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Author: Gihoon Hong and Soo Hyun Oh Publisher: 길잡이미디어 ISBN: 8932242437 Category : Languages : en Pages : 45
Book Description
We study the welfare implications of a bilateral free trade agreement. The model is based on the recent trade literature that considers search and matching frictions in the labor market. We extend the model by incorporating country-level heterogeneity in terms of production technology, population, and productivity endowment. Model simulation results show a simultaneous tariff cut between symmetric countries to reduce unemployment rates and increase prices in the product market due to higher long run demand, while nevertheless benefiting the economy owing to a more rapid rise in consumer income. In the case of asymmetric countries, we find that larger gains from greater openness to trade accrue to a country with (relatively) more elastic supply occasioned by capital-intensive production technology that accommodates more flexible adjustments to output in response to increased demand. We calibrate the model to Korean and Japanese data in order to assess the expected outcome of the potential trade liberalization between those countries. With a scenario of symmetric level of trade liberalization (in terms of trade cost reduction), when we assume the same population size in a counterfactual way, we find Japan to receive greater benefits from the opening because its relatively more capital intensive production allow for quicker output adjustment upon trade liberalization. When we presume, however, that Japan’s population is 2.5 times that of Korea, the results show Korea to enjoy a slightly more surplus due to the market size Executive Summary 1. Introduction 2. Trade Model with Labor Market Friction 2.1. Environment 3. Simulation Results 3.1. Trade Liberalization between Symmetric Countries 3.2. Trade Liberalization between Asymmetric Countries 3.2.1. Difference in output elasticity with respect to labor 3.2.2. Difference in population 3.2.3. Difference in productivity 4. Calibration of Korea-Japan FTA 4.1. Background 4.2. Parametrization 4.3. Results 5. Conclusion References
Author: Gihoon Hong and Soo Hyun Oh Publisher: 길잡이미디어 ISBN: 8932242437 Category : Languages : en Pages : 45
Book Description
We study the welfare implications of a bilateral free trade agreement. The model is based on the recent trade literature that considers search and matching frictions in the labor market. We extend the model by incorporating country-level heterogeneity in terms of production technology, population, and productivity endowment. Model simulation results show a simultaneous tariff cut between symmetric countries to reduce unemployment rates and increase prices in the product market due to higher long run demand, while nevertheless benefiting the economy owing to a more rapid rise in consumer income. In the case of asymmetric countries, we find that larger gains from greater openness to trade accrue to a country with (relatively) more elastic supply occasioned by capital-intensive production technology that accommodates more flexible adjustments to output in response to increased demand. We calibrate the model to Korean and Japanese data in order to assess the expected outcome of the potential trade liberalization between those countries. With a scenario of symmetric level of trade liberalization (in terms of trade cost reduction), when we assume the same population size in a counterfactual way, we find Japan to receive greater benefits from the opening because its relatively more capital intensive production allow for quicker output adjustment upon trade liberalization. When we presume, however, that Japan’s population is 2.5 times that of Korea, the results show Korea to enjoy a slightly more surplus due to the market size Executive Summary 1. Introduction 2. Trade Model with Labor Market Friction 2.1. Environment 3. Simulation Results 3.1. Trade Liberalization between Symmetric Countries 3.2. Trade Liberalization between Asymmetric Countries 3.2.1. Difference in output elasticity with respect to labor 3.2.2. Difference in population 3.2.3. Difference in productivity 4. Calibration of Korea-Japan FTA 4.1. Background 4.2. Parametrization 4.3. Results 5. Conclusion References
Author: Romain Wacziarg Publisher: Edward Elgar Publishing ISBN: 9781788111492 Category : Free trade Languages : en Pages : 0
Book Description
This compelling two-volume collection presents the major literary contributions to the economic analysis of the consequences of trade liberalization on growth, productivity, labor market outcomes and economic inequality. Examining the classical theories that stress gains from trade stemming from comparative advantage, the selection also comprises more recent theories of imperfect competition, where any potential gains from trade can stem from competitive effects or the international transmission of knowledge. Empirical contributions provide evidence regarding the explanatory power of these various theories, including work on the effects of trade openness on economic growth, wages, and income inequality, as well as evidence on the effects of trade on firm productivity, entry and exit. Prefaced by an original introduction from the editor, the collection will to be an invaluable research resource for academics, practitioners and those drawn to this fascinating topic.
Author: Andrew B. Bernard Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
This paper examines how country, industry and firm characteristics interact in general equilibrium to determine nations' responses to trade liberalization. When firms possess heterogeneous productivity, countries differ in relative factor abundance and industries vary in factor intensity, falling trade costs induce reallocations of resources both within and across industries and countries. These reallocations generate substantial job turnover in all sectors, spur relatively more creative destruction in comparative advantage industries than comparative disadvantage industries, and magnify ex ante comparative advantage to create additional welfare gains from trade. The relative ascendance of high-productivity firms within industries boosts aggregate productivity and drives down consumer prices. In contrast with the neoclassical model, these price declines dampen and can even reverse the real wage losses of scarce factors as countries liberalize.
Author: Valentin F. Lang Publisher: International Monetary Fund ISBN: 1484347064 Category : Business & Economics Languages : en Pages : 66
Book Description
We study economic globalization as a multidimensional process and investigate its effect on incomes. In a panel of 147 countries during 1970-2014, we apply a new instrumental variable, exploiting globalization’s geographically diffusive character, and find differential gains from globalization both across and within countries: Income gains are substantial for countries at early and medium stages of the globalization process, but the marginal returns diminish as globalization rises, eventually becoming insignificant. Within countries, these gains are concentrated at the top of national income distributions, resulting in rising inequality. We find that domestic policies can mitigate the adverse distributional effects of globalization.
Author: World Bank Publisher: World Bank Publications ISBN: 1464814953 Category : Business & Economics Languages : en Pages : 545
Book Description
Global value chains (GVCs) powered the surge of international trade after 1990 and now account for almost half of all trade. This shift enabled an unprecedented economic convergence: poor countries grew rapidly and began to catch up with richer countries. Since the 2008 global financial crisis, however, the growth of trade has been sluggish and the expansion of GVCs has stalled. Meanwhile, serious threats have emerged to the model of trade-led growth. New technologies could draw production closer to the consumer and reduce the demand for labor. And trade conflicts among large countries could lead to a retrenchment or a segmentation of GVCs. World Development Report 2020: Trading for Development in the Age of Global Value Chains examines whether there is still a path to development through GVCs and trade. It concludes that technological change is, at this stage, more a boon than a curse. GVCs can continue to boost growth, create better jobs, and reduce poverty provided that developing countries implement deeper reforms to promote GVC participation; industrial countries pursue open, predictable policies; and all countries revive multilateral cooperation.
Author: Alla Lileeva Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
The paper investigates the productivity effects of the Canada-U.S. Free Trade Agreement on Canadian manufacturing. It finds that Canadian tariff cuts increased exit rates among moderately productive non-exporting plants. This led to the reallocation of market share towards highly productive plants, which explains the aggregate productivity gains observed when Canadian tariffs were reduced. The U.S. tariff cuts led to the within-plant productivity gains in exporters and, especially, new entrants into the export market. Any lack of output responses and labor-shedding as a consequence of the FTA was experienced by non-exporting plants, while exporters captured the gains from the FTA.
Author: Claire H. Hollweg Publisher: World Bank Publications ISBN: 1464802637 Category : Business & Economics Languages : en Pages : 123
Book Description
This report quantifies labor mobility costs in developing countries and simulates the implied adjustment paths of employment and wages following a change in trade policy. High mobility costs are shown to reduce the potential gains to trade reform.
Author: Aaditya Mattoo Publisher: Oxford University Press ISBN: 019923521X Category : Business & Economics Languages : en Pages : 675
Book Description
This title provides a comprehensive introduction to the key issues in trade and liberalization of services. Providing a useful overview of the players involved, the barriers to trade, and case studies in a number of service industries, this is ideal for policymakers and students interested in trade.
Author: Eli Filip Heckscher Publisher: MIT Press (MA) ISBN: Category : Business & Economics Languages : en Pages : 248
Book Description
This book presents the corrected and first complete translation from Swedish of Heckscher's 1919 article on foreign trade as well as a translation from Swedish of Ohlin's 1924 Ph.D. dissertation, the main source of the now famous Heckscher-Ohlin theorem.
Author: Gihoon Hong and Soo Hyun Oh
Author: Gihoon Hong and Soo Hyun Oh
Author: Romain Wacziarg
Author: Andrew B. Bernard
Author: Mauricio Mesquita Moreira
Author: Valentin F. Lang
Author: World Bank
Author: Alla Lileeva
Author: Claire H. Hollweg
Author: Aaditya Mattoo
Author: Eli Filip Heckscher