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on International Trade |
| By: | Borchert, Lea; de Haas, Ralph; Kirschenmann, Karolin; Schultz, Alison |
| Abstract: | We study how terminated correspondent banking relationships affect international trade. Drawing on firm-level export data from emerging Europe, we show that when local banks lose access to correspondent services, their corporate clients experience significant export declines. This trade contraction occurs on both the extensive margin, with fewer firms exporting, and the intensive margin, with existing exporters shipping lower values. Firms only partially offset lost exports with higher domestic sales, resulting in lower total revenues and employment. Other firms cease operations entirely. These firmlevel impacts aggregate to lower industry-level exports in countries more exposed to correspondent bank retrenchment. |
| Keywords: | Correspondent banking, trade finance, de-risking, global banks, international trade, anti-money laundering |
| JEL: | F14 F15 F36 G21 G28 L14 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bofitp:304397 |
| By: | FUJII Daisuke |
| Abstract: | Recent events of the Russian invasion of Ukraine and the US-China decoupling have shown that key trade policies today are shaped by geopolitical risks and economic security concerns. In Japan, economic security in increasingly complex global supply chains is also being discussed as an important policy theme, though quantitative evidence remains scarce. This paper aims to quantify the impact of trade disruptions with China on the Japanese economy. To do so, I develop a general equilibrium model of production networks with international trade, which incorporates non-unitary elasticity of substitution across intermediate inputs. The model is calibrated using large-scale firm-level network data from Japan. The aggregate impact of trade disruption is substantial in the short run but becomes milder in the long run. If both exports and imports with China decline by 90%, real GDP is projected to drop by 7% within a year. Additionally, import disruptions cause more severe damage than export disruptions. There is significant sectoral heterogeneity in the negative impact of trade disruptions, depending on sectoral exposure to trade, the share of intermediate inputs, and position within production networks. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:24073 |
| By: | Thais Nuñez-Rocha (LEO - Laboratoire d'Économie d'Orleans [2022-...] - UO - Université d'Orléans - UT - Université de Tours - UCA - Université Clermont Auvergne); Inmaculada Martinez Zarzoso Zaki (Georg-August-University = Georg-August-Universität Göttingen, Universitat Jaume I = Jaume I University); Chahir Zaki (LEO - Laboratoire d'Économie d'Orleans [2022-...] - UO - Université d'Orléans - UT - Université de Tours - UCA - Université Clermont Auvergne) |
| Abstract: | The purpose of this paper is to examine how stringent environmental regulations affect international trade flows. We show that national environmental legislation reinforces the impact on trade of environmental provisions in deep trade agreements. |
| Keywords: | International trade environmental regulations environmental provisions in trade agreements F18 K32, International trade, environmental regulations, environmental provisions in trade agreements F18, K32 |
| Date: | 2023–03–30 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04731483 |
| By: | TAKEDA Shiro; HIGASHIDA Keisaku; YOMOGIDA Morihiro |
| Abstract: | Using a simple static computable general equilibrium model, we quantitatively examine the impact of trade restrictions between China and Japan on gross domestic product (GDP) and welfare in both countries. Furthermore, we examine trade flows not only between these two countries, but also between Japan and its other trading partners. We examine export and import quotas’ long-run effect (large elasticity of substitution (EOS)) and short-run effect (small EOS) as trade restrictions. When trade restrictions are imposed on manufacturing sectors, we find that regardless of the type of restriction, trade restrictions in either country negatively affect its own GDP. However, because of improvement in terms of trade, the welfare of a country imposing the restriction may increase. We also examine the short-run and long-run impacts of unilateral export restrictions on the ELE (computer, electronic, and optical products) sector, which includes semiconductors. Japan benefits less from its own export restrictions against China than China does from its export restriction against Japan. China can increase its GDP by imposing export restrictions on Japan, whereas Japan cannot. In response to China’s export restrictions on Japan, the country increases imports from both major and minor trading partners. This suggests Japan should broaden its import sources to include minor trade partners. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:24072 |
| By: | Elhoussaine Wahyana; Eduardo Amaral Haddad |
| Abstract: | The debate on global value chains (GVCs) has emphasized countries’ contributions to value-added creation. From an intercountry perspective, a new body of research is addingto this debate by studying how subnational regions contribute to the indicators in specific countries. Proper assessment of economic contributions is essential for designing incentive policies. This paper analyzes the role played by the main trading partners of Moroccan regions in local value chains. We use input-output (IO) analysis to decompose regional value-added in Morocco, based on different sources of domestic and foreign final demand, taking into account the differences in regional economic structures and the nature of systematic interdependence associated with the structure of inter-regional linkages in Morocco. For each final demand originating from and into one of the Moroccan regions, we estimate measures of trade in value-added (TiVA). The output decomposition of final demand into domestic and foreign demand, where the latter is broken down into the final demand from each trading partner, serves as the methodological anchor for the study. We use the inter-regional input-output table for Morocco with 2019 data. The measures of trade in value-added reveal different inter-regional and international trade integration hierarchies, with implications for regional inequality in the country. We try to answer two main questions. First, how do domestic absorption and foreign exports affect value-added generation in Moroccan regions? Second, what is the regional value-added content incorporated in the components of final demand by geographical source? |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rtrade:rp_01-24 |
| By: | Daria Suprunenko |
| Abstract: | While significant attention has been dedicated to sanctions episodes among major economies which usually rely on a diverse set of trade partners, little is known about the impact of sanctions imposed by senders on economies highly dependent on them. Using Ukrainian export data for 2009–2019 at product level, I study the effects of trade restrictions imposed by the Russian Federation against Ukraine since 2016 accounting for the impact of Russian occupation and destruction of productive capacities. I find no evidence for evasion of Russian trade policy measures via export to other members of the Eurasian Economic Union or product misclassification, instead trade flows were redirected to new destinations. Industries with higher exposure to Russian market experienced significant reductions in employment, number of enterprises and turnover when targeted by embargo. |
| Keywords: | Ukraine, Russia, sanctions, trade war |
| JEL: | F13 F14 |
| Date: | 2024–10–21 |
| URL: | https://d.repec.org/n?u=RePEc:iee:wpaper:wp0124 |
| By: | Andreas Baur |
| Abstract: | The global economic environment has changed fundamentally over the past decade. Growing protectionism and geoeconomic tensions pose a major challenge, especially for the EU, whose foundations are based on openness, multilateralism, and cooperation. This policy brief presents four basic propositions on the future direction of the EU's foreign economic policy. In addition to the security implications of economic interdependence, it discusses the role of firms in shaping resilient supply chains, the case for industrial policy in strengthening economic security, and the importance of European unity for geoeconomic competition. Key Messages Growing protectionism and geoeconomic tensions in the global economic environment pose major challenges, especially for the EU. International trade with countries outside Europe is a key factor for European prosperity. In the EU alone, 32 percent of manufacturing jobs and 36 percent of value-added in manufacturing depend on exports to non-member countries. In terms of economic security, the approach of targeted de-risking is generally pointing in the right direction. The focus should be on reducing dependencies in critical areas, not on cutting trade relations per se. Intensifying international trade, rather than protecting domestic production, is often the key to strengthening economic security. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:econpb:_63 |
| By: | Pierre Cotterlaz; Guillaume Gaulier; Aude Sztulmac; Deniz Ünal |
| Abstract: | International trade in healthcare products took off in the 2000s at the height of hyper-globalisation. Twenty years on, the Covid-19 shock drove home to governments the importance of health security and placed the spotlight on the industrial sovereignty issues raised by the international organisation of production. However, the tangled web of international value chains has compromised the traceability of the manufacturing of these essential goods. In addition, the classification of healthcare products across a multitude of industries in the trade and production nomenclatures makes them hard to identify and muddies the picture further. In this paper, we have painstakingly identified these products and classified them together in one industry grouping to assess the scale of and trends in trade to meet the needs of national health systems. Covering a vast range of products (medicinal products and their compounds, medical technology equipment and small medical materials), this healthcare industry grouping has posted the strongest relative growth since 2000, rising to the second highest share of world trade in 2021, just behind electronic products, now equalling or even just above the share of transport equipment. This paper details the nature of world trade in the healthcare industry grouping and its five branches by production stage (intermediate and final), type of trade flows (one-way and two-way) and quality/price range. It goes on to present how the advanced countries are positioned compared with the rest of the world. |
| Keywords: | Health Products, International Trade, Advanced Economies, Emerging and Developing Economies |
| JEL: | F13 F14 F15 I11 L65 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:banfra:963 |
| By: | Abdul Majeed Seidu; Aleksandar Vasilev |
| Abstract: | The study sought to analyse the impact of trade liberalisation on Ghana’s agricultural sector. This study's research design, which is secondary quantitative, was chosen. The study used econometric methods such as multivariate regression analysis, Bounds test etc to analyse the data. According to the study's findings, trade liberalisation which comprises of flexible exchange rate (REXR), Export and Import price ratio (EP/IP), Agricultural Capital Formation (ACF), Foreign Investment in Agricultural Sector (FIA) and Agricultural Degree of Openness (ADO) haven’t really improved agricultural performance in Ghana from 1993-2022. In contrast, globalisation has favourably impacted technology, infrastructural development, growth, and living standards in other developing Asian nations including India, China, Lebanon etc. through the promotion of foreign direct investments (Siddiqui and Ahmed, 2017). Due to the limited absorption of technology, poor infrastructure and overdependence on other countries in Ghana, globalisation may not have an impact on sustainable agriculture. The negative interactions between Ghanaian Agricultural performance, Agricultural exports and imports price ratio, Real Exchange Rate, might have accounted for Ghana’s continuous decline in agriculture performance instead of having a positive impact. |
| Keywords: | agriculture, trade liberalisation, real exchange rate |
| JEL: | F10 |
| Date: | 2024–10–10 |
| URL: | https://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2024_06 |
| By: | Hinh T. Dinh |
| Abstract: | President Biden's announcement of new tariffs on China, though not economically significant on its own, symbolizes the deepening decoupling of the U.S. and Chinese economies. These tariffs, supported by both major political parties, represent the latest step in a broader strategy that favors policy interventions over traditional free-market principles and aims to protect domestic workers, maintain technological leadership, and prioritize economic security. This policy brief discusses the factors behind this shift in U.S. economic policy, including the experiences from the first and second China shocks. This shift, along with China's subsequent export policy reactions, will have important implications for the trade policies of developing countries. |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rtrade:pb_28_24 |
| By: | Ricardo Chiapin Pechansky; Michel Lioussis |
| Abstract: | This guide presents the Trade in Employment by workforce characteristics (TiMBC) database developed by the OECD to help inform cross-country, cross-industry discussions of issues such as gender and trade, skills and global value chains (GVCs), and the economic effects of an ageing population. It is an extension of the Trade in Employment (TiM) database, whereby indicators that provide insights into the different relations between GVC integration and employment by industry are further decomposed by workforce characteristics - namely age, gender, occupation, and education. To achieve this, statistics on employment by workforce characteristics, mainly Labour Force Surveys (LFS), are combined with existing TiM indicators. These novel indicators by workforce characteristics cover 43 countries and 12 unique industries, for the period 2008 to 2018. This guide presents the database, the sources and methods used, and a brief analysis showcasing indicators. |
| Keywords: | Employment, Global Value Chains, Workforce |
| Date: | 2024–10–24 |
| URL: | https://d.repec.org/n?u=RePEc:oec:stiaaa:2024/08-en |
| By: | Panon, Ludovic; Lebastard, Laura; Mancini, Michele; Borin, Alessandro; Essers, Dennis; Linarello, Andrea; Caka, Peonare; Cariola, Gianmarco; Gentili, Elena; Padellini, Tullia; Requena, Francisco; Timini, Jacopo |
| Abstract: | We study how disruptions to the supply of foreign critical inputs (FCIs) —that is, inputs primarily sourced from extra-EU countries with highly concentrated supply, advanced technology products, or which are key to the green transition —might affect value added at different levels of aggregation. Using firm-level customs and balance sheet data for Belgium, France, Italy, Slovenia and Spain, our framework allows us to assess how much geoeconomic fragmentation might affect European economies differently. Our baseline calibration suggests that a 50% reduction in imports of FCIs from China and other countries with similar geopolitical orientations would result in sizable losses of value added with significant heterogeneity across firms, sectors, regions and countries, driven by the heterogeneous exposure of firms. Our findings show that the short-term costs of supply disruptions of FCIs can be substantial, especially if firms cannot easily switch away from these inputs. JEL Classification: F10, F14, F50, F60 |
| Keywords: | geoeconomic fragmentation, global sourcing, global value chains, imported inputs, international trade |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20242992 |
| By: | Norring, Anni |
| Abstract: | First signs of headwinds to the global economy from geoeconomic fragmentation are emerging. This paper takes an overview on what is the current understanding of the economic effects of geoeconomic fragmentation. The estimated and modelled economic effects of geoeconomic fragmentation and geopolitics vary substantially. We need more research, standardized measures of geopolitical uncertainty, detailed data on protectionist measures and global value networks, plausible scenarios rooted in stylized facts and realistic models anchored in theory. |
| Keywords: | geoeconomic fragmentation, globalization, trade, technology diffusion |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bofitb:304310 |
| By: | O'Grady, Michael (Central Bank of Ireland) |
| Abstract: | Foreign MNE affiliates generate and contribute markedly to Irish output, value added, exports, imports and employment, while the majority of corporation tax derives directly from the income of multi-national firms. To better understand the effects of multinational firms in the Irish economy, this paper analyzes the linkages of MNE affiliates in the domestic supply chain. To do so, we construct original symmetric input-output tables at the NACE sector level, extended across ownership structures, with the distortionary effects of globalisation-related activities removed from the data. Using these tables, we estimate a range of analytical measures to determine the strength and direction of economic interconnections across the domestic supply chain, identify the indigenous and MNE controlled sectors whose economic activity exerts the greatest influence on the domestic economy, and estimate which sectors likely benefit most from technological innovation / increased production efficiency at an aggregate level. |
| Keywords: | FDI, Multi-National Enterprises, I-O Tables, Network Analysis. |
| JEL: | G15 G01 C34 G23 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cbi:wpaper:5/rt/24 |
| By: | Otaviano Canuto; Mahmoud Arbouch; Pepe Zhang; Abdelaaziz Ait Ali |
| Abstract: | The COVID-19 pandemic and the war in Ukraine have reignited the debate on efficiency versus resilience in international trade and global value chains (GVCs). This policy brief [a] (i) explains the contrasting perspectives of the private sector (primarily seeking efficiency) and the public sector (aiming for resilience); (ii) demonstrates that GVCs are still flourishing, despite some mounting signals of a geo-fragmentation leading to greater reallocation of the GVCs; and (iii) provides recommendations to help the G20 navigate the balancing act between efficiency and resilience considerations. Domestic policy design in the G20 countries and international coordination among these countries is essential. |
| Date: | 2023–06 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rtrade:t20_pb_tf-1_12 |
| By: | Boehm, Christoph E. (University of Texas at Austin, NBER); Andrei A. Levchenko (University of Michigan, NBER, & CEPR); Nitya Pandalai-Nayar (University of Texas at Austin, NBER); Hiroshi Toma (University of Michigan) |
| Abstract: | Yes. We state closed-form expressions for steady state gains from trade that apply in a class of dynamic trade models that includes dynamic versions of the Krugman (1980), Melitz (2003), and customer capital (e.g., Arkolakis, 2010) models. The gains are a function of the domestic trade share and the long-run elasticity of trade with respect to iceberg trade costs, similar to Arkolakis, Costinot, and Rodr’guez-Clare (2012). In contrast to static settings, in a dynamic world this longrun elasticity cannot be estimated in one step by relying on tariff variation as shifters of trade costs. We show, instead, that this object can be recovered by combining two tariff elasticity estimates: the long- and the short-run. Thus, the short-run tariff elasticity indirectly enters the formula for the steady state gains from trade. Our main substantive finding is that the gains from trade are large. They depend crucially on the short-run tariff elasticity, and can be arbitrarily large even if the long-run tariff elasticity is high. Accounting for the transition path has a minor impact on the magnitude of the gains from trade, relative to simply comparing steady states. |
| Keywords: | Dynamic Gains from Trade, Trade Elasticities, Sufficient Statistics |
| JEL: | F12 F15 F62 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:mie:wpaper:688 |
| By: | Erez Z. Shoshani (Ruppin Academic Center) |
| Abstract: | Since 2020 we have seen major fluctuations in globalization processes, especially in its economic dimension. The pandemic followed by the outbreak of the war in Ukraine, escalating violence in the Middle East, and rising regional tensions in other parts of the world influenced trade levels particularly of merchandise. Although the World Trade Organization forecasts a recovery in the near future it also issues a warning that the continuation of international conflicts may disrupt growth.This study will analyze current changes in the international system and their relation to different globalization processes outcomes. Furthermore it will aim at describing a potential formation of a more stable global system, albeit the existing international security situation. Such a system formation is conditioned upon certain international normative processes that will be reviewed. |
| Keywords: | Globalization, International security, Normative changes |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:sek:iacpro:14816411 |
| By: | Hinh T. Dinh |
| Abstract: | This paper examines the implications of the U.S.-China trade war for developing countries, particularly in light of the 2024 U.S. presidential election. The study traces the origins and escalation of the trade conflict, analyzing its multiple impacts on global trade patterns and economic growth. While some developing countries have benefited from trade diversion and supply-chain shifts, others, especially resource-exporting nations and the least-developed countries, have faced significant challenges. The paper presents data showing that almost every country group, except OECD countries, has experienced a decline in its trade-to-GDP ratio in the wake of the trade war, with heavily indebted poor countries and least-developed nations suffering the most. The paper outlines three potential scenarios based on the outcome of the U.S. election: a shift towards reconciliation, continuation of current trends, or increased protectionism. Each scenario presents unique challenges and opportunities for developing countries. The study also explores the concept of ‘friend-shoring’ and its potential impact on Africa, highlighting the continent's notable absence from major friend-shoring initiatives, and the risks this poses to its economic prospects. In response to these challenges, the paper proposes a range of strategies for developing countries, including regional integration, South-South cooperation, strategic protectionism, economic diversification, and investment in education and innovation. The paper concludes by emphasizing the need for developing countries to remain agile in the face of uncertainty, balancing strategic autonomy with productive engagement in the global economy. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rtrade:pp_14-24 |
| By: | Otaviano Canuto |
| Abstract: | Multiple shocks faced by the global economy over the past three years have apparently shaken the conventional wisdom on gains from economic integration, and have sparked widespread calls for protectionist and nationalist policies. Is there already evidence of some ‘deglobalization’, or do the factors that underlie globalization remain strong enough despite the shocks? So far, there are no signs of an overall reversal in the long-term trend of greater global trade integration. However, a partial realignment seems to be underway, reflecting the more durable side of those recent shocks. This is probably leading to higher costs and prices on the margin, in the case of realignments done to overcome shocks of a geopolitical nature. The answer seems to be that global trade has been resilient, although it is undergoing some realignment. |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbtrad:pb_44_23 |
| By: | Paúl Elguezabal (University of Goettingen); Inmaculada Martínez-Zarzoso (University of Goettingen & University of Goettingen) |
| Abstract: | This paper evaluates the impact of regularisation programs on immigration flows using a newly collected dataset and panel-data techniques applied to gravity models. The main novelty is twofold. First to present the dataset with detailed information on regularisation policies in OECD countries, including those implemented over the period from 1944 to 2023 and specifying the timeframe of implementation and the origin nationalities targeted. And second, to estimate the impact with a gravity model of bilateral migration applying a Poisson pseudo maximum likelihood estimator for an unbalanced panel of 193 origins and 32 OECD destinations for 199-2022. The main results indicate that the regularisation impact is very heterogeneous across geographical regions of incoming migrants and across groups of countries depending on their level of development. In particular, the results indicate that regularisation programs are a pull factor for lower-income OECD destinations. |
| Keywords: | Migration, regularisation, policy evaluation, income and regional heterogeneity |
| JEL: | F |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:inf:wpaper:2024.14 |
| By: | Otaviano Canuto; Sandra Rios; Renato Baumann; Abdelaaziz Ait Ali; Mahmoud Arbouch |
| Abstract: | This paper was originally published on t20brasil.org The resurgence of Neo protectionism as a reality is creating a pressing need to establish New Industrial Policies (NIPs) capable of striking a balance between Global Value Chains (GVC) managers' quest for efficiency and policy makers' need for more increasing resilience or national security in a turmoiled geopolitical landscape. Furthermore, although NIPs might pursue legitimate non-economic objectives, they are often captured by vested interests, resulting in protectionist measures. These policies produce negative spillovers, jeopardizing other countries’ development perspectives. This policy brief posits that countries embracing industrial policies with trade diversion components must allocate efforts to implement additional trade liberalization in sectors where the affected exporting countries have comparative advantages as compensation for the negative spillovers their unilateral domestic policies impose on third countries. This highlights the need to establish a structured system that penalizes protectionist countries for exceeding predetermined limits on subsidies and distortive measures. This policy brief also recommends that advanced economies implementing industrial policies with high amounts of embodied subsidies contribute to an international fund dedicated to financing developing economies' access to new green technologies. This approach acknowledges the undeniable push towards aggressive industrial policies, yet simultaneously strives to establish a framework to temper this emerging trend. This mechanism aligns with the principles of economic fairness and encourages nations to adopt less distortive behaviors in their pursuit of economic security or resilience to shocks. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbtrad:tf04_st_06 |
| By: | Abdelmonim AMACHRAA |
| Abstract: | Nothing better illustrates the positive contribution of the integration of national economies into global value chains than the fact that in the 1990s, the automotive sector barely existed in Morocco. Now, it is the leading export sector, with a production and assembly capacity of 700, 000 vehicles, making it an attractive and competitive hub linking Africa and Europe in the automotive value chain. However, the automotive industry is on the cusp of change, with advances in electric and autonomous vehicles, and transformations in mobility, lowering the barriers to entry in car assembly, and increasing the need for labor- intensive products such as wiring harnesses. We have identified two trends. First, vehicle manufacturers are engaging in the supply of raw materials. Second, the reorientation of investment flows and the organization of the location of production units will allow Western countries to reduce their dependence on foreign suppliers, particularly China. Upstream integration, semiconductors, clean energy, and batteries are at the center of decoupling negotiations. In an uncertain context, this research is intended to conceptualize an adaptive integration strategy for middle-income countries in global automotive value chains. |
| Date: | 2023–05 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpcoen:pp_09-23 |
| By: | Mina Baliamoune |
| Abstract: | Greater female participation in the labor market and in international trade have been recognized as important drivers for economic growth and essential targets in the context of the United Nations Sustainable Development Goals (SDGs). However, achieving both targets simultaneously will be difficult, if not impossible, in most Middle East and North African (MENA) countries without additional policies to eliminate the remarkably high levels of gender inequality in the labor market. In such countries, women are either excluded from the gains from trade or bear most of the burden of adjustment to greater integration in the global economy. Policymakers should recognize the impacts of greater integration into global trade on women’s labor-market outcomes, and should implement resolute policy measures to alleviate (if not eliminate) these impacts. |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbtrad:pb_06-24 |
| By: | Lehrer, Steven (Queen's University and NBER); Lepage, Louis-Pierre (Swedish Institute for Social Research); Sousa Pereira, Nuno (University of Porto) |
| Abstract: | We study how exposure of employers to immigrants, both at the market and at the individual firm level, mitigates immigrant-native disparities. We use administrative employee-employer matched data from Portugal, which provides a unique setting given that it experienced almost no immigration until the early 2000s followed by substantial immigration waves. Focusing on the evolution of market wages across successive immigration cohorts, we find that increased employer exposure to immigrant groups can account for up to 25% of the wage convergence between immigrants and natives over the last two decades. We also document that individual-level exposure of firms to immigrants plays an important role, influencing future hiring and remuneration of immigrants. Our results provide new insights into how barriers to hiring different worker groups shape economic inequality, with novel implications for integration policies. |
| Keywords: | immigration; immigrant-native wage gaps |
| JEL: | J15 J31 |
| Date: | 2024–03–01 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:sofile:2024_002 |
| By: | Zahniser, Steven; Zeng, Wendy; Dong, Fengxia; Ivanic, Maros; Husby, Megan; Pham, Xuan; Meade, Douglas |
| Abstract: | USDA’s Economic Research Service (ERS) produces the Agricultural Trade Multipliers (ATMs)—a data product that provides annual estimates of the economic output and number of jobs supported by U.S. agricultural trade, with detail for 124 product groups. The ATMs are a resource for government agencies, academics, and other stakeholders to estimate the effect that U.S. agricultural trade has on the farm and nonfarm sectors of the U.S. economy and the contribution of U.S. agricultural exports to employment and economic output. In 2021, ERS researchers overhauled the computer programming used to estimate the multipliers to implement an approach that was more streamlined and automated while retaining the structure of the existing model. This bulletin outlines the methodology used in the new programming to access the data needed to estimate the ATMs and to utilize that information to calculate the estimates. |
| Keywords: | International Relations/Trade, Labor and Human Capital, Research Methods/ Statistical Methods, Teaching/Communication/Extension/Profession |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ags:uerstb:347597 |
| By: | Gabriel Chodorow-Reich (Harvard and NBER); Matthew Smith (US Treasury Department); Owen Zidar (Princeton and NBER); Eric Zwick (Chicago Booth and NBER) |
| Abstract: | We evaluate the 2017 Tax Cuts and Jobs Act. Combining reduced-form estimates from tax data with a global investment model, we estimate responses, identify parameters, and conduct counterfactuals. Domestic investment of firms with the mean tax change increases 20% versus a no-change baseline. Due to novel foreign incentives, foreign capital of U.S. multinationals rises substantially. These incentives also boost domestic investment, indicating complementarity between domestic and foreign capital. In the model, the long-run effect on domestic capital in general equilibrium is 7% and the tax revenue feedback from growth offsets only 2p.p. of the direct cost of 41% of pre-TCJA corporate revenue. |
| JEL: | E23 F21 F23 H00 H25 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:pri:cepsud:328 |
| By: | Larabi Jaïdi; Bruce Byiers; Saloi El Yamani |
| Abstract: | As the African Continental Free Trade Area (AfCFTA) enters its fifth year, the rules of origin for trade in goods are still being finalised, but the institutional architecture is nearly complete with increased capacity, technical committees and new supporting instruments. Despite this progress in AfCFTA ‘policy supply’, meaningful trade under the AfCFTA is still to begin. For this to happen, there must be ‘policy demand’ from the private sector to use the agreement’s range of protocols in shaping their investment and trade decisions and relations. Private sector engagement has so far varied across member states, with some demonstrating robust integration of business feedback while others lag in private sector consultation and involvement. Recommendations focus on enhancing private sector engagement and thus the use and impact of the AfCFTA through: - Increased awareness and practical application of AfCFTA protocols. - Sector-specific support aligned with AfCFTA’s goals. - Strengthening the roles of AU, RECs and the AfCFTA secretariat in national strategy alignment. - Promoting regional value chains with strategic financing and partnerships. - Improving the investment climate to facilitate cross-border trade and investment. Ultimately, AfCFTA’s success depends on robust implementation, dynamic private sector involvement and tailored strategies to meet diverse economic needs across Africa. |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbtrad:afcfta_5_24 |
| By: | Bedoya, Fernando; Lassala, Belén |
| Abstract: | The implementation of the GloBE rules deriving from the OECD Inclusive Framework on Base Erosion and Profit Shifting can potentially impact investor's rights under international investment agreements, through the withdrawal of tax incentives. This Perspective identifies ways to limit States' exposure to investor-state dispute settlement. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:colfdi:303497 |
| By: | Aghion, Philippe; Bergeaud, Antonin; Lequien, Matthieu; Melitz, Marc J.; Zuber, Thomas |
| Abstract: | We decompose the “China shock” into two components that induce different adjustments for firms exposed to Chinese exports: an output shock affecting firms selling goods that compete with similar imported Chinese goods, and an input supply shock affecting firms using inputs similar to the imported Chinese goods. Combining French accounting, customs, and patent information at the firm level, we show that the output shock is detrimental to firms’ sales, employment, and innovation. Moreover, this negative impact is concentrated in low-productivity firms. On the other hand, the impact of the input supply shock is reversed. |
| JEL: | F3 G3 J1 |
| Date: | 2024–05–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:123934 |
| By: | Vasily Astrov; Feodora Teti; Lisa Scheckenhofer; Camille Semelet |
| Abstract: | This report highlights the effects of international sanctions on Russia's economic performance up to mid-2024. Despite monetary tightening, Russia's early 2024 economic growth remained strong due to a tight labor market and continued credit expansion. The fiscal outlook has improved with more positive short- and medium-term projections despite increased military and social spending. The trade surplus remained almost unchanged, masking declines in both exports and imports. Russian imports surged at the end of 2023 but have recently declined: Increased payment difficulties with third countries, exacerbated by recent U.S. executive orders, have suppressed imports despite strong domestic demand and the ruble's real effective appreciation since late 2023. In terms of trade of high-priority sanctioned products, an analysis of quantities and values traded reveals that Russia has shifted towards lower-quality suppliers from countries like China, Türkiye, and Kazakhstan. The sanctions' effectiveness thus largely depends on substituting high-quality Western goods with lower-quality alternatives. In 2023, Russia secured between 60% and 170% of sanctioned high-priority items compared to 2021 levels. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:econpr:_51 |
| By: | Elizabeth M. Jacobs (Max Planck Institute for Demographic Research, Rostock, Germany); Tom Theile (Max Planck Institute for Demographic Research, Rostock, Germany); Daniela Perrotta (Max Planck Institute for Demographic Research, Rostock, Germany); Xinyi Zhao (Max Planck Institute for Demographic Research, Rostock, Germany); Athina Anastasiadou (Max Planck Institute for Demographic Research, Rostock, Germany); Emilio Zagheni (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | This paper examines gender differentials in the international migration of professionals, and how this varies by country, industry, age, and years of experience. We leverage data from LinkedIn, the largest professional networking website, to construct immigrant and emigrant Gender Gap Indexes (iGGI and eGGI). These indexes measure inflows and openness to international relocation. The findings indicate that, among LinkedIn users, the global population of immigrant professionals is at gender parity. The professional migrant population is majority-female in key destination countries like the U.S., U.K., Australia and France, as well as emerging destination countries like South Korea and Singapore. Our results show that the mobility of women migrants is driven by industries like finance, healthcare and real estate. We find evidence of positive selection among women migrant professionals in key destination countries and industries. Our results indicate that men are more open to international relocation than women, suggesting that men express higher migration aspirations, but men and women have similar rates of observed mobility. The paper makes novel contributions to the literature on migration aspirations, behavior and selectivity. Methodologically, we develop a new data set and appropriate measures to complement existing sources to study professional migration across a wide range of countries. |
| JEL: | J1 Z0 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:dem:wpaper:wp-2024-037 |
| By: | Rim Berahab |
| Abstract: | The Carbon Border Adjustment Mechanism (CBAM) has emerged as an important policy tool in the European Union's (EU) efforts to combat climate change and prevent carbon leakage. By put ting a price on carbon emissions embedded in certain goods imported into the EU, the CBAM has the potential to impact economies worldwide, including Morocco. This policy brief examines recent CBAM developments and assesses their implications for Morocco's economy and climate change efforts. It analyzes the challenges that the Moroccan economy may face, including implications for costs , competitiveness, compliance requirements, supply chain adjustments, and increased risk exposure. The brief also highlights the opportunities available to Morocco, and the importance of implementing targeted policies, strengthening the regulatory framework, promoting capacity-building initiatives, and fostering cooperation to navigate the CBAM transition period effectively . By understanding the complexities of CBAM and adopting proactive strategies, Morocco can position itself to capitalize on the opportunities and overcome the challenges presented by this transformative policy. |
| Date: | 2023–07 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpcoen:pb_29_23 |
| By: | Clément Nedoncelle (UMR PSAE - Paris-Saclay Applied Economics - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Julien Wolfersberger (UMR PSAE - Paris-Saclay Applied Economics - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | In this paper, we study how weather shocks affect firm-level exports in low and middle income countries. While the impacts are negative on average, we find that large firms are significantly less affected. This feature is robust across sub-samples, specifications and confounding factors. We then examine the aggregate implications of these firm-level effects by studying changes in total exports under different climate scenarios by the end of the century. Results show that the overall trade-deterring effect of future weather conditions would be lower if there were more large firms in low and middle income countries. It suggests that the existing firm-size distribution may increase the aggregate cost of climate change. |
| Abstract: | Dans cet article, nous étudions comment les chocs climatiques affectent les exportations des entreprises dans les pays à revenu faible et intermédiaire. Même si les impacts sont en moyenne négatifs, on constate que les grandes entreprises sont nettement moins touchées. Cette fonctionnalité est robuste aux sous-échantillons, aux spécifications et aux facteurs de confusion. Nous examinons ensuite les implications globales de ces effets au niveau des entreprises en étudiant les changements dans les exportations totales selon différents scénarios climatiques d'ici la fin du siècle. Les résultats montrent que l'effet dissuasif global des conditions climatiques futures sur le commerce serait moindre s'il y avait davantage de grandes entreprises dans les pays à revenu faible ou intermédiaire. Cela suggère que la répartition actuelle par taille d'entreprise pourrait augmenter le coût global du changement climatique. |
| Keywords: | Climate change, Economic development, International trade, Firms Structure |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-03753384 |
| By: | André Brotto; Adam Jakubik; Roberta Piermartini; Fulvio Silvy |
| Abstract: | This paper studies the impact of the process of accession to the WTO on growth rates in a sample of 150 economies. Unlike GATT-era accessions, WTO accessions involve reforms that extend beyond conventional trade liberalization measures. Using information on the pace of negotiations and requests in the working party's meetings, we construct an index that tracks the progress of reforms in the pre-accession period. We estimate that economies that implemented reforms and made deeper commitments during their WTO accession negotiations grew on average 1.5 percentage points faster than they otherwise would have. These results are robust to instrumental variable estimation and falsification tests. |
| Keywords: | WTO accession; structural reforms; trade and growth |
| Date: | 2024–09–27 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/207 |
| By: | Rim Berahab |
| Abstract: | Green industrial policies are essential to enable the structural transformations needed for a successful transition to a low-carbon economy. Because of the pressing need to decouple economic growth from environmental degradation, it is imperative to reallocate resources strategically from carbon-intensive sectors to sustainable, high-productivity industries. This transition is critical both to mitigate the impacts of climate change and to promote long-term economic growth and sustainability. This paper examines Morocco’s green transition and identifies several key issues that must be addressed to ensure success. These include the need for a coherent institutional framework, the implementation of effective regulatory measures, and greater private-sector involvement. Furthermore, the analysis highlights the importance of regional collaboration, innovation, and research and development in overcoming challenges to a sustainable transition. It also analyses the European Union’s Carbon Border Adjustment Mechanism (CBAM) as a case study of how trade policies can be used to encourage decarbonization and align international trade practices with environmental objectives. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpcoen:pp_13-24 |
| By: | Christopher J. Neely |
| Abstract: | This article examines the likely economic effects of a Chinese invasion or blockade of Taiwan for the U.S. and the world by considering historical precedents. Such a conflict would likely produce a flight-to-safety in the asset market, huge disruptions in international trade, banking problems, and would greatly exacerbate existing fiscal pressures. The authorities of the People’s Republic of China would probably try to sell U.S. and other western securities prior to a conflict to avoid sanctions on those assets. Such sales would be temporarily disruptive but would likely have only marginal effects on yields in the longer term. Long-term effects would include disrupted trade, higher price levels, higher levels of nominal debt and higher taxes. |
| Keywords: | war; Taiwan; foreign exchange reserves; asset prices; flight-to-safety; international trade; sanctions |
| JEL: | H56 F40 O24 G14 G15 G12 |
| Date: | 2024–09–27 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedlwp:98963 |
| By: | Bryan Hardy; Felipe Saffie; Ina Simonovska |
| Abstract: | Large firms borrow in foreign currency and are net providers of trade credit to firms in their supply chains. We model the transmission of exchange rate risk via firm balance sheets along the supply chain. Trade credit loosens borrowing constraints and allows for higher production. Furthermore, firms are more likely to pass-through exchange rate shocks to their balance sheets onto their partners the more they are financially constrained. We validate these predictions using a quarterly firm panel for 19 emerging markets. Trade credit constitutes an important transmission mechanism of exchange rate shocks, but firms tend to protect their trading partners. |
| Keywords: | trade credit, financial constraints, supply chains, exchange rate volatility, imperfect pass through |
| JEL: | E32 G21 G32 F31 F34 |
| URL: | https://d.repec.org/n?u=RePEc:bis:biswps:1216 |
| By: | Mr. Philippe Wingender; Jiaxiong Yao; Robert Zymek; Benjamin Carton; Mr. Diego A. Cerdeiro; Miss Anke Weber |
| Abstract: | European countries have set ambitious goals to reduce their carbon emissions. These goals include a transition to electric vehicles (EVs)—a sector that China increasingly dominates globally—which could reduce the demand for Europe’s large and interconnected auto sector. This paper aims to size up the tradeoffs between Europe’s shift towards EVs and key macroeconomic outcomes, and analyze which policies may sharpen or ease them. Using state-of-the-art macroeconomic and trade models we analyze a scenario in which the share of Chinese cars in EU purchases rises by 15 percent over 5 years as a result of both a positive productivity shock for car production in China and a demand shock that shifts consumer preferences towards Chinese cars (given China’s dominance in the EV sector). We find that for the EU as a whole, the GDP cost of this shift is small in the short term, in the range of 0.2-0.3 percent of GDP, and close to zero over the long term. Adverse short-run effects are more significant for smaller economies heavily reliant on the car sector, mainly in Central Europe. Protectionist policies, such as tariffs on Chinese EVs, would raise the GDP cost of the EV transition. A further increase in Chinese FDI inflows that results in a significant share of Chinese EVs being produced in Central European economies, on the other hand, would offset losses in these economies by supporting their shift from supplying the internal combustion engine (ICE) production chain to that of EVs. |
| Keywords: | Electric vehicles; green transition; trade; tariffs; global value chains. |
| Date: | 2024–10–11 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/218 |
| By: | Pellegrino, Bruno; Spolaore, Enrico; Wacziarg, Romain |
| Abstract: | Observed international investment positions and cross-country heterogeneity in rates of return to capital are hard to reconcile with frictionless capital markets. In this paper, we develop a theory of international capital allocation: a multi-country dynamic spatial general equilibrium model in which the entire network of cross-border investment is endogenously determined. Our model features cross-country heterogeneity in fundamental risk, a demand system for international assets, and frictions that cause segmentation in international capital markets. We measure frictions affecting international investment and apply our model to data from nearly 100 countries, using a new dataset of international capital taxes and cultural, geographic and linguistic distances between countries (geopoliticaldistance.org). Our model performs well in reproducing the composition of international portfolios, the cross-section of home bias and rates of return to capital, and other key features of international capital markets. Finally, we carry out counterfactual exercises: we show that barriers to international investment reduce world output by almost 7% and account for nearly half of the observed cross-country differences in capital stock per employee. |
| Keywords: | Capital Allocation, Cultural Distance, Geography, Information Frictions, International Finance, International Investment, Misallocation, Open Economy, Rational Inattention |
| JEL: | E22 E44 F2 F3 F4 G15 O4 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cbscwp:303525 |
| By: | Bilal Mahli |
| Abstract: | German Chancellor Olaf Scholz’s ‘Zeitenwende’ in February 2022 marked a significant shift in German foreign and security policy in response to Russia’s invasion of Ukraine. This paper analyzes Germany’s new strategic direction, including increased defense spending, reduced energy dependence on Russia, and strengthened NATO and EU alliances. It examines the domestic political debates surrounding these changes and their implications for European security dynamics. The study also explores the impact on Germany’s relationships with key partners including France, the United States, and countries of the Global South. Finally, it offers recommendations for a more coherent, decisive, and strategic German foreign policy. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpcoen:pp_12-24 |
| By: | Isabelle Tsakok |
| Abstract: | If the recent peaceful transfer of power in Madagascar heralds a new trend, then the Malagasy people can dream big. For decades, the exercise of economic-cum-political power in the hands of a tiny elite has held the entire nation hostage. Today, the high poverty rate—around 80% (2021) stands in stark contrast to the natural resource abundance of this huge enormous island. There is hope, however, that with political stability, the Plan d’Émergence Madagascar (PEM) President Andry Rajoelina will undertake critical investments and reforms the Plan d’Émergence Madagascar (PEM) under President Andry Rajoelina will undertake key critical investments and reforms. If these initiatives persist, Madagascar can grow and exploit the historic market opportunities offered by the African Continental Free Trade Area (AfCFTA). Major sectors like agriculture and agri-business; tourism; textile and apparel industry hold promise for making a major significant contribution to poverty reduction in the short to medium terms, thus strengthening the current fragile recovery towards a more food secure and resilient Madagascar. |
| Date: | 2022–11 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rtrade:pb_64-22 |
| By: | Langinier, Corinne (University of Alberta, Department of Economics); Martinez-Zarzoso, Inmaculada (University of Goettingen); Ray Chaudhuri, Amrita (University of Winnipeg) |
| Abstract: | Our theoretical model predicts that green innovation is an inverted U-shaped function of emission tax under free trade, while it is upward sloping under autarky. Our empirical analysis supports this finding by using the Environmental Policy Stringency Index (EPS) as a proxy for environmental regulations. Our theory also determines the conditions under which international technology transfers increase green innovation. The empirical results indicate that technology transfers increase green innovation at any given level of EPS, although the inverted U-shape persists. We observe that OECD and non-OECD countries lie on either side of the turning point. Implementing stricter environmental regulations in non-OECD countries increases green innovation, while the reverse is likely to hold for most OECD countries. Our findings also show that market-based regulations are more effective in non-OECD countries for fostering green innovation, while non-market-based regulations are more effective in OECD countries. |
| Keywords: | Green Innovation; Environmental Policy; International Trade; Technology Transfer |
| JEL: | O34 Q55 Q56 Q58 |
| Date: | 2024–10–10 |
| URL: | https://d.repec.org/n?u=RePEc:ris:albaec:2024_008 |
| By: | Francesca Caselli; Ms. Huidan Huidan Lin; Mr. Frederik G Toscani; Jiaxiong Yao |
| Abstract: | Against the backdrop of the war in Ukraine, immigration into the European Union (EU) reached a historical high in 2022 and stayed significantly above pre-pandemic levels in 2023. The recent migration has helped accommodate strong labor demand, with around two-thirds of jobs created between 2019 and 2023 filled by non-EU citizens, while unemployment of EU citizens remained at historical lows. Ukrainian refugees also appear to have been absorbed into the labor market faster than previous waves of refugees in many countries. The stronger-than-expected net migration over 2020-23 into the euro area (of around 2 million workers) is estimated to push up potential output by around 0.5 percent by 2030—slightly less than half the euro area’s annual potential GDP growth at that time—even if immigrants are assumed to be 20 percent less productive than natives. This highlights the important role immigration can play in attenuating the effects of the Europe’s challenging demographic outlook. On the flipside, the large inflow had initial fiscal costs and likely led to some congestion of local public services such as schooling. Policy efforts should thus seek to continue to integrate migrants into the labor force while making sure that the supply of public services and amenities (including at the local level) keeps up with the population increase. |
| Keywords: | Migration; Labor Markets; European Union |
| Date: | 2024–09–27 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/211 |
| By: | Nohre, Carmen O. |
| Abstract: | [Contents:] Economic Growth Since World War II --- China (Farm Prices and Production Up – Farm Incomes Doubled – U.S. Imports Reduced) --- East Asia - Japan - South Korea - Taiwan (Rice Surpluses – Livestock Production Growing – Large Market for U.S.) --- Southeast Asia – Brunei – Burma – Indonesia – Malaysia – The Philippines – Singapore – Thailand (Rice Dominant – Corn – Wheat Imports – Other Crops – Livestock Production – U.S. Sales) --- South Asia – Bangladesh – India – Pakistan – Nepal – Sri Lanka (Rice and Other Grains – Edible Oil – U.S. Sales) --- The Pacific – Australia – New Zealand – Pacific Island Nations (Cattle and Sheep – Wheat – Tropical Products). |
| Keywords: | Crop Production/Industries, International Relations/Trade, Livestock Production/Industries, Productivity Analysis |
| URL: | https://d.repec.org/n?u=RePEc:ags:uersmp:347661 |
| By: | Stefania Miricola; Giorgio Ricchiuti; Margherita Velucchi |
| Abstract: | In the context of a local economy, the attraction of foreign investment is key player, given the positive effects that arise, both directly and indirectly, within the host region. This paper assesses the impact of regional characteristics, such as an R&D-friendly economic environment and institutional quality, on the longevity of companies targeted by foreign investments. We examine the survival probability of a sample comprising over 100, 000 foreign-owned manufacturing firms operating within the European Union (EU-28). A multi-level approach enables the evaluation of both firm- and location-specific features at two distinct geographical scales. Our findings indicate that government quality within national boundaries plays a pivotal role, not only in attracting foreign capital but also in promoting a long-term presence. Financial development at the national level exerts a profound influence on the survival of foreign affiliates, reducing the risk of exit by approximately 99%. |
| Keywords: | Regional economy, Survival, Multinational Enterprises, Multilevel analysis, Local Institutions |
| JEL: | F23 C14 C41 L25 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:frz:wpaper:wp2024_19.rdf |
| By: | Andreas Baur; Lisandra Flach; Sebastian Link; Andreas Peichl |
| Abstract: | How do German firms view the upcoming US election and a possible second Donald Trump presidency? As part of the ifo Business Survey in September 2024, more than 2, 000 German manufacturing firms were asked about the US election. 44 percent of German manufacturing firms anticipate negative impacts on their business situation if Donald Trump wins the election, compared to a potential Kamala Harris presidency. Key Messages The US market plays a crucial role for German industry, with a significant portion of German manufacturing firms maintaining export, import, or production relationships with the US economy 44 percent of German manufacturing firms anticipate negative impacts on their business situation if Donald Trump wins the election, compared to a potential Kamala Harris presidency Firms expecting negative consequences from a Trump presidency tend to rate Harris' chances of winning more favorably On the eve of the US elections, only 4 percent of German manufacturing companies are currently planning concrete adjustment measures for a potential second Trump presidency |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:econpb:_65 |
| By: | Jocelyn Boussard; Chiara Castrovillari; Tomohide Mineyama; Marta Spinella; Bilal Tabti; Maxwell Tuuli |
| Abstract: | This paper investigates the consequences of global shocks on a sample of low- and lower-middle-income countries with a particular focus on fragile and conflict-affected states (FCS). FCS are a group of countries that display institutional weakness and/or are negatively affected by active conflict, thereby facing challenges in macroeconomic policy management. Examining different global shocks associated with commodity prices, external demand, and financing conditions, this paper establishes that FCS economies are more vulnerable to these shocks compared to non-FCS peers. The higher sensitivity of FCS economies is mainly driven by procyclical fiscal responses, aggravated by the lack of effective spending controls and timely access to financial sources. External financing serves as a source of stability, partially mitigating the adverse impact of global shocks. This paper contributes to a better understanding of how conditions of fragility, which are on the rise in many parts of the world today, can amplify the effects of negative exogenous shocks. Its results highlight the diverse nature of underlying sources of vulnerabilities, spanning from fiscal and external buffers to institutional quality and economic structure, with lessons applicable to a broader set of countries. Efficient and timely external financial support from external partners, including international financial institutions, should help countries’ counter-cyclical responses to mitigate adverse shocks and achieve macroeconomic stability. |
| Keywords: | Global shocks; external financing; low-income countries; Fragile and conflict-affected states (FCS) |
| Date: | 2024–10–04 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/214 |