Search

Wine prices rose rapidly between 2001 and 2011 but have now stagnated. The growth phase could be explained by the increased demand from emerging markets, while the subsequent stagnation may result from the crowding effect caused by the entry of numerous new varieties onto the wine market. The generalised model of ideal variety proposed by Hummels and Lugovskyy combines these two elements, and focusing on French exporters, we find partial support for this explanation at the world level. A 1 per cent increase in GDP per capita (income effect) generated an increase in price of 1.13 per cent between 2001 and 2011. In contrast, a 1 per cent increase in market size (competition effect) reduced prices by 1.10 per cent over the same period. This paper goes further into the analysis of these effects by considering wine exports according to the mode of transport used and indirectly evaluates economies of scale when wine is exported by land, sea or air (via a gravity equation). Economies of scale are observed for transport by plane and ship but not for road. A 10 per cent increase in the value of wine exported by road (plane) leads to a rise (reduction) in transport costs of 0.5 per cent (19 per cent). [ABSTRACT FROM AUTHOR]

Since the mid-1990s and prior to the financial crisis external balances of systemically important economies widened significantly. This paper takes a long-run perspective and reviews the main determinants of widening global imbalances. To this aim, we first provide a set of newly derived statistical measures: while large external imbalances are not new in economic history, their persistence, their concentration on one economy (the United States) and the specific role of emerging market economies make the present episode rather unique. Second, we argue that the observed pattern of imbalances can be mostly understood as a result of various structural changes in the global economy, which have allowed a widening trend of external positions. Three main features set the most recent period apart from past episodes of growing external imbalances: (i) the emergence of new players, in particular emerging market economies such as China and India, which are quickly catching up with the advanced economies; (ii) an unprecedented wave of financial globalisation, with more integrated global financial markets and increasing opportunities for international portfolio diversification, also characterised by considerable asymmetries in the level of market completeness across countries; and (iii) the favourable global macroeconomic and financial environment, with record high global growth rates in recent years, low financial market volatility and easy global financing conditions over a long period of time, running until the outburst of the financial crisis during the summer of 2007. These structural changes that have been supplemented by cyclical or policy-induced factors ultimately facilitated the sudden, disorderly unwinding of global imbalances that is reflected in the current financial crisis. [ABSTRACT FROM AUTHOR]

Assessing accurately global economic conditions is a great challenge for economists. The International Monetary Fund proposes within its periodic World Economic Outlook report a measure of the global GDP annual growth, that is generally considered as the benchmark nowcast by macroeconomists. In this paper, we put forward an alternative approach to provide monthly nowcasts of the annual global growth rate. Our approach builds on a Factor‐Augmented MIxed DAta Sampling (FA‐MIDAS) model that enables: (i) to account for a large monthly database including various countries and sectors of the global economy and (ii) to nowcast a low‐frequency macroeconomic variable using higher frequency information. Pseudo‐real‐time results over the period 2010–16 show that this approach provides reliable and timely nowcasts of the world GDP annual growth on a monthly basis. [ABSTRACT FROM AUTHOR]

Discussions on how best to exit from global imbalances to create a more balanced world economy have ignored the impact on poor countries of proposals to redress these imbalances. This paper aims at filling that gap. It gauges the degree of renminbi (RMB) undervaluation; presents evidence on RMB undervaluation and China's GDP growth rate; surveys the role of the real effective exchange rate - both its level and its stability over time - for underpinning growth in developing countries, especially in large dual economies such as China and India; and finally, presents new evidence on growth linkages between China and poor countries for the last two decades and surveys literature on potential displacement effects of RMB appreciation. The analysis allows broad conclusions to be drawn about the potential developing-country beneficiaries and losers from various renminbi adjustment scenarios in the forthcoming years. [ABSTRACT FROM AUTHOR]

This paper aims to identify the main causes of bilateral trade flows in OECD countries. The specific features of the study include the explicit introduction of R&D and FDI as the two important explanatory variables, conduct of unit root tests in the panel data framework and careful consideration of endogeneity. The main findings are that the levels and similarities of market size, domestic R&D stock and inward FDI stock are positively related to bilateral trade, while the distance, measured by both geographical distance and relative factor endowment, between trade partner countries has a negative impact. These findings lend support to new trade, FDI and new growth theories. [ABSTRACT FROM AUTHOR]

China's international trade flows have increased by 500 per cent since 1992, far outstripping GDP growth. Likewise tertiary education enrolments have increased by 300 per cent. We simulate these changes using a multi-sector growth model of the Chinese and USA economies. A decade of trade biased growth in China is found to raise USA GDP by approximately 3-4.5 percentage points and has a large impact on the demand for tertiary education in China. Despite these positive effects of growth, the results suggest that the expansion of China's education sector per se has practically no long-run impact on the USA economy. [ABSTRACT FROM AUTHOR]

Australia and Pacific Island countries (PICs) have maintained an ongoing trade and economic relationship for several years. The determinants of trade between Australia and PICs are examined using a gravity model by utilising time-series cross-country data for the period 1981 to 2005. The empirical findings indicate that imports by PIC from Australia are significantly determined by PICs’ population and their per capita GDP. The results also suggest that PICs’ exports are significantly determined by PICs and Australia's population, PICs’ infrastructure (telecommunications) and the distance to Australia. Consistent with the findings of other studies using the gravity model, distance is found to be a friction to PICs’ exports to Australia. While this study identifies factors influencing PICs’ trade with Australia, a more substantial issue for the governments and trade policy makers in PICs is to look into the generally disappointing long-term trade performance. From a policy perspective, PICs would need to seriously look at increasing their export potential. [ABSTRACT FROM AUTHOR]

The article discusses currency unions in Africa and discusses the impact of trade effect substantial on currency unions. It mentions the working of African Union (AU) with several regional groupings including ECOWAS, COMESA and SADC for creating currency unions. It also mentions the increase in gross domestic product (GDP) of Europe.

Trade openness, popularly measured as ( X + M)/ GDP in the hundreds of studies published to date, consistently considers the world's biggest trading countries such as the USA, the UK, Japan and Germany to be closed economies, irrespective of the data set used. This study suggests a composite trade share measure that more completely reflects reality by combining two important dimensions of trade openness: trade share and the relative importance of a country's trade level to total world trade. Robustness tests support the new proposed measure in lieu of the conventional measure of openness and suggest that the latter may not only be incomplete but may also overstate the impact of trade on such things as income and the environment. [ABSTRACT FROM AUTHOR]

Food miles measure the distance food travels to reach consumers' plates. Although substituting local food for imported produce will not necessarily reduce greenhouse gas (GHG) emissions, the food miles movement is widely supported by consumers and import-competing producers, especially in some parts of Western Europe. We investigate the economic implications of food miles preference changes in the UK, France and Germany on other nations using an economy-wide model. Among the regions we consider, New Zealand is the most distant from Western Europe and Madagascar and Malawi export the most agro-food products relative to GDP, so food miles movements have the largest impacts on these regions. When there is a linear relationship between distance and preference changes, food miles campaigns decrease welfare in New Zealand, Madagascar and Malawi by 0.30, 0.12 and 0.28 per cent, respectively. When there is a preference shift away from imported food unrelated to distance, proportional welfare losses in the three countries are, respectively, 0.11, 0.08 and 0.24 per cent. With the exception of New Zealand, these findings indicate that some of the world's poorest nations will suffer the most from European food miles lobbying. We conclude that food miles campaigns will increase global inequality without necessarily improving environmental outcomes. [ABSTRACT FROM AUTHOR]