Geo-Economic Fragmentation and the Future of Multilateralism PDF Download

Author: Mr. Shekhar Aiyar
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 41

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Book Description
After several decades of increasing global economic integration, the world is facing the risk of policy-driven geoeconomic fragmentation (GEF). This note explores the ramifications. It identifies multiple channels through which the benefits of globalization were earlier transmitted, and along which, conversely, the costs of GEF are likely to fall, including trade, migration, capital flows, technology diffusion and the provision of global public goods. It explores the consequences of GEF for the international monetary system and the global financial safety net. Finally, it suggests a pragmatic path forward for preserving the benefits of global integration and multilateralism

Author: Tatsushi Okuda
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 50

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Book Description
This paper applies the two-country open-economy model with trade in stocks and bonds of Coeurdacier et al. (2010) to quantify the loss of international diversification benefits for major advanced economies, which have a significant presence in international financial markets, under geoeconomic fragmentation. We perform counterfactual simulations under different hypothetical fragmentation scenarios in which these economies are unable to trade with geopolitically distant countries, as measured by voting disagreement on foreign policy issues at the United Nations General Assembly meetings during 2012-2021. The simulation results imply a potentially significant loss of international diversification benefits of financial openness for the considered advanced economies by limiting trading to partner countries that are geopolitical allies with highly synchronized business cycles.

Author: Chikako Baba
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 40

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Book Description
Geoeconomic fragmentation (GEF) is becoming entrenched worldwide, and the European Union (EU) is not immune to its effects. This paper takes stock of GEF policies impinging on—and adopted by—the EU and considers how exposed the EU is through trade, financial and technological channels. Motivated by current policies adopted by other countries, the paper then simulates how various measures—raising costs of trade and technology transfer and fossil fuel prices, and imposition of sectoral subsidies—would affect the EU economy. Due to its high-degree of openness, the EU is found to be exposed to GEF through multiple channels, with simulated losses that differ significantly across scenarios. From a welfare perspective, this suggests the need for a cautious approach to GEF policies. The EU’s best defence against GEF is to strengthen the Single Market while advocating for a multilateral rules-based trading system.

Author: Marijn A. Bolhuis
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 35

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Book Description
We construct a new database which covers production and trade in 136 primary commodities and 24 manufacturing and service sectors for 145 countries. Using this new more granular data, we estimate spillover effects from plausible trade fragmentation scenarios in a new multi-country, multi-sector, general-equilibrium model that accounts for unique demand and supply characteristics of commodities. The results show fragmentation-induced output losses can be sizable, especially for Low-Income-Countries, although the magnitudes vary according to the particular scenarios and modelling assumptions. Our work demonstrates that not accounting for granular commodity production and trade linkages leads to underestimation of the output losses associated with trade fragmentation.

Author: Giacomo Magistretti
Publisher: International Monetary Fund
ISBN:
Category :
Languages : en
Pages : 26

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Book Description
As a small open economy, Bulgaria benefits from economic exchanges with global partners. However, after a boost before the Global Financial Crisis and EU accession, its integration in global value chains has been growing only modestly in recent years and it remains particularly low when it comes to links with EU partners. To capitalize from the integration with the EU Single Market and exploit the opportunities that will come from joining the euro zone and the Schengen area, Bulgaria should focus on enhancing its non-cost competitiveness by improving its governance and investing in infrastructure and human capital.

Author: Mengqi Wang
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 62

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Book Description
The paper builds a unique industry-level dataset by combining Mexico’s nationally sourced inputoutput data (INEGI) with cross-country sources (WIOD, UN Comtrade). Using this dataset to exploit higher supply linkages across a larger number of industries than what is available in cross-country sources, the paper estimates the trade diversion effect on Mexico’s exports to the U.S. from two episodes, with a focus on the first: the U.S.-China trade tension in 2018 and the U.S. sanctions on Russia in 2014. Difference-in-differences, local projections and few other empirical methodologies are used. For the first episode, the paper finds higher trade diversion effects than estimates in literature. Output tariff plays an important role, and there is some evidence of a positive impact through downstream tariffs. The effects are stronger when nationally sourced input-output data is used compared to those derived from cross-country sources. Importantly, the magnitude of trade diversion across industries does not depend on Mexico’s industry-level trade exposure to the U.S., but rather on the U.S. tariff changes on Chinese goods, the decrease in imports from China, product substitutability with Chinese products, and (weakly) on Mexico’s GVC integration. Similarly, for the second episode, the paper finds positive trade diversion effects. Overall, the findings suggest that trade diversion effect might be higher than previously thought and the proper accounting of dataset and supply linkages makes a difference.

Author: Mr. Jorge A Alvarez
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 78

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Book Description
This paper studies the economic impact of fragmentation of commodity trade. We assemble a novel dataset of production and bilateral trade flows of the 48 most important energy, mineral and agricultural commodities. We develop a partial equilibrium framework to assess which commodity markets are most vulnerable in the event of trade disruptions and the economic risks that they pose. We find that commodity trade fragmentation – which has accelerated since Russia’s invasion of Ukraine – could cause large price changes and price volatility for many commodities. Mineral markets critical for the clean energy transition and selected agricultural commodity markets appear among the most vulnerable in the hypothetical segmentation of the world into two geopolitical blocs examined in the paper. Trade disruptions result in heterogeneous impacts on economic surplus across countries. However, due to offsetting effects across commodity producing and consuming countries, surplus losses appear modest at the global level.

Author: Davide Furceri
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 46

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Book Description
Are Temporary Trade Barriers (TTBs) introduced for strategic reasons? To answer this question, we construct a novel sectoral measure of retaliation using daily bilateral data on TTB responses in 1220 subsectors across a panel of 25 advanced and emerging market economies over 1989-2019. Stylized facts and econometric analysis suggest that within-year responses are more important in terms of intensity and frequency than commonly understood from the existing literature, which has tended to ignore them. We find that retaliation often consists of responses across many sectors and that same-sector retaliation is far from being the norm. In addition, we find that larger countries tend to retaliate more, and that retaliation is larger during periods of higher unemployment and when the trading partner targeted a domestic comparative advantage sector.

Author: United Nations Development Programme
Publisher: Stylus Publishing, LLC
ISBN: 9213589247
Category : Business & Economics
Languages : en
Pages : 721

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Book Description
Today, collective action on challenges ranging from climate change mitigation to peace and security is frustratingly slow or stymied altogether. Lack of trust and polarization--both associated with insecurity--exacerbate the gridlock. Shared, interlinked global challenges, like the pandemic and its recovery, are outpacing our willingness and our institutions’ capacities to respond to them. Why, despite all our riches and technologies, are we so stuck? How do we get unstuck? Is it possible to mobilize action to address globally shared challenges in a world that is intensively polarized? The 2023-2024 Human Development Report explores these issues and offers a platform for strategic discussion on how to move beyond narrow zero-sum thinking and support cooperation even as we have diverging interests and views. The e-book for this publication has been converted into an accessible format for the visually impaired and people with print reading disabilities. It is fully compatible with leading screen-reader technologies such as JAWS and NVDA.

Author: Michael A. Cohen
Publisher: Taylor & Francis
ISBN: 1040011489
Category : Business & Economics
Languages : en
Pages : 217

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Book Description
This book reframes the purpose of infrastructure from being an input to economic growth to becoming a major instrument in reducing socio-economic inequalities in both industrialized and developing countries. Drawing on global and national lessons of COVID-19 and extensive working experience in 55 countries, this book reviews infrastructure policies and performance over several decades and suggests that the “underperformance” of infrastructure could be improved by more attention to users and the demand side, and thereby contribute to overcoming many obstacles facing low-income communities around the world. This book argues that growth is not a necessary condition for sustainability or social justice, and that both are undermined by structural inequalities which reduce the income and opportunities of urban households. More focus on user needs can substantially change the distribution of benefits and the quality of living conditions of low-income people. It provides a unique theoretical and on-the-ground critique of conventional infrastructure practices while illustrating to readers the many positive experiences around the world. More infrastructure is not enough; different and better is needed. This book reviews World Bank experience in launching a 30-year program to alleviate urban poverty through some 7,000 projects, showing that many significant policy changes have led to a big improvement in global urban policies adopted by national and local governments, yet have failed to significantly address and reduce intra-urban inequalities. The audience for this book includes academics, both faculty and advanced graduate students, while also a wider public interested in the prospects for international development.