy in an integrated world. |
| Keywords: | Social and Behavioral Sciences, democratic backsliding, liberal international order, international integration |
| Date: | 2023–07–12 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:globco:qt0965w1jb |
| By: | Popov, Vladimir |
| Abstract: | China was extremely successful in recent decades in managing external equilibrium in the short and medium term using three mechanisms to cushion the balance of payments shocks. First, it maintained a flexible rate, so could adjust to the fluctuations in trade balance and capital flows via devaluation/appreciation of national currency. Second, it exercised a capital account control that prevented the sudden and sizeable outflow of capital. And third, its foreign exchange reserves were the largest in the world and large even as compared to its GDP and foreign trade and capital flows, so they could have been used to absorb negative trade and capital account shocks with full sterilization (without a fear of continuous outflow of capital due to capital control). In particular, China survived the Asian currency crisis of 1997 better than the other countries – its reserves even did not decrease in 1997 and its GDP growth rates virtually did not decline. However, in the long term the abandonment of the policy of foreign exchange reserves accumulation (since the Great Recession of 2008-09) led to the considerable appreciation of the real exchange rate of yuan, the decline in the ratio of export to GDP and the share of investment in GDP. The result was the slowdown of growth: GDP growth rates fell from 14% in 2007 to 5% in 2024. |
| Keywords: | balance of payments, foreign exchange reserves, external and internal equilibrium, exchange rate, slowdown of growth in China |
| JEL: | F31 F32 F41 N15 O24 O40 |
| Date: | 2024–08–02 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121627 |
| By: | Bachmann, Rüdiger; Baqaee, David Rezza; Bayer, Christian; Kuhn, Moritz; Löschel, Andreas; Moll, Ben; Peichl, Andreas; Pittel, Karen; Schularick, Moritz |
| Abstract: | This paper discusses the economic effects of a potential cut-off of the German economy from Russian energy imports. We use a multi-sector open-economy model and a simplified approach based on an aggregate production function to estimate the effects of a shock to energy inputs. We show that the effects are likely to be substantial but manageable because of substitution of energy imports and reallocation along the production chain. In the short run, a stop of Russian energy imports would lead to an output loss relative to the baseline situation, without the energy cut-off, in the range 0.5% to 3% of GDP. |
| Keywords: | Wiley deal |
| JEL: | J1 |
| Date: | 2024–07–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124094 |
| By: | Klingebiel, Stephan; Baumann, Max-Otto |
| Abstract: | A second presidential term for Donald Trump would undoubtedly have huge impacts on topics in all areas of international relations - topics that are intrinsically relevant to all actors due to the status of the United States as a world power. Trump's political agenda differs considerably from that of earlier Republican U.S. presidents. His populism has forced con-servative internationalism to revert to isolationism. We set out five brief analyses to shed light on areas of activity that are of major importance for global sustainable development and for the Global South: (i) basic features of the international system and the multilateral order, (ii) the United Nations (UN), (iii) international climate policy, (iv) development policy and (v) policy on Africa. These areas each have their own particular dynamics. At the same time, they need to be seen as part of an international order that is currently experiencing upheaval. A similar pattern is likely to be observed in all of these areas: withdrawal from multilateral arrangements and in some cases deliberate steps to undermine them; reduction or termination of financial contributions in areas in which U.S. interests do not appear to be directly involved. Moreover, in some individual cases, Trump is likely (once again) to seek confrontation in multilateral forums with China and other states regarded by him as undesirable. All of this will affect European interests. Firstly, Trump is likely to have an impact on the international community's ability to solve problems, for example in achieving the Sustainable Development Goals and combating climate change. Secondly, if the United States were to withdraw in many areas, this would in all likelihood create opportunities for China, Russia and their allies to exert greater influence. Under 'Trump 2.0', the United States would presumably once again be a principal disruptor of the liberal world order. In the wake of radical global changes (growing importance of China and other actors in the Global South, etc.), a chain of disruptions triggered by the United States is likely to have serious direct and indirect repercussions (functioning of international organisations; pressure to increase the defence budgets of European countries, etc.). While Trump is a driver of structural change in international politics, Biden's re-election would be likely to act as a firewall for a while. Yet Biden might also prove to be a weak partner in managing upheaval in the world order. Regardless of the outcome of the U.S. presidential elections, European actors need to future-proof their policies for a new geopolitical era. For actors interested in an effective multilateral order, one approach to international politics that they could adopt would involve forging or harnessing alliances that can hold up in the face of U.S. government action. In principle, it would probably be advantageous to focus more on 'mixed alliances' of countries with different identities ('western', 'Global South', regional attributes, etc.). As recent years have shown, a resurgence of a bloc-based mindset and respective practices poses risks for joint approaches, for example in identifying progress in the field of international climate policy. Exemplary approaches may include transnational urban climate alliances and the Bridgetown Initiative for the reform of the international financial architecture. |
| Keywords: | USA, Donald Trump, populism, United Nations, development policy, Africa, international relations, global governance, multilateralism, China |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:idospb:300630 |
| By: | Réka Juhász; Shogo Sakabe; David Weinstein |
| Abstract: | This paper studies technology absorption worldwide in the late nineteenth century. We construct several novel datasets to test the idea that the codification of technical knowledge in the vernacular was necessary for countries to absorb the technologies of the Industrial Revolution. We find that comparative advantage shifted to industries that could benefit from patents only in countries and colonies that had access to codified technical knowledge but not in other regions. Using the rapid and unprecedented codification of technical knowledge in Meiji Japan as a natural experiment, we show that this pattern appeared in Japan only after the Japanese government codified as much technical knowledge as what was available in Germany in 1870. Our findings shed new light on the frictions associated with technology diffusion and offer a novel take on why Meiji Japan was unique among non-Western countries in successfully industrializing during the first wave of globalization. |
| JEL: | F14 F63 N15 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32667 |
| By: | Christian Vedel (University of Southern Denmark) |
| Abstract: | Is geography destiny? What is the role of first-nature geography in determining prosperity? This paper estimates the effect of randomly removing and introducing favorable first-nature geography to a specific region using a difference in difference design. In 1825 a storm created a new natural navigable waterway, bringing trade and prosperity to the otherwise relatively isolated northwestern Denmark. 700 years prior, the same event happened in reverse, when a previous channel closed up between 1086 and 1208. The elasticity of geography-induced market access is estimated to be 1.6, corresponding to 26.7 percent population growth within a generation of the event. Demonstrated mechanisms include trade, fertility, fishing, and the rise of manufacturing. The central finding is replicated in reverse in a register of dated archaeological sites. The 1086-1208 closing caused fewer buildings and sites containing coins. The general insight is the same: First-nature geography determines the levels and location of prosperity. |
| Keywords: | First-nature, Trade, Geography, Infrastructure, Natural Experiment |
| JEL: | N01 N73 O18 R1 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:hes:wpaper:0262 |
| By: | Carry, Inga |
| Abstract: | The European Union (EU) is aiming to strengthen its cooperation with like-minded countries to secure its supply of so-called critical raw materials. European Commission President Ursula von der Leyen considers Canada a "perfect match" - a resource-rich and reliable partner that shares the EU's geopolitical interests and sustainability goals. Canada is seeking to diversify its supply chains and counteract the influence of Chinese actors in its mining industry through a policy of friendshoring. To this end, the Canadian government has shown itself to be far more open to cooperation with the EU regarding raw material supply chains and key industries compared to the United States (US) government. It would be beneficial for both sides to deepen this cooperation. However, to truly make this partnership a perfect match, the EU should offer stronger financial incentives for the integration of European and Canadian industries, promote scientific exchange and technical collaboration, and advocate for robust corporate due diligence in supply chains. |
| Keywords: | Kritische Rohstoffe, Strategische Rohstoffe, Lithium, Graphit, Nickel, Kobalt, Kupfer, Seltene Erden, Kathodenaktivmaterial, CAD, Critical Raw Materials Act, CRMA, Manitoba, Saskatoon, Saskatchewan, Yukon, Ring of Fire, ESG, ESG+1, Mineral Security Partnership, MSP, Benefits-Sharing Framework, EU Corporate Sustainability Due Diligence Directive, CSDDD, Canada, EU, European-Canadian raw materials partnership, raw material supply chains, Critical Raw Materials Act, CRMA, Canada's critical raw materials strategy, mineral and metallic raw materials, rare earth elements, REE, mining industry, decoupling, ESG, sustainability standards, Indigenous peoples |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:swpcom:300625 |
| By: | Goeb, Joseph; San, Cho Cho; Belton, Ben; Synt, Nang Lun Kham; Aung, Nilar; Maredia, Mywish; Minten, Bart |
| Abstract: | Myanmar has experienced a sequence of dire crises beginning in 2019 including the unexpected closure of a principal trade route, COVID-19 lockdowns and travel restrictions, and a military coup leading to years of disruptions in the banking and transport sectors, inflation, and conflict. Yet, through these cascading shocks Myanmar’s maize sector experienced robust growth in production and exports. This paper examines the reasons underlying this apparent paradox and our findings contribute to the small but growing literatures on agri-food value chain (AVC) resilience and adaptation by traders. Strengthening the resilience of AVCs to shocks has important implications for welfare in developing countries and is increasingly drawing attention from policymakers and development partners. Using data from several sources including rare panel data sets of traders and farmers, and key informant interviews, we show that crop traders have been critical to the resilience of the maize value chain in Myanmar during this turbulent period. Maize traders performed three key functions contributing to resilience: (i) market discovery when primary trade routes were closed; (ii) overcoming transportation disruptions and bank closures to move maize from the farmgate to local and export markets; (iii) maintaining flows of credit to farmers throughout the crises in the form of selling inputs on credit and lending cash, thereby injecting much needed liquidity at times of incredible uncertainty, disruptions in the banking sector, and rising input prices. |
| Keywords: | Agribusiness, Agricultural and Food Policy |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344306 |