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Considers the conceptual underpinnings, the objectives and instrument of regional social protection (SP) strategy used by the World Bank (WB) in its regional development projects. Activities covered by the lending and non-lending schemes by the WB in the SP area; Analysis of the risks arising from the globalization of trade in goods, services, and factors of production; Advantages to using social risk management as the analytical framework for SP; Reasons for the World Bank's concern with social risk management.

Abstract: This paper reflects on the career contributions of Professor Chris Milner to the literature on international trade and economic development. As such, it not only provides an overview of a life's work, but also sets the context for the nine papers which follow. All of these were specially written for this Special Issue of The World Economy, and all relate to different areas that Professor Milner worked in. [ABSTRACT FROM AUTHOR]

Presents abstracts of studies about economic development and trade, presented at a convention in Rome, Italy in September 1965. 'A Factor Analysis of the Interrelationship Between Social and Political Variables and Per Capita GNP,' by Irma Adelman; 'An Almost Consistent Intertemporal Model for India's Fourth and Fifth Plans,' by Joel Bergsman.

Fair trade has never been more popular, with worldwide sales soaring. This editorial to the special issue of Sustainable Development on ‘Fair trade, business and sustainable development’ introduces the topic and papers within the special issue. It discusses the success of the ‘fairtrade’ brand and the impacts of fair trade schemes as well as the future of the brand. The paper concludes that this alternative trading system does work in practical terms and in helping marginalized producers in developing countries. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment. [ABSTRACT FROM AUTHOR]

This paper surveys the theoretical and empirical literature on the effects of the real exchange rate (RER) on international trade, economic development and growth. We summarize the main conceptual issues, briefly discuss the relevance of the RER as an instrument of development policy, provide an overview of the macroeconomic and microeconomic mechanisms that link the RER to trade and long‐run growth and development, analyse the challenges – especially the disconnect between theory and data – that often arise in empirical applications, and discuss new avenues for future research. In the process, we present some updated estimates and illustrative figures. The mechanisms through which the RER influences long‐run growth and structural change remains a promising area of research and the relevance of individual channels in different contexts deserves much more careful investigation. Greater data availability should help fill some of these gaps in our understanding. [ABSTRACT FROM AUTHOR]

This article provides the theoretical and empirical context to the papers contained in this special issue. We provide background on the recent developed country financial crisis and perspective via a review of prior shocks and crises. The paper then considers the transmission mechanisms through which economic crises can affect economies and individuals in the developing world. The linkages centre on trade, capital flows and remittances. This section also critically surveys the literature concerning the macroeconomic and microeconomic impact of such crises on developing countries. Finally, we review the papers that comprise the special issue, before providing some policy conclusions. Copyright © 2013 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Efficient allocation of resources and transition towards cleaner sources of energy are among the key factors in minimizing the negative externalities arising from the growing dependency on fossil fuels. Moreover, environmentally benign trade policies are crucial due to the rapid expansion in global trade and comparative advantage. To explore the relationship between global trade and Consumption‐Based Carbon Emissions (CBCE) in China in the context of renewable energy consumption and energy efficiency from 1990 Q1 to 2020 Q4, this paper employs the dynamic Autoregressive Distributed Lags (Dynamic ARDL) model to evaluate the connection between international trade, renewable energy usage, energy efficiency, and CBCE, with the Kernel‐Based Regularized Least Squares analysis being used to determine the causal association. The findings reveal that GDP and imports are directly linked with CBCE in the long run, while exports, energy efficiency, and renewable energy consumption have a negative significant long‐run and short‐run influence on CBCE. In addition, exports help in the reduction of CBCE by sharing and adapting environmentally friendly technologies adopted in, for example, renewable energy and ecological advancements. Renewable energy promotes the quality of the environment, which is attributable to the performance of renewable energy and environmentally friendly technologies that directly stimulate the reduction of CBCE emissions. By cutting CBCE, energy efficiency tends to boost environmental quality. The research findings have noteworthy policy implications; trade enhances the quality of environment by introducing lower energy intensive production methods and technology that support sustainable development. As a result, this study advocated quite stringent policies in terms of aligning international trade orientation with environmental quality policy in China. Furthermore, energy efficiency policies are required to lower CBCE by focusing on high‐energy‐using industries and providing alternative clean energy sources. [ABSTRACT FROM AUTHOR]

Trade in services has become the most dynamic segment of international trade. This paper examines the competitiveness of services exports in sub‐Saharan Africa (SSA) for the period 2005–2019 using revealed comparative advantage approach. The analysis shows that although SSA has a comparative advantage in traditional services, that is travel and transport, it has remained less competitive compared to other regions globally, and its share of world services exports is negligible. Moreover, SSA has not developed competitiveness in modern commercial services and, hence, continue to perform poorly. The results suggest only Nigeria and Kenya have so far developed comparative advantage in financial services. SSA's dismal performance of services exports can be attributed to various factors such as technological and infrastructure constraints, protectionist and regulatory barriers. There is need to rethink strategies of revamping and diversifying services esports to spur Africa's trade and economic transformation. These include leveraging the opportunities availed by the African Continental Free Trade Area (AfCFTA). Unexploited opportunities include Africa's rich cultural diversity, recreation, business and conferencing services. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to propose a model where trade has a direct and positive impact on growth rate of two trading nations beyond the level effect. We use the idea of virtual trade in intermediates induced by non-overlapping time zones and show how trade can increase the equilibrium optimal rate of growth. In this structure the trade impact goes beyond the level effect and directly causes growth. Typically standard models of trade cannot generate an automatic growth impact. Virtual trade may allow production to continue uninterrupted in separated time zones such as between the USA and India, and that can lead to higher growth for both countries. Later we extend the model to incorporate the accumulation of skills which becomes necessary for sustaining steady state growth. [ABSTRACT FROM AUTHOR]

In a distinguished career spanning more than four decades, Jagdish Bhagwati has made numerous contributions to both trade theory and trade policy analysis. The current paper focuses on Bhagwati's major contribution to the ongoing debate surrounding the influence of trade liberalisation upon economic development and its potential to alleviate poverty in the world's poorest economies. In order to highlight Bhagwati's contributions in these fields we focus on the arguments developed in two of his numerous landmark publications; first his seminal 1964 paper on the Pure Theory of International Trade and, second, his 2004 book entitled In Defense of Globalization. Although separated in time by some four decades we argue that these two publications, despite their very different characters, each demonstrate beyond doubt the significance of Bhagwati's work in improving our understanding of the true nature of international trade and its potential to address questions of global poverty. [ABSTRACT FROM AUTHOR]

This paper surveys developments in the literature on trade and inequality over the past decade. I first discuss the impact of trade on nominal income inequality, with a focus on firm heterogeneity and the role of mobility frictions. Then, I provide an overview of the literature on the redistributional role of government in an open economy. Finally, I assess the current state of studies on how trade affects real income inequality through the expenditure channel. [ABSTRACT FROM AUTHOR]

Abstract: This paper looks at the link between the quality of economic institutions and innovation, and innovation and growth. We construct a measure of the innovation content of individual manufacturing industries and show that countries with stronger economic institutions specialize in more innovation‐intensive industries. Our results also provide evidence that industries involving higher levels of innovation grow relatively faster in countries with better economic institutions. The results suggest that innovation is an important channel through which higher quality economic institutions contribute to better growth performance in the long run. [ABSTRACT FROM AUTHOR]

It has been 30 years since Central Asian '‐stan' countries, namely, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, declared their independence in 1991. The Republics have chosen various transition paths from centrally planned to the market‐based economic system. The research found that Central Asian leaders' protectionist policy, on top of the landlocked geographical environment, made trade costly, rendering these countries further isolated. Consequently, economic development slows down, unemployment increases and poverty rate extremes. Eventually, the isolated region (relatively, excluding Kazakhstan) is imprisoned in a low‐income trap and framed into a vicious circle. As a solution for tackling high‐trade costs in the region, this paper utilises the Global Trade Analysis Project (GTAP) Computational General Equilibrium (CGE) modelling to simulate the impacts of implementing policy‐targeted scenarios. The study presents that tariff reduction/elimination and trade facilitation policies could flourish the region by bringing significant economic welfare and robust GDP growth. The trade facilitation scenarios impact the region's economy much more positively than do tariff liberalisation scenarios. [ABSTRACT FROM AUTHOR]

The serial underperformer of the region, Myanmar's economy is largely without the institutions and qualities necessary to achieve genuine economic growth. This paper explores the fundamentals of Myanmar's economy, from a perspective that emphasizes policy and institutional failure as the principal determinants of the country's present circumstances. The paper explores Myanmar's economy in a multifaceted way, examining concerns over economic growth, public finances, monetary and financial policies, corruption, and international trade. Notwithstanding the change in the form of Myanmar's governing institutions following the elections of November 2010, the paper concludes pessimistically as to the likelihood of meaningful economic reform in the foreseeable future. [ABSTRACT FROM AUTHOR]

Abstract: This paper addresses two research issues to which Chris Milner has contributed: the role of trade policy in economic development, and the particular development case of Mauritius. On the first issue, the focus is on understanding why so few low‐income countries, especially in Africa, have achieved a sustained level of export diversification. The paper argues that the standard “Washington Consensus” advice on trade policy placed too much emphasis on liberalisation alone and neglected the important role of government policy, in particular the potential to use targeted input subsidies to support the development of export sectors. Mauritius is then discussed as an example of relatively successful subsidy policies that enabled diversification of exports: indeed the only African country to achieve this in a sustained manner. Subsidies are not advocated as a panacea, and it is recognised that they are not always feasible or effective, but they can be part of an export diversification strategy that supports economic growth. [ABSTRACT FROM AUTHOR]

Abstract: A major concern for developing economies is a dependence on commodities when their prices are volatile as a major change in the international commodity price can have important implications for economic growth. While some cross‐country studies exist, there is lack of country specific studies that take into account the different characteristics of low‐income economies. This paper contributes to the growing literature by considering the case of Malawi and the macroeconomic impact of price shocks in its major export crop of tobacco. Using a structural vector autoregression (SVAR) approach on quarterly Malawian data from 1980:1 to 2012:4, the paper establishes that a positive tobacco price shock has a significant positive impact on the country's gross domestic product, decreasing consumer prices and inducing real exchange rate appreciation. The results are robust to alternative specifications of a SVAR on difference stationary data and cointegrating VAR. The cointegrating VAR confirms the existence of a long run‐relationship among the variables and causality that runs from tobacco prices. [ABSTRACT FROM AUTHOR]

Services constitute a significant part of GDP and overall trade in modern economies, but little is known about the magnitude of its obstacles. Great effort has been made to establish measures of services trade frictions on the part of the Organization of Economic Cooperation and Development (OECD) and the World Bank. A customary way of using these measures is to employ them in log‐linear regressions to gauge their effect on services trade flows. This may be problematic to the extent that these measures do not capture ad valorem (tariff type price increasing) trade costs. Hence, it is natural to believe that available services trade cost measures may have a nonlinear impact on services trade flows. The present paper documents that this is the case, using nonparametric estimates to quantify the direct impact of important trade cost measures captured by the Services Trade Restrictiveness Index of the OECD on cross‐border services transaction costs and trade. [ABSTRACT FROM AUTHOR]

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This paper surveys the empirical literature on export and import diversification and its linkages with growth. We review widely used measures of diversification and the evidence about their evolution focusing on how export diversification relates to trade liberalization and economic development. We also discuss the linkages between trade diversification and productivity at the firm and industry level, highlighting new advances on the linkages between import diversification and productivity. [ABSTRACT FROM AUTHOR]

Recent years have seen a sharp growth in the number of regional agreements both concluded and under negotiation. This paper attempts to document and discuss this growth focusing on US, EU, Chinese, Indian and other agreements. The form, coverage and content of these agreements vary considerably from case to case. The paper asks why so many, why the variation in form, and why the recent acceleration. Implications for the trading system are discussed in a final section. [ABSTRACT FROM AUTHOR]

Applying Burgstaller's Ricardian two-sector growth model to the two-country open economy, this paper shows that the long-run Heckscher–Ohlin theorem holds also in a Ricardian world. In addition it is shown that, if two Ricardian countries that are different only in their demand parameters open trade, comparative advantage and the corresponding trade pattern at trade opening continue in the long run after the opening of trade. [ABSTRACT FROM AUTHOR]

The paper investigates the impact of Asia's demand rebalancing and supply‐side productivity changes on long‐term economic growth in Asia and worldwide. Results from a panel vector autoregression model show that a productivity–neutral demand‐rebalancing shock has no permanent effect on Asian output, whereas labour productivity shocks have significant, positive and permanent effects. Simulations using a global intertemporal multisector general equilibrium model suggest that labour productivity shocks increase the foreign GDP over time, but rebalancing shocks have a negative international spillover effect. In addition, labour productivity shocks help in rebalancing. Structural reforms promoting labour productivity growth along with rebalancing policies across Asia can achieve higher economic growth worldwide. [ABSTRACT FROM AUTHOR]

This paper serves as an introduction to this special issue on the use of multiregional inputoutput modeling in assessments of natural resource use and resource use efficiency. Due to globalization, growth in trade has outpaced growth in global gross domestic product (GDP). As a consequence, impacts of consumption of a country increasingly take place abroad. Various methods have been developed to perform so-called footprint analyses. We argue that global multiregional input-output (GMRIO) analysis has the largest potential to provide a consistent accounting framework to calculate a variety of different footprint indicators. The state of the art in GMRIO has, however, various shortcomings, such as limited sector and regional detail and incomplete extensions. The work presented in this special issue addresses a number of such problems and how to possibly overcome them, focusing on the construction of a new GMRIO database (EXIOBASE V3). This database includes long time series in both current and constant prices, a high level of product and sector detail, a physical representation of the world economy, and allows analyzing which footprints out of the many possible indicators provide most information for policy making. Various options for empirical analyses are presented in this special issue. Finally, we analyze how GMRIOs can be further standardized and gradually moved from the scientific to the official statistical domain. [ABSTRACT FROM AUTHOR]

Using a North- South model of heterogeneous firms, the paper investigates the effects of the financial development of the South on the choice of international entry mode (export vs foreign direct investment [ FDI]) of Northern firms. Such development facilitates the entry of local firms and thus intensifies product market competition. As a result, the intensive margins, extensive margins and total sales from export or FDI of Northern firms are all reduced. The paper provides conditions that determine whether export or FDI is affected more significantly. The results generate empirically testable hypotheses. [ABSTRACT FROM AUTHOR]

This paper examines the dynamic implications of international trade in a two-sector overlapping-generations economy with endogenous growth. It analyses the global dynamics of this model for both a closed economy and a two-country world economy. It shows how international trade can cause the world economy to sort itself out into groups of fast and slow-growing economies and can also cause one country to catch up and overtake another's growth rate. U thus provides theoretical support for empirical papers which find that the world distribution of income is diverging. [ABSTRACT FROM AUTHOR]

The multilateral trading system, first established formally in 1947 with the goal of bringing about sustainable peace and greater prosperity through increased cross‐border commerce underpinned by globally agreed upon rules, has contributed significantly to economic development and reduced poverty. However, as the global trading system enters the 2020s it cannot rely on past success and must adapt to a rapidly changing world, one that requires both more and different kinds of inclusion in order to address new challenges around inequality and global economic and geopolitical shocks. To address these new challenges the World Trade Organization (WTO) must be updated and reformed by its member governments, who must also recognise that many current global challenges have linkages across trade, tax, environment, and health areas which require increased coordination across global bodies. Further, the challenges of growing domestic inequality in many countries, while a domestic policy concern, will have significant impact on the political will to undertake the necessary updating and reform of the multilateral trading system and the required enhanced coordination with other international bodies and agreements. The recent positive outcomes from the WTO's 12th Ministerial Conference in June of 2022 show that global cooperation on trade issues is possible. Building on this success, the WTO can reshape itself to be fairer and more resilient and better able to address current global and domestic challenges. [ABSTRACT FROM AUTHOR]

This study explores the potential for South Africa to become an engine for intra‐regional trade and industrial development in Southern Africa. It focuses on new backward linkages that can be created from South African exports of final products to producers of intermediate inputs in other Southern African countries. We do so by identifying South Africa's lead products, where it has formed its own GVCs, and, in turn, earmarking intermediate inputs used in the production of these lead products. Using Revealed Comparative Advantage and Unit Cost analysis, we identify Southern African countries that could supply the identified imported intermediate inputs more competitively than South Africa's existing partners and kickstart regional integration. We explore issues around the nature of linkages, supplier capabilities and industrial policies in the region, with special reference to the identified product value chains. Focusing on the agricultural sector—a key regional priority with immense potential for industrial growth and large‐scale employment—we also identify existing agricultural lead products in South Africa, and the 'new markets' to which South Africa can export. [ABSTRACT FROM AUTHOR]

Japan is known to have an exceptionally low level of inward foreign direct investment (FDI). The promotion of inward FDI is one of the policy goals of Abenomics structural reforms. This present paper studies the accumulation of Japan's inward FDI stock during the first 3 years of Abenomics (2012-2015), and finds no evidence that Japan's inward FDI stock increased more than the trend before Abenomics started would have predicted. A comparison of the main policies for promoting inward FDI that have been implemented to the real and perceived impediments to inward FDI reveals that it may be advisable to shift the emphasis of the policy to address more regulatory and administrative issues and to reduce the cost of doing business in Japan. [ABSTRACT FROM AUTHOR]

Abstract: Empirical results on the links between trade openness and economic growth often suggest that, in the long run, more outward‐oriented countries register better economic growth. However, a similar level of trade openness can hide different types of trade structures. The aim of this paper was to enrich the way of measuring trade openness taking into account two different dimensions of countries’ integration in world trade: export quality and export variety. Based on the estimation of an endogenous growth model on a panel of 169 countries between 1988 and 2014 using a generalised method of moments estimator, our results confirm that countries exporting higher quality products and new varieties grow more rapidly. More importantly, we find a non‐linear pattern between the export ratio and the quality of the export basket, suggesting that openness to trade may impact growth negatively for countries which are specialised in low‐quality products. A non‐linear relationship between export variety, the export ratio and growth is also found, suggesting that countries increasing their exports will grow more rapidly after reaching a certain degree of the extensive margin of exports. [ABSTRACT FROM AUTHOR]

Anderson and vanWincoop developed what has become the standard framework for framing and interpreting empirical work using the gravity model. Their framework relies heavily on an assumption of symmetry among countries. For issues related to North-South trade, this assumption is problematic. In this paper, we develop an asymmetric extension of the Anderson-vanWincoop framework appropriate to the analysis of North-South trade, where Northern countries produce differentiated goods and Southern countries homogenous ones. In addition, we use an appropriately extended version of Baier and Bergtrand and Taylor linear expansion - thus permitting its estimation using (good old) OLS. The result is an empirical model that (i) is better suited to the analysis of North-South trade, (ii) is easy to estimate and compute comparative statics, not requiring a customised NLS routine and, given the way the South is included, (iii) provides a simple explanation of zero trade flows between some country pairs, a fact still not fully explained in the literature. As an illustration of its use, we examine the empirical link between foreign aid and trade. [ABSTRACT FROM AUTHOR]

Small Island Developing States generally adopt diversification as their primary development strategy, often with little success. Nevertheless, there is no empirical study specifically focusing on the pattern of diversification of these countries in relation to their development. The objective of this paper was to study the export diversification pattern by the intensive (a more equally spread export basket) and extensive (an increase in new export lines) product margin of 21 Caribbean countries in relation to their level of development using panel data. The results show that despite their limited ability to diversify, Caribbean countries, as has been found for other parts of the world, first diversify and subsequently respecialise though at a substantially lower level of income than other countries and that the intensive margin plays a greater role in this process. [ABSTRACT FROM AUTHOR]

This paper studies the effectiveness of the implementation of trade facilitation measures in member countries of the Association of Southeast Asian Nations (ASEAN). We evaluate trade facilitation performance and indicate trade facilitation needs and priorities that vary between ASEAN members. In particular, we examine logistics-related costs in ASEAN and whether the current level of logistics-related costs could be a burden or an advantage for ASEAN countries. We also identify critical barriers that have impacts on logistics services related to foreign investment and customs across ASEAN. Finally, we propose recommendations for the harmonisation of logistics policies in ASEAN countries aimed at the development of the ASEAN Economic Community. [ABSTRACT FROM AUTHOR]

This paper investigates quantitatively the trade-enhancing effect of regional trade agreements (RTAs) under the General Agreement on Trade in Services Article V (services RTAs) by applying a gravity regression analysis to four major services sectors - financial, business, communication and transportation services - while controlling for both country-specific and time-varying importer and exporter fixed effects. The regression analysis covers bilateral imports in services consisting of 20,986 country-pairs in total over six years (2000-05). Our results indicate that sector-specific trade-creating effects of services RTAs are significantly positive without incurring trade-diverting effects, excluding transportation services. Moreover, we find that there is a significant cumulative effect of services RTAs, excluding communication services and a complementary relationship between goods and services imports. In addition, the trade-creating effect of services RTAs is stronger between developed members compared with between developed and developing countries. [ABSTRACT FROM AUTHOR]

China's relationship with Africa has grown exponentially over the last decade with US$95 billion in bilateral trade in 2008 and US$5.4 billion of Chinese investment in Africa for the same year. The growth of Sino-African relations also has an impact on the role of traditional development partners in Africa in particular in the aftermath of the 2008 financial crisis, which has already led some traditional development partners to reduce their aid budgets and subsequently their Official Development Assistance (ODA) flows to Africa. The objective of this paper is to analyse different development cooperation modalities in Africa of traditional development partners and China. This requires identifying trends in aid, debt relief, general budget support, trade, preferential trade access, and investment flows of both traditional development partners and China. The paper advocates that complementarities can be built between these development modalities on a national, regional and global level. This would enhance development effectiveness, increase efficiency and create win-win situations which would be beneficial to African countries, China and traditional development partners. [ABSTRACT FROM AUTHOR]

This paper takes a fresh look at Africa's growth experience by using the Bayesian model averaging (BMA) methodology. BMA enables us to consider a large number of potential explanatory variables and sort out which of these variable can effectively explain Africa's growth experience. Posterior coefficient estimates reveal that key engines of growth in Africa are substantially different from those in the rest of the world. More precisely, it is shown that mining, primary exports and initial primary education exerted differential effect on African growth. These results are examined in relation to the existing literature. Copyright © 2008 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

There has been a long-held belief that there is an association between economic growth and increased levels of international trade. However, more recent work has questioned this hypothesis and the re-opening of the debate has identified two key areas of contention. One is the extent to which the effects of openness are conditional on factors omitted from the core regression relationship and hence how the hypothesis is tested. The other is the meaning and measurement of openness and liberalisation. This paper addresses both these areas by exploring the nature of heterogeneity in growth performance among liberalising countries using a difference-in-difference approach. The results show that, while in aggregate there appears to be a positive but small impact of trade liberalisation on growth, this masks a huge range of responses. Empirical analysis of this heterogeneity shows that a one-size-fits-all policy is not necessarily the most effective, and suggests a case-by-case approach is more appropriate. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to analyse the causality between exports and GDP of Namibia and to evaluate the relationship of these variables for the period 1970 to 2005. Time-series econometric techniques (Granger causality and cointegration) are applied to test the hypothesis of a growth strategy led by exports. It tests whether export Granger causes GDP, or whether the causality runs from GDP to exports, or if there is bi-directional causality between exports and GDP. The results revealed that exports Granger cause GDP and GDP per capita. This suggests that the export-led growth strategy through various incentives has a positive influence on growth. [ABSTRACT FROM AUTHOR]

Does the effect of international trade on income growth depend on the economy’s level of development? More specifically, is trade more beneficial to lower income economies? Does trade contribute to a smaller international income inequality? The present paper seeks to answer these questions by employing the empirical model of Frankel and Romer (1999 ), which shows trade increases income growth in a cross section of 150 countries. We find evidence in support of the hypothesis that international trade benefits the lower income economies more than it benefits the higher income economies. This finding is robust in the presence of control variables including distance from the equator and institutional quality. [ABSTRACT FROM AUTHOR]

This paper reviews the historical evidence on the relationship between globalisation and economic growth. Divergence in the growth of income and industrialisation in the twentieth century is documented but it is also noted that international income inequality appears to have decreased since about 1870 and that long-run trends in the Human Development Index are much less pessimistic about the experience of developing countries. It is argued that trade liberalisation has been good for growth on average but that successful capital liberalisation requires high institutional quality and that the developmental state may have an important role to play in the early stages of development. The recent claim by Robert Lucas that the 21st century will see a massive reduction in income inequality across countries in a globalised world economy is sceptically discussed in the context of empirical evidence that bad institutions are often persistent and that geography is still a major factor in explaining international income differences. [ABSTRACT FROM AUTHOR]

The paper investigates whether mixed trade strategies of import substitution and export promotion, if permanently or temporarily applied, can generate pro-tradables movements in the real exchange rate. Static and dynamic general-equilibrium modeling with a nontradables sector and alternative types of tradables is used to explore real exchange rate responses to uniform and nonuniform trade policy interventions. The paper shows that uniform, permanent interventions are neutral, having no impact on the equilibrium real exchange rate. The real exchange rate effect of temporary uniform interventions is, however, in general ambiguous when prices and incomes are fully endogenized. The breakdown of Lerner symmetry or of neutrality following uniform temporary interventions does not mean that intended promotion of tradables necessarily results in a pro-tradables movement in the real exchange rate. [ABSTRACT FROM AUTHOR]

This paper first notes the importance of "one-cone" versus "multi-cone" equilibria in the Heckscher-Ohlin model of international trade, then asks whether economic growth in neoclassical growth models leads toward one or the other. The one-cone equilibrium arises with internationally similar factor endowments. It has a single set (cone) of relative factor endowments, within which countries diversify and have global factor price equalization (FPE) under free trade. The multi-cone equilibrium arises with larger factor endowment differences. It has FPE within cones, but not between them. The two configurations differ in important ways. The paper examines several neoclassical trade-and-growth models, distinguished by their assumptions about saving, asking whether factor endowments converge into a single cone. None of the models suggests convergence, while some strongly imply that countries will end up in different cones. This suggests a preference for the multi-cone version of the model. [ABSTRACT FROM AUTHOR]

This paper investigates the factors driving manufacturing growth accelerations in a sample of 134 developing countries over the period 1970 to 2014. We first identify growth acceleration episodes of manufacturing value added (MVA) by their year of initiation and according to a country's income classification. We then estimate a probit model to explain what factors predict these MVA growth accelerations. Our results show that human capital and institutions represent contextual factors that favor the growth of manufacturing, together with macroeconomic policies related to investment, and openness to foreign trade and capital. We also find that most of these factors not only foster episodic accelerations of industry, but they contribute as well to a sustained process of industrialization that characterized the process of economic growth of a few successful countries over the period 1970 to 2014. [ABSTRACT FROM AUTHOR]

This paper investigates how technical barriers to trade (TBTs) affect firm exports. The implementation of the "child‐resistance" decision (CR decision) in the EU offers an ideal quasi‐natural experiment to identify the causal effect of TBTs on firm performance. Using data on Chinese firms that exported cigarette lighters between 2004 and 2010, we show that firms exporting to the EU not only adjust their product quality to meet the requirements in the CR decision, but also upgrade their product quality in other dimensions. However, both the export value and export volume to the EU decline. At the same time, less productive exporters are forced to exit from the EU market. Lastly, heterogeneous effects of the CR decision are documented. [ABSTRACT FROM AUTHOR]

This paper studies the impact of market power on international commodity prices. I use a standard oligopoly model and exploit historical variations in the structure of the international coffee bean market to assess the impact of a cartel treaty on coffee prices and its global welfare consequences. The results suggest that the International Coffee Agreement ( ICA, 1965-89) raised its price by 75% above the Cournot-competitive level, annually transferring approximately $12 billion from consumers to exporting countries, and its lapse in 1989 explains four-fifths of the subsequent price decline, that is, the 'coffee crisis.' [ABSTRACT FROM AUTHOR]

Over the past decade, many papers have studied the effects of exchange-rate volatility on international trade, particularly at the bilateral level for large numbers of individual industries. This is necessary because the underlying theory is ambiguous and because earlier papers failed to uncover significant results at a higher degree of aggregation. This paper examines the case of Japan and Thailand over the period from 1970 to 2010. We find that slightly more than half of 117 export industries and 54 import industries are affected by volatility in the short run. In the long run, 6 export and 2 import industries are affected positively, and 22 export and 9 import industries are affected negatively. Small Japanese export industries are more likely to be negatively affected, while imports show no differences regarding industry size. In a sectoral analysis, we find some evidence that Japanese exports of manufactures and certain machinery and transport equipment might be relatively more affected by the exchange-rate risk. Raw material imports are least affected. These findings therefore suggest which industries might benefit most by a policy promoting a stable yen. [ABSTRACT FROM AUTHOR]

Recent years have seen a significant focus in the literature on growth and development on the idea that legal and political institutions are the key determinant of economic development. The main finding of this paper is that the focus on the primacy of legal and political institutions may be misplaced and that business-friendly economic policies (proxied for here by the World Bank's Doing Business indicator) are the key determinant of the level of income per capita. We find that a country's Doing Business rank dominates a range of measures of legal and political institutional quality as an explanatory variable for income per capita. We also find the Doing Business rank to be a key explanatory variable for economic growth and that previous findings assigning a significant role to educational attainment are not robust to the inclusion of this new indicator in growth regressions. [ABSTRACT FROM AUTHOR]

Empirical studies on international trade highlight the role of innovation on international exchange but do not capture the effect of technological innovation when unobservable common factors (UCFs) are considered. This paper examines the long‐run relationship between technological innovation and international exchange using panel data for eight African countries over the period 1981–2013. The non‐stationarity and cointegration between technological innovation, international exchange, public investment, real gross domestic income and foreign direct investment were examined, controlling for cross‐sectional dependence and heterogeneity between countries. The results suggest that technological innovation in Africa remains low after controlling for UCFs, while public investment, real gross domestic product and foreign direct investment have significant impact on international exchange. Moreover, the results from the homogeneous and heterogeneous estimates, with and without UCFs, show that ignoring UCFs is likely to bias the coefficients. These findings reveal that African countries should invest more in public infrastructures and research and development to upgrade their capability To play an active role in the international market. [ABSTRACT FROM AUTHOR]

In the light of the initiative of the West African Monetary Zone (WAMZ) to introduce a common currency by 2020, this paper investigates the intricacies of the business cycles synchronicity among the six countries. Given: (i) the rising importance of trade and cooperation with China; (ii) the consideration of the Euro as a potential anchor currency and a vehicle for trade with the Eurozone; and (iii) the importance of Nigeria as the largest country of the group and the main supplier of oil, we investigate the relative importance of these three major players in having their business cycles linked with the group. In addition, we investigate the underlying determinants of the business cycles synchronicity among the WAMZ countries on a pairwise basis. Results show a clear dominance of China's business cycle synchronicity with the WAMZ over Europe's and Nigeria's. Trade integration emerges as the key underlying factor of the common cycle observed. [ABSTRACT FROM AUTHOR]

Abstract: In this paper, the global tourism network (GTN) is studied in order to gain insight about its structure and the interactions between source and destination markets. To concentrate on the main source and destination markets for each country, only its top k inbound and outbound flows are considered. The distribution of these most important ties in international tourism seems to be scale‐free, with some occurrence of reciprocity, large transitivity, and high‐degree centralization. The GTN shows a clustered structure determined by geographical as well as trade and cultural factors. Each major global and regional power seems to have a certain tourism sphere of influence. The network has a small world character and a high degree of geographic homophily, with more links within continents than between continents. Exponential random graph models have been fit to explain the observed global structure of the network based on its local interactions, and a number of significant motifs have been identified. The picture that results is a GTN that emerges from superimposed local processes in which tourism flows between countries is determined from multiple independent individual decisions made at the local level. This insight that global tourism patterns are driven by local processes is a major contribution of this research and can help develop strategic plans and cooperation partnerships at the national and regional levels, involving private and public stakeholders and targeting specific source and destination markets. The indicators computed using network analysis of global tourism flows can also be used to complement and enrich the information provided by current tourism statistics. [ABSTRACT FROM AUTHOR]

Global multiregional input-output databases (GMRIOs) became the standard tool for tracking environmental impacts through global supply chains. To date, several GMRIOs are available, but the numerical results differ. This paper considers how GMRIOs can be made more robust and authoritative. We show that GMRIOs need detail in environmentally relevant sectors. On the basis of a review of earlier work, we conclude that the highest uncertainty in footprint analyses is caused by the environmental data used in a GMRIO, followed by the size of country measured in gross domestic product (GDP) as fraction of the global total, the structure of the national table, and only at the end the structure of trade. We suggest the following to enhance robustness of results. In the short term, we recommend using the Single country National Accounts Consistent footprint approach, that uses official data for extensions and the national table for the country in question, combined with embodiments in imports calculated using a GMRIO. In a time period of 2 to 3 years, we propose work on harmonized environmental data for water, carbon, materials, and land, and use the aggregated Organization for Economic Cooperation and Development (OECD) Inter-Country Input-Output GMRIO as default in combination with detailing procedures developed in, for example, the EXIOBASE and Eora projects. In the long term, solutions should be coordinated by the international organizations such as the United Nations (UN) Statistical Division, OECD, and Eurostat. This could ensure that when input-output tables and trade data of individual countries are combined, that the global totals are consistent and that bilateral trade asymmetries are resolved. [ABSTRACT FROM AUTHOR]