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on International Trade |
| By: | Yuqing Xing (National Graduate Institute for Policy Studies, Tokyo, Japan) |
| Abstract: | More and more American multinational corporations (MNCs) are outsourcing the production and assembly of their products to foreign companies. When they do so, they derive the largest share of their revenue from the intellectual property embedded in core technological innovation and brand names. However, conventional trade statistics are compiled based on the value of goods crossing national borders, as declared to customs. Generally, the value added associated with intellectual property rights and embedded in physical goods is not recorded as either export or import of any country. Hence, current trade statistics greatly underestimate US exports and substantially exaggerate its trade deficit. In this paper, we use the case of Apple, the largest American consumer products company, to illustrate the failure of conventional trade statistics to report actual US export capacity in the age of global value chains. According to our analysis of this case, if the value added of Apple intellectual property sold to foreign consumers were counted as part of US exports, total US exports would increase by 3.7%, and its trade deficit would decrease by 7.5%. In terms of bilateral trade, the value added under examination here would lower the US trade deficit with the Greater China region by 6.7% and that with Japan by 9.1%. |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:17-06&r=int |
| By: | Sheng, Liugang (Chinese University of Hong Kong); Yang, Dennis T. (University of Virginia) |
| Abstract: | We present a global production sharing model that integrates the organizational choices of offshoring into the determination of relative wages in developing countries. The model shows that offshoring through foreign direct investment contributes more prominently than arm's length outsourcing to the demand for skill in the South, thereby increasing the relative wage of skilled workers. We incorporate these theoretical results into an augmented Mincer earnings function and test the model based on a natural experiment in which China lifted its restrictions on foreign ownership for multinational companies upon its accession to the World Trade Organization in 2001. Empirical findings based on detailed Urban Household Surveys and trade data from Chinese customs provide support to our proposed theory, thus shedding light on the changes in firm ownership structure, the skill upgrading in exports, and the evolution of wage inequality from 1992 to 2008 in China's manufacturing sector. |
| Keywords: | offshoring, ownership structure, processing trade, wage inequality, China |
| JEL: | F16 J31 D23 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10924&r=int |
| By: | ISHIKAWA Yoshimichi |
| Abstract: | Even if animal diseases occur within a country, the World Organisation for Animal Health (OIE) may officially recognize either its entire territory or a region thereof as disease-free on the conditions of undertaking vaccination and so on. Based upon this official recognition, this country normally requires importing Members adopting sanitary and phytosanitary (SPS) measures against its products to reopen the market. In response to this request, importing Members are required to launch review procedures, including a risk assessment. However, when the veterinary authorities of importing Members fail to complete their review procedures within a certain period of time (in this dispute, the United States took almost 12 years), such a delay allowing the SPS measures at issue to continue might lead to significant restrictions on international trade. Thus, this article will explore how the SPS Agreement is designed to discipline a delay in the review procedure upon request for imports by exporting Members through not only procedural (Article 8, Appendix C) but also substantive provisions (e.g., Articles 2, 3, 5, and 6). It will also attempt to examine the possible implications derived from this case for Japan's agricultural policy. |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rpdpjp:17023&r=int |
| By: | Bakari, Sayef |
| Abstract: | This paper empirically analyzes the impact of agricultural exports on economic growth in Tunisia. Econometrical specifications are based on a neoclassical production function to explain this goal and the data cover the period 1988-2014. Empirical results show that agricultural exports have a positive effect on economic growth. The causality test proves the existence of a causal relationship from economic growth to agricultural exports. These results favor in particular a police economy promoting investment in the Tunisian agricultural sector. |
| Keywords: | agricultural exports, economic growth, the causality test, Tunisia. |
| JEL: | F1 F11 F13 F14 Q17 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80655&r=int |
| By: | Aqib Aslam; Natalija Novta; Fabiano Rodrigues-Bastos |
| Abstract: | This paper sets out the key concepts necessary to calculate trade in value added using input-output tables. We explain the basic structure of an input-output table and the matrix algebra behind the computation of trade in value added statistics. Specifically, we compute measures of domestic value-added, foreign value added, and forward and backward linkages, as well as measures of both a country’s participation and position in global value chains. We work in detail with an example of a global input-output table for 3 countries each with 4 sectors, provided by the Eora Multi-Region Input-Output (MRIO) database. The aim is to provide an introduction to the analysis of global value chains for use in policy work. An accompanying suite of Matlab codes are provided that can be used with the full set of Eora MRIO tables. |
| Date: | 2017–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:17/178&r=int |
| By: | Osbat, Chiara; Benkovskis, Konstantins; Bluhm, Benjamin; Bobeica, Elena; Zeugner, Stefan |
| Abstract: | What drives external performance of countries? This is a recurring question in academia and policy. The factors underlying export growth are receiving great attention, as countries struggle to grow out of the crisis by increasing exports and as protectionist discourses take foot again. Despite decades of debates, it is still unclear what the drivers of external performance are and, importantly, which ones policy makers can influence. We use Bayesian Model Averaging in a panel setting to investigate the drivers of export market shares of 25 EU countries, considering a wide range of traditional indicators along with novel ones developed within the CompNet Competitiveness Research Network. We find that export market share growth is linked to different factors in the old and in the new Member States, with one exception: for both groups, competitive pressures from China have strongly affected export performance since the early 2000s. In the case of old EU Member States, investment, quality of institutions and available liquidity to firms also appear to play a role. For the new EU Member States, labour and total factor productivity are particularly important, while inward FDI matters rather than domestic investment. Price competitiveness does not seem to play a very important role in either set of countries: relative export prices do show correlation with export performance for the new Member States, but only when they are adjusted for quality. Our results point to the importance of considering the “exporting stage” of a country when discussing export-enhancing policies. JEL Classification: C23, C51, C55, F14, O52 |
| Keywords: | Bayesian Model Averaging, competitiveness, export shares |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20172090&r=int |
| By: | Cristina Terra; Enrico Vasconcelos |
| Abstract: | Using a general equilibrium model with private R&D financing, we investigate the impact of trade openness on innovation, trade pattern and welfare for two countries equal in all aspects, except for the quality of credit markets. We show that trade openness increases innovation only in the country with better credit market, while it has a negative impact on innovation when credit markets are less developed. With respect to trade pattern, the country with worse credit market imports high tech goods and exports traditional goods. In terms of welfare, opening to trade may lower the welfare of individuals in the short run, but in the long run all of them are better o under free trade than if they were under autarky |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:bcb:wpaper:458&r=int |
| By: | Monteiro, José-Antonio; Teh, Robert |
| Abstract: | This paper reviews the different types of provisions explicitly addressing electronic commerce (e-commerce) in regional trade agreements (RTAs). The analysis covers the 275 RTAs currently in force and notified to the WTO as of May 2017. The analysis shows that e-commerce provisions have become increasingly more detailed but remain highly heterogeneous. The most common types of e-commerce provisions refer to the promotion of e-commerce, cooperation activities and the moratorium on customs duties. Other e-commerce provisions concern the domestic legal framework as well as more specific issues, such as electronic authentication, consumer protection, personal information protection and paperless trading. |
| Keywords: | Regional Trade Agreements,Electronic Commerce,E-commerce |
| JEL: | F13 F15 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wtowps:ersd201711&r=int |
| By: | ARA Tomohiro; FURUSAWA Taiji |
| Abstract: | We develop a dynamic, search-theoretical, general-equilibrium model to investigate the effect of trade liberalization in vertically-related industries, emphasizing differential impacts depending on the degree of relationship specificity of components that are traded within the vertical relationships. The paper in particular unveils the role of search-and-matching and the resulting market structures of vertically-related industries in evaluating the impact of trade liberalization. We find that the higher the relationship specificity, the thinner is the components market; and that a reduction in trade costs, either in final-goods trade or in components trade, makes the components market thinner and enhances social welfare. We also examine how trade liberalization changes the trade volume of final goods and components, and whether they exhibit complementarity. |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:17105&r=int |
| By: | Wassie, Tewodros Ayenew |
| Abstract: | This paper examines the causal effect of exporting on firms' productivity controlling for price heterogeneity. In most empirical studies that establish the export-productivity relationships, output is measured in values rather than in quantities. This makes it difficult to distinguish between productivity and within-firm changes in price that may occur following exposure to international markets. Using a detail data on quantity and prices from Ethiopian manufacturing firms in the period 1996-2005, this paper distinguishes efficiency from revenue based productivity and examines what this means for the estimated relationship between exporting and productivity. The empirical strategy implemented in the paper allows for potential endogeneity for exporting and controls for self-selection into export. The main results show that exporters are more productive than non-exporters in terms of revenue based productivity and this is explained by both self-selection and learning effects. However, when correcting for price heterogeneity using quantity-based measures of productivity, exporters appear to be similar to non-exporters either before or after export entry. Overall, the results suggest that the observed relationship between exporting and productivity mainly occurs through price mechanism. |
| Keywords: | Export; revenue productivity; physical productivity; price heterogeneity; fixed effect quantile regression |
| JEL: | D12 F14 O55 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80576&r=int |
| By: | NAIKI Yoshiko |
| Abstract: | This paper examines US-Tuna II , one of the disputes called a trilogy of the cases (along with US-Clove Cigarettes and US-COOL ) under the Word Trade Organization (WTO)'s Agreement on Technical Barriers to Trade (hereinafter "TBT Agreement"). This case was Article 21.5 (compliance) proceeding under the WTO's Dispute Settlement Understanding, addressing a question whether the United States was compliant with the findings made in the original proceeding. A major issue in this proceeding was whether the regulatory distinctions under the U.S. labelling scheme were "calibrated" to the differences in risks to dolphins among different fisheries under Article 2.1 of the TBT Agreement. This paper analyzes the treatment of the "calibration" notion under this proceeding. However, the compliance panel did not properly apply this "calibration" notion, thus, the dispute was not settled under this proceeding. Currently, the second Article 21.5 proceeding is ongoing. |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rpdpjp:17024&r=int |
| By: | Frohmann, Alicia |
| Abstract: | The Latin American and Caribbean Coffee Environmental Footprint Network initiative is a unique case of participation by public and private sector stakeholders from developing countries in the definition of environmental standards in the European Union. The purpose of this initiative is to involve stakeholders in defining standards that will affect their trade and competitiveness in the European market, rather than simply adapting and obliging coffee suppliers to adjust once standards are implemented. |
| Keywords: | COMERCIO INTERNACIONAL, ASPECTOS AMBIENTALES, DESARROLLO SOSTENIBLE, ECONOMIA VERDE, AGRICULTURA SOSTENIBLE, PROGRAMAS DE ACCION, UNION EUROPEA, ESTUDIOS DE CASOS, CAFE, COOPERACION INTERNACIONAL, INTERNATIONAL TRADE, ENVIRONMENTAL ASPECTS, SUSTAINABLE DEVELOPMENT, GREEN ECONOMY, SUSTAINABLE AGRICULTURE, PROGRAMMES OF ACTION, EUROPEAN UNION, CASE STUDIES, COFFEE, INTERNATIONAL COOPERATION |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col022:41987&r=int |
| By: | Mite Miteski (National Bank of the Republic of Macedonia); Dijana Janevska Stefanova (National Bank of the Republic of Macedonia) |
| Abstract: | This paper investigates the effects of foreign direct investment inflows in the industrial, construction and services sectors on economic growth in a panel of sixteen Central, Eastern and Southeastern European CESEE countries using data of different time spans within the 1998-2013 period. The empirical results show that total FDI contributes positively to the growth in the analyzed countries. With regards to our main focus, the analysis of the decomposition of FDI finds that FDI in the industrial and services sectors has a positive and significant effect on economic growth, whereas FDI in the construction sector does not exert statistically significant growth-promoting effects. |
| Keywords: | Foreign direct investment, economic growth, industrial sector, construction sector, services sector: |
| JEL: | F21 F43 C23 O47 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:mae:wpaper:2017-01&r=int |
| By: | Pierre Van Der Eng |
| Abstract: | How do multinational enterprises (MNE) respond to the ‘liability of foreignness’ (LoF) they experience in foreign markets? The case study in this paper demonstrates that firms develop dynamic, interactive strategies to minimise the LoF risks they perceive. The Australian subsidiary of Dutch MNE Philips Electronics experienced a significant LoF during 1939-1943, when it came close to being nationalised. In response, Philips Australia set out to build ‘FDI legitimacy’ after 1945 in order to maximise both its ‘national embeddedness’ in the host country and its influence on government policy that guided the rapid development of Australia’s postwar electronics industry. This strategy aimed to minimise risk and maximise commercial opportunities for the firm. Philips Australia localised senior management, maximised local procurement and local manufacturing, took a leading role in industry associations, engaged politically influential board members and used marketing tools to build a strong brand and a positive public profile in Australia. The firm became aware of the limitations of this strategy in 1973, when a new Labor government reduced trade protection. Increasing competition from Japanese electronics firms forced Philips Australia to restructure and downsize its production operations. Despite increasing reliance on imports from the parent company’s regional supply centres and efforts to specialise production on high- value added products, the firm saw its profitability and market share in Australia decrease. The case demonstrates that the success of strategic responses to minimise LoF and maximise ‘FDI legitimacy’ is highly context-dependent. |
| Keywords: | liability of foreignness, FDI legitimacy, Philips, Australia, electronics industry |
| JEL: | F23 L68 M16 N87 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:auu:hpaper:057&r=int |
| By: | NAIKI Yoshiko |
| Abstract: | This paper examines US-COOL , one of the disputes called a trilogy of the cases (along with US-Clove Cigarettes and US-Tuna II ) under the Word Trade Organization (WTO)'s Agreement on Technical Barriers to Trade (hereinafter "TBT Agreement"). This case was Article 21.5 (compliance) proceeding under the WTO's Dispute Settlement Understanding, addressing a question whether the United States was compliant with the findings made in the original proceeding. There are two key obligations under the TBT Agreement (i.e., Articles 2.1 and 2.2) and one feature of this case was to interpret and clarify the obligation of Article 2.2 (the necessity requirement). However, the violation of Article 2.2 was not found in this case; there is no case yet finding a violation of Article 2.2. This paper discusses the implications on this point. |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rpdpjp:17025&r=int |
| By: | Amavilah, Voxi; Asongu, Simplice; Andrés, Antonio |
| Abstract: | We argue that there exists an indirect link between globalization and the knowledge economy of African countries in which globalization influences ‘peace and stability’ and peace and stability affects governance, and through governance the knowledge economy. We model the link as a three-stage process in four testable hypotheses, which permits an empirical analysis without sacrificing economic relevance for statistical significance. The results indicate that the impacts on governance of peace and stability from globalization defined as trade are stronger than those of peace and stability resulting from globalization taken to be foreign direct investment. We conclude that foreign direct investment is not a powerful mechanism for stimulating and sustaining the African knowledge. However, since the effects of globalization on peace and stability can influence governance both positively and negatively, we also conclude that the prospect for the knowledge economy in African countries may be realistic and attainable, as long as these countries continue to engage in the kind of globalization that enhances peace and stability. |
| Keywords: | Globalization; peace and stability; Governance; knowledge economy, African countries |
| JEL: | I20 I28 K42 O10 O55 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80651&r=int |
| By: | Marinov, Eduard |
| Abstract: | The diversification of international markets and the direction towards regions which were neglected and evaded as risky could be a powerful factor in the search for growth acceleration and overcoming recession. The paper aims at summarizing the potential of trade with one such region – Sub-Saharan Africa, by providing an EU comparison of Bulgarian and Romanian trade relations with it. The studies the dynamics of both countries trade with the region for the 2003-2015 period, the place of Sub-Saharan Africa in Bulgarian and Romanian extra-EU trade, the commodity structure and the direction of trade. |
| Keywords: | Sub-Saharan Africa, SSA, Bulgarian International Trade, Romanian International Trade, EU comparison |
| JEL: | F14 F50 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80716&r=int |
| By: | Christian Fons-Rosen; Sebnem Kalemli-Ozcan; Bent E. Sorensen; Carolina Villegas-Sanchez; Vadym Volosovych |
| Abstract: | We study the impact of foreign direct investment (FDI) on total factor productivity (TFP) of domestic firms using a new, representative firm-level data set spanning six countries. A novel finding is that firm-level spillovers from foreign firms to domestic companies can be significantly positive, non-existent, or even negative, depending on which sectors receive FDI. When foreign firms produce in the same narrow sector as domestic firms, the latter are negatively affected by increasing competition and positively affected by knowledge spillovers. We find that the positive spillovers dominate if foreign firms enter sectors where firms are “technologically close,” controlling for the endogeneity of their entry decision into such sectors. Positive technology spillovers also affect firms in other sectors, if those sectors are technologically close to the sectors receiving FDI. Increasing FDI in sectors that are technologically close to other sectors boosts TFP of domestic firms by twice as much as increasing FDI by the same amount across all sectors. |
| JEL: | E32 F15 F36 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23643&r=int |
| By: | Maria D. Tito; Ruoying Wang |
| Abstract: | This paper investigates the impact of international trade on input market distortions. We focus on a specific friction, binding borrowing constraints in capital markets. We propose a theoretical model where a firm's demand for capital is constrained by an initial asset allocation and past sales. While the initial distribution of assets induces misallocation if the asset endowment at more productive firms does not fully cover their demand for capital, the dependence of the borrowing constraint from past sales proxies for cross-firm differences in the cost of default, which is empirically higher at larger firms. Overtime, an increase in sales relaxes the borrowing constraint; similarly, shocks to market access--such as opening to trade--contribute to easing the financial constraints, thus accelerating the convergence toward the frictionless allocation. To analyze the empirical relationship between market access and credit frictions, we draw on the annual surveys conducted by the Chinese National Bureau of Statistics (NBS) for 1998 to 2007, and we construct firm-level measures of distortions that control for firm heterogeneity. We find smaller labor and capital distortions across exporting firms; such distortions are even smaller in sectors where firms face lower tariffs or are more dependent on external financing, a proxy for the presence of binding financial constraints. Our empirical analysis also shows that export shocks significantly reduce the dispersion across input returns over time, with the effect mostly occurring at constrained firms. Our findings point to within-sector input reallocation as an important channel to overcome misallocation in open economies. |
| Keywords: | Financial Frictions ; Heterogeneous Firms ; International Trade ; Misallocation |
| JEL: | F12 F14 |
| Date: | 2017–08–03 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2017-77&r=int |
| By: | Ahmad Lashkaripour (Indiana University); Volodymyr Lugovskyy (Indiana University) |
| Abstract: | In a large class of trade models, trading patterns and the corresponding welfare gains depend on the scale elasticity—a deep parameter that governs industry-wide returns to scale. Noting that the scale elasticity depends on the extent to which technologies or products are nationally differentiated, we develop an empirical strategy to structurally estimate the scale elasticity across various industries. A trade model that features our estimated scale elasticity captures the negative relationship between population size and real income, which eludes standard trade models. Furthermore, we find that scale elasticities display considerable inter-industry variation. Accounting for these previously overlooked variations greatly modifies the estimated gains from trade. |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:inu:caeprp:2017004&r=int |
| By: | UMEJIMA Osamu |
| Abstract: | This paper discusses the effects of, and countermeasures against, the expiration of Article 15(a)(ii) of China's World Trade Organization (WTO) Accession Protocol. China agreed in the Article that importing Members may apply non-market economy methodologies in calculating antidumping duties against Chinese products. WTO Members have imposed substantially higher antidumping duties on a wider range of Chinese products than products from the market economy, applying non-market economy methodologies pursuant to Article 15. The expiration of subparagraph (ii) thereof on 11 December 2016 has attracted a variety of arguments. I believe that a Member may continue applying the methodology if it establishes pursuant to the criteria in its national law that Chinese producers operate the subject merchandise business under the non-market economy conditions, provided that the criteria were established before China's WTO accession date. China brought this issue to the WTO Dispute Settlement. Its reports must carefully be reviewed, once issued. Irrespective of its reports, however, Members may be able to adjust certain cost elements in the constructed value of Chinese products in a manner similar to the non-market economy methodology under certain conditions. |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:17041&r=int |
| By: | Marinov, Eduard |
| Abstract: | The paper presents the main features of trade relations between Central and East Europe (CEE) and Sun-Saharan Africa (SSA). The main focus is on trade with countries within the Economic Partnership Agreements (EPA) framework. The timeframe under review is 2003-2013. The first section presents the main features of EU trade relations with African EPA regions, summarizing trade dynamics and commodity structure. Section two analyses trade relations between CEE EU Member States and African EPA countries and regions, discussing the dynamics, commodity structure and direction of trade. Finally some conclusions are drawn on the trends in trade relations with SSA regarding both the EU in general, as well as some specifics in the development of trade flows of CEE countries with a special attention paid on Bulgaria’s participation. |
| Keywords: | International trade, Central and East Europe (CEE), Sub-Saharan Africa (SSA), Economic Partnership Agreements (EPA) |
| JEL: | F10 O55 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80714&r=int |
| By: | Bakari, Sayef |
| Abstract: | The aim of this paper is to investigate the long run term and the short run term impacts of vegetables exports on economic growth of Tunisia. In order, to achieve this purpose, annual data were collected from the reports of World Bank for the periods between 1970 and 2015, was tested by using Correlation Analysis, Augmented Dickey-Fuller (ADF) and Phillip-Perron (PP) stationary test, co integration analysis of Vector Error Correction Model. According to the result of the analysis, vegetables exports have a positive effect on economic growth in the long run term and in the short run term. These results provide on evidence that vegetables exports, thus, are seen as source of economic growth in Tunisia. For this reason, it is very important to refine investment in this sector. |
| Keywords: | Vegetables Exports, Economic Growth, Cointegration, VECM, Tunisia |
| JEL: | F0 F1 F11 F13 F14 Q17 Q18 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80722&r=int |
| By: | Annelies Deuss (OECD) |
| Abstract: | During the commodity price spikes in 2007-08 and 2010-11, several countries implemented temporary export restrictions on staple foods in an attempt to protect domestic consumers from rising and volatile prices. The impacts of these policies, however, are not limited to the countries that are instituting them; they can also influence consumer prices in their trading partners. This study analyses whether the impact of export restrictions was different in countries that were traditionally more dependent on imports from the restricting country than in countries that imported a smaller share. Four export bans are considered: the maize ban in Argentina, the rice bans in India and Viet Nam, and the wheat ban in the Russian Federation. Using an error correction model in a panel framework, the study identifies the long-run impacts of export bans by showing whether the introduction of these bans caused a structural break in the long-term relationship between prices in international markets and consumer prices in domestic markets. The analysis demonstrates that the effects of an export ban were more pronounced in the group of countries that traditionally imported a higher share from the restricting countries than in countries with a lower import dependency. The results show that, even though export bans are temporary in nature, they can have long lasting effects. |
| Keywords: | error correction model, export bans, Food prices, price transmission |
| JEL: | C23 F13 Q11 Q17 Q18 |
| Date: | 2017–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:agraaa:105-en&r=int |
| By: | Baumann, Ursel; Dieppe, Alistair; Dizioli, Allan Gloe |
| Abstract: | Members of the US House of Representatives have proposed a major overhaul of the US corporate tax system, the so-called “destination-based border-adjusted cash-flow tax” (DBCFT). The literature on the economic implications and spillovers of such a DBCFT is scarce. This paper aims to provide a comprehensive analysis of the mechanics of such a tax, its macroeconomic implications as well as its global spillovers using a fully structural global multi-country model. Our results suggest that the short term macroeconomic impact of the reform would depend primarily on how permanent agents perceive the policy to be. Robustness scenarios show that the magnitude of the short term impact will also depend on the extent to which exporters are reimbursed by their domestic costs; what categories of goods are excluded from the reform; how the government uses the revenues generated by the border adjusted tax; and the pricing system used by exporters. Moreover, global spillovers will depend on how easy it is to replace imported goods by domestic production; whether US trading partners retaliate, and how financial markets in emerging economies react. If there is disequilibrium in relative prices in the short term, global economic activity spillovers could be strongly negative and world trade could decline substantially. JEL Classification: C68, E47, F41, F44, F62, O41 |
| Keywords: | fiscal policy, international business cycle, spillovers model based analysis |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20172093&r=int |
| By: | Sugata Marjit (University of Calcutta, India); Lei Yang (Hong Kong Polytechnic University) |
| Abstract: | Theoretical discussion on compensating mechanisms involving the Pareto criterion that address inequality rather than absolute welfare is non-existent in trade literature. In a simple HOS model we consider taxtransfer policies that keep the pre-trade degree of inequality unchanged between skilled and unskilled workers rather than the absolute income of the losing group. We discuss the problem of existence of such an inequality-neutral tax rate which generates a positive increment in the after tax skilled wage and unskilled wage. Such a mechanism exists and is independent of whether the tax is progressive or proportional. Thus the compensating mechanism that is available in this standard model is stronger than the conventional Pareto criterion. |
| Keywords: | Trade Model; Wage inequality; Compensation mechanism; Tax policy |
| JEL: | F11 J31 D63 H20 H23 |
| Date: | 2017–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:582&r=int |
| By: | Piracha, Matloob (University of Kent); Tani, Massimiliano (University of New South Wales); Tchuente, Guy (University of Kent) |
| Abstract: | This paper analyses the impact of a change in Australia's immigration policy, introduced in the mid-1990s, on migrants' remittance behaviour. More precisely, we compare the remittance behaviour of two cohorts who entered Australia before and after the policy change, which consists of stricter entry requirements. Our empirical strategy uses conditional difference-in-differences in the presence of interactive fixed-effects. We first show that Bai's (2009) least squares estimator and conditional difference-in-differences are biased if used on their own. We then derive conditions that are required to obtain a consistent estimator using a combination of conditional difference-in-differences and Bai's (2009) least squares estimator. The results indicate that those who entered under more stringent conditions – the second cohort – have a higher probability to remit than those in the first cohort, though the policy change has no discernible effect on the level of remittances. |
| Keywords: | immigration, treatment effect, difference-in-differences |
| JEL: | C13 F22 F24 J61 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10927&r=int |