Author: Jorge Andres Tovar MoraPublisher:
ISBN:
Category :
Languages : en
Pages : 116
Book Description
The Welfare Effects of Trade Liberalization and Exchange Rate Pass-through
Author: Jorge Andres Tovar MoraPublisher:
ISBN:
Category :
Languages : en
Pages : 116
Book Description
The Welfare Effects of Trade Liberalization and Exchange Rate Pass-through
Author: Jorge Andres TovarLiberalization of Capital Movements and Trade
Author: Pertti HaaparantaPublisher:
ISBN:
Category : Capital movements
Languages : en
Pages : 36
Book Description
The Welfare Effects of Trade and Capital Market Liberalization
Author: Sebastian EdwardsPublisher:
ISBN:
Category : Capital
Languages : en
Pages : 46
Book Description
This paper deals with the dynamics of trade and capital account liberalization in a developing country. The welfare consequences of trade and capital account liberalization under alternative sequencing scenarios are investigated. We draw on standard trade theory results to show that the opening of the capital account in the presence of trade distortions may be welfare reducing if foreign borrowing is used to increase investment. However we demonstrate that this welfare reducing effect of opening the capital account will not occur if shadow prices are used to guide investment decisions. It is then shown that if capital market restrictions fall disproportionally on investment (as opposed to consumption) a gradual reduction of import tariffs is superior to an abrupt trade liberalization.
Handbook of Deep Trade Agreements
Author: Aaditya MattooPublisher: World Bank Publications
ISBN: 1464815542
Category : Political Science
Languages : en
Pages : 768
Book Description
Deep trade agreements (DTAs) cover not just trade but additional policy areas, such as international flows of investment and labor and the protection of intellectual property rights and the environment. Their goal is integration beyond trade or deep integration. These agreements matter for economic development. Their rules influence how countries (and hence, the people and firms that live and operate within them) transact, invest, work, and ultimately, develop. Trade and investment regimes determine the extent of economic integration, competition rules affect economic efficiency, intellectual property rights matter for innovation, and environmental and labor rules contribute to environmental and social outcomes. This Handbook provides the tools and data needed to analyze these new dimensions of integration and to assess the content and consequences of DTAs. The Handbook and the accompanying database are the result of collaboration between experts in different policy areas from academia and other international organizations, including the International Trade Centre (ITC), Organisation for Economic Co-operation and Development (OECD), United Nations Conference on Trade and Development (UNCTAD), and World Trade Organization (WTO).
Assessing Trade and Welfare Effects of Trade Liberalization
Author: Victor D. NormanTrade Liberalization
Author: Romain WacziargPublisher: 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.
Dominant Currency Paradigm: A New Model for Small Open Economies
Author: Camila CasasPublisher: International Monetary Fund
ISBN: 1484330609
Category : Business & Economics
Languages : en
Pages : 62
Book Description
Most trade is invoiced in very few currencies. Despite this, the Mundell-Fleming benchmark and its variants focus on pricing in the producer’s currency or in local currency. We model instead a ‘dominant currency paradigm’ for small open economies characterized by three features: pricing in a dominant currency; pricing complementarities, and imported input use in production. Under this paradigm: (a) the terms-of-trade is stable; (b) dominant currency exchange rate pass-through into export and import prices is high regardless of destination or origin of goods; (c) exchange rate pass-through of non-dominant currencies is small; (d) expenditure switching occurs mostly via imports, driven by the dollar exchange rate while exports respond weakly, if at all; (e) strengthening of the dominant currency relative to non-dominant ones can negatively impact global trade; (f) optimal monetary policy targets deviations from the law of one price arising from dominant currency fluctuations, in addition to the inflation and output gap. Using data from Colombia we document strong support for the dominant currency paradigm.
Economics Working Papers
Author: Allan SørensenThree Essays on Tariff Pass-through
Author: Bo-Young ChoiPublisher:
ISBN: 9781303537967
Category :
Languages : en
Pages :
Book Description
In Chapter 1, I show empirically that the presence of retailers can reduce gains from trade under certain market structures. Theory suggests that retailers' buyer power (monopsony power), via negotiating with foreign suppliers, reduces gains from trade liberalization. Buyer power allows retailers to absorb the decline in trade costs in the form of a higher markup, rather than passing it on to consumers. I find that a 10% reduction in tariff rates causes US domestic retail prices to decline by 4.3% on average for goods which are subject to buyer power among retailers, versus 7.2% for goods not subject to buyer power. Furthermore, I show that for products that are subject to buyer power, the trade cost reduction can be completely absorbed by retailers' markup adjustment when the concentration in the retail sector exceeds a certain threshold. For products that are not subject to buyer power, on the other hand, lower tariff rates lead to lower consumer prices at any level of concentration in the retail sector. Chapter 2 studies the differential effect of trade liberalization among 23 Chinese provinces during years 2001-2003. During these years, China lowered its tariffs substantially as it joined the World Trade Organization (WTO). The empirical results suggest that consumer welfare gains from trade are not distributed equally. I find that provinces which are more exposed to globalization than other provinces tend to pass through more of the decline in tariff rates to consumer prices. Provinces with higher FDI and imports compared to Regional Domestic Product (RDP) pass through more of the decline in tariffs to consumer prices, and coastal provinces pass through more of the reduction in tariffs than inland provinces. Also, tariff pass-through is lower on average when Chinese state owned enterprises import than when foreign owned enterprises import. I further show that pass-through increases when provinces become more exposed to globalization. This effect is pronounced for Chinese imports through state owned firms. Chapter 3 answers the question why estimates of tariff rate pass-through (TRPT) and exchange rate pass-through (ERPT) usually differ in empirical studies. I argue that estimates of ERPT are lower than TRPT because exchange rate changes are perceived as transitory while tariff changes are viewed as permanent by economic agents. I adopt Rodriguez-Lopez (2006) and examine how pass-through differs when depreciation is perceived as temporary or permanent. The central result is reached by manipulating the hypothesized persistence of the exchange rate Markov process. A temporary change in the exchange rate leads to an ERPT that is one-half the size of ERPT that would have occurred under a permanent shock.