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Abstract: This paper presents a framework to assess the relative importance of three key sources of productivity growth that international trade research focuses on: (1) inter‐industry specialization; (2) intra‐industry reallocation of resources across heterogeneous firms; and (3) technological progress. We illustrate how to apply the framework by deciphering the productivity dynamics of the Swiss manufacturing industry. We find that intra‐industry reallocations are the most important source of growth in aggregate total factor productivity, spurred by the productivity growth of large, incumbent firms and the entry of new firms. Inter‐industry specialization and general technological progress, nevertheless, remain important supplementary sources of productivity growth. [ABSTRACT FROM AUTHOR]

This paper examines linkages between international trade, environmental degradation, and economic growth in a dynamic North–South trade game. Using a neoclassical production function subject to an endogenously improving technology, North produces manufactured goods by employing labor, capital, and a natural resource that it imports from South. South extracts the resource using raw labor, in the process generating local pollution. We study optimal regional policies in the presence of local pollution and technology spillovers from North to South under both non-cooperative and cooperative modes of trade. Non-cooperative trade is inefficient due to stock externalities. Cooperative trade policies are efficient and yet do not benefit North. Both regions gain from improved productivity in North and faster knowledge diffusion to South regardless of the trading regime. [ABSTRACT FROM AUTHOR]

The paper obtains new results about absolute and comparative advantage, by introducing international technological differences into the three–sector Findlay–Komiya and two–sector Oniki–Uzawa–Stiglitz models of open–economy growth with optimal saving. For example, if a country has the same Hicks–neutral advantage in all industries, it exports the capital–intensive tradable, even though the technological advantage is only absolute rather than comparative. Alternatively, even a small comparative advantage in some good is sufficient for the advanced country to export this product, regardless of relative factor supplies. In either case, the fundamental reason for trade is technological superiority rather than factor abundance. [ABSTRACT FROM AUTHOR]

The explosive growth of Chinese trade may be due to international production fragmentation, but few have assessed these phenomena together, in part, because it is difficult to measure the vertical specialization (VS) of China's trade. Unique features of China's processing trade cause both identification of imported inputs and their allocation across sectors to vary by trade regime. This paper estimates the VS of Chinese merchandise exports, addressing these two challenges. A new method to identify Chinese imported inputs is developed, and used to calculate VS by sector and destination. VS estimates based on the official Chinese input-output table are contrasted with those based on a split table, capturing processing and normal exports separately. Last, the paper tests whether Chinese 'export sophistication' can be explained by VS. [ABSTRACT FROM AUTHOR]

The paper surveys the agenda needed to restore noninflationary growth in industrial countries. The role of fiscal policy as short-run stimulus both on the spending side and on the tax side is discussed. The author comments on trade, specifically the new trade round, and international finance. Long-run fiscal imbalances due to aging are analyzed. The role of fiscal institutions such as the European Growth and Stability Pact, the Japanese bad-loan problem, and structural problems are put into the perspective that advanced economies should nurture their reforms globally so as to provide successful examples of reforms and prove helpful trading partners. [ABSTRACT FROM AUTHOR]

I investigate the long-run implications of trade and technology diffusion through trade, when firms are heterogeneous and trade is costly. This paper integrates firm heterogeneity and trade into a product innovation growth model from endogenous growth theory. I find that although exposure to trade increases average productivity, it has an ambiguous effect on economic growth and consumer welfare. [ABSTRACT FROM AUTHOR]

This paper investigates the role played by emerging Asia in the emergence and evolution of the global trade imbalances. Based on simulations in a general-equilibrium model of the world economy, we find that a productivity slowdown in the nontradable sector of these economies in the second half of the 1990s fits regional macroeconomic developments relatively well, but has limited spillover effect to the United States trade balance. In contrast, an increase in the desired level of emerging Asia net foreign assets starting in 2001 not only fits regional developments relatively well, but also has a significant spillover effect to the United States. [ABSTRACT FROM AUTHOR]

Presents information on a study which investigated the impact of Uruguay Round Agreement on the world economy. Methodology; Characterization of the Uruguay Round; Results; Conclusion.

Aid for trade increases a recipient's public services, which lower its import and export transport costs. Formulating a two-country endogenous growth model, we obtain two main results. First, a permanent increase in the donor's aid/gross domestic product (GDP) ratio raises the steady-state growth rate as well as both countries' long-run fractions and cost shares of imported varieties if and only if it lowers the product of transport costs. Second, under a plausible condition, there exists a unique interior growth-maximizing aid/GDP ratio. These results are robust to alternative specifications for congestion and stock-flow nature of public goods. [ABSTRACT FROM AUTHOR]

Existing evidence suggests that protectionist activity since the financial crisis has been muted, raising the question whether the historically well-documented relationship between growth, real exchange rates and trade protectionism has broken down. We use a novel and comprehensive dataset that stretches beyond the traditionally considered tariff and trade defense measures to study the responsiveness of trade policies to business cycles and price competitiveness in the time period since the financial crisis. We find that the specter of protectionism has not been banished. Countries continue to pursue more trade-restrictive policies when they experience recessions and/or when their competitiveness deteriorates. Our results suggest that the global economy continues to be exposed to the risk of a creeping return of trade protectionism. [ABSTRACT FROM AUTHOR]

Focuses on a study which analyzed the relationship between economic growth, industrialization and international trade in a two-sector endogenous growth model. Features and properties of a closed economy; Analysis of an economy under free trade; Information on a economy which is completely specialized in the production of the agricultural good.