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We show that relaxing the assumption of CES preferences in monopolistic competition has surprising implications when trade is restricted. Integrated and segmented markets behave very differently, the latter typically implying a form of reciprocal dumping. Globalization and lower trade costs have very different effects: the former reduces spending on all existing varieties, the latter switches spending from home to imported varieties; in the plausible case where demands are less convex than CES, globalization raises firm output whereas lower trade costs reduce it. Finally, calibrating gains from trade is harder. Many more parameters need to be calibrated than in the CES case, while import demand elasticities are likely to overestimate the true elasticities, and so underestimate the gains from trade.

We develop a multi-country, multi-sector trade model with labor market frictions and equilibrium unemployment. Trade opening leads to a reduction in unemployment if it raises real wages and reallocates labor towards sectors with lower-than-average labor market frictions. We estimate sector-specific labor market frictions and trade elasticities using employment data from 25 OECD countries and worldwide trade data. We then quantify the potential unemployment and real wage effects of implementing the Transatlantic Trade and Investment Partnership (TTIP) or the Trans-Pacific Partnership (TPP), and of eliminating trade imbalances worldwide. The unemployment and real wage effects work in conflicting directions for some countries under some trade regimes, such as the US under TTIP. We introduce a welfare criterion that accounts for both effects and splits such ties. Accordingly, US welfare is predicted to decrease under TTIP and increase under TPP.

We analyze forecasts of consumption, nonresidential investment, residential investment, government spending, exports, imports, inventories, gross domestic product, inflation, and unemployment prepared by the staff of the Board of Governors of the Federal Reserve System for meetings of the Federal Open Market Committee from 1997 to 2008, called the Greenbooks. We compare the root mean squared error, mean absolute error, and the proportion of directional errors of Greenbook forecasts of these macroeconomic indicators to the errors from three forecasting benchmarks: a random walk, a first-order autoregressive model, and a Bayesian model averaged forecast from a suite of univariate time-series models commonly taught to first-year economics graduate students. We estimate our forecasting benchmarks both on end-of-sample vintage and real-time vintage data. We find that Greenbook forecasts significantly outperform our benchmark forecasts for horizons less than one quarter ahead. However, by the one-year forecast horizon, typically at least one of our forecasting benchmarks performs as well as Greenbook forecasts. Greenbook forecasts of the personal consumption expenditures and unemployment tend to do relatively well, while Greenbook forecasts of inventory investment, government expenditures, and inflation tend to do poorly.

We build into a Ricardian model sectoral linkages, trade in intermediate goods, and sectoral heterogeneity in production to quantify the trade and welfare effects from tariff changes. We also propose a new method to estimate sectoral trade elasticities consistent with any trade model that delivers a multiplicative gravity equation. We apply our model and use our estimated elasticities to identify the impact of NAFTA's tariff reductions. We find that Mexico's welfare increases by 1.31%, U.S.'s welfare increases by 0.08%, and Canada's welfare declines by 0.06%. We find that intra-bloc trade increases by 118% for Mexico, 11% for Canada, and 41% for the U.S. We show that welfare effects from tariff reductions are reduced when the structure of production does not take into account intermediate goods or input–output linkages. Our results highlight the importance of sectoral heterogeneity, intermediate goods, and sectoral linkages for the quantification of the welfare gains from tariffs reductions.

This paper offers an empirical analysis of the proposal by some developing countries for an agricultural Special Safeguard Mechanism (SSM) in the World Trade Organization. It draws on political economy and market theory to demonstrate that the loss-averting domestic producer benefits that proponents believe the SSM would offer agricultural-importing developing countries may be illusory, insofar as agricultural-exporting countries also seek to avert producer losses. By way of illustration, the paper then uses time series data to analyze past government responses to fluctuations in the world’s rice markets. The results suggest that the proposed SSM would deliver at most only a small fraction of the loss-averting benefits that have been advertised by the proponents of the SSM. Since the analysis applies to upward as well as downward spikes in international prices, it underscores the importance of strengthening multilateral disciplines on both import and export trade interventions to reduce beggar-thy-neighbor unilateral trade policy responses to food price fluctuations.

The impact of trade liberalization on poverty and income distribution has gained attention for policy makers and researchers more than three decades. The empirical result of the impact of trade liberalization on poverty and income distribution is mixed. It was highly depended on characteristics of countries in term of economic and trade structure, application of methodologies, using variables and characteristics of trade liberalization. Therefore, the objective of this paper is to attempt to conduct literature reviews on the impact of trade liberalization on poverty and income inequality in developing countries. Methodology: As there are several methodologies for assessment of trade liberalization, but we focus on CGE model and micro-simulation because these two methodologies were widely used for trade analysis in developed and developing countries. Findings: The relationship between trade liberalization and poverty is ambegious. Recommendations: This literature survey is not only important for researchers but it is important for policy makers in Laos in order to implement trade policy.

El estudio de la eficacia publicitaria constituye un area de interes para la literatura. El objetivo de este trabajo es proponer un modelo que relacione la inversion publicitaria con la demanda para el sector turistico. Se aporta una aplicacion metodologica que permite realizar predicciones de la demanda turistica a corto plazo a partir de la variable explicativa "inversion publicitaria". En la aplicacion llevada a cabo se comprueba que ambas variables -demanda turistica e inversion publicitaria- estan cointegradas y se pone de manifiesto que la inversion publicitaria influye en la demanda turistica. Los resultados alcanzados tienen implicaciones de interes para el sector profesional.

Outward direct investment (ODI) from the People's Republic of China (PRC) is surging. A common perception is that it was driven by the country's resource-seeking and technology-seeking motives. Using a new, unique, and comprehensive dataset that covers close to 10,000 Chinese ODI deals from 1998 to 2009, we find that in contrast to the common perception, over half of the ODI deals are in service sectors, with many of them appearing to be export-related. In addition to documenting the pattern and trend of the PRC's ODI, we empirically examine both the determinants and effects of ODI at the firm level. We find that ex ante larger, more productive, and more export-intensive firms are more likely to start investing abroad. Using matching estimation techniques, we find that ODI is associated with better firm performance, including higher total factor productivity, employment, and export intensity, and greater product innovation. To assess the relative contributions of technology transfer, export promotion, and resource seeking to the positive effects of ODI, we use ODI data merged with customs transaction-level trade data. We find that firms’ ODI participation is associated with significantly better trade performance, measured by export and import volumes, export and import unit values, and number of export destinations. Contrary to perceived technology-seeking and resource-seeking motives, we find no evidence that ODI firms import more capital or intermediate inputs compared to non-ODI firms. © 2013 Asian Development Bank and Asian Development Bank Institute.

To forecast sales as reliably as possible is one of the most important issues in every business trade. Therefore, in recent years different models have been suggested to deal with this issue. One efficient model is the time series model. This study applies a multivariate time series model to forecast Urmia Gray Cement Factory's sales volume and more importantly, to propose an effective model to be used by other cement factories to predict their sales volume. The two independent variables of costs and revenues and the dependent variable of sales were used in the present study. Results of the study indicated the two independent variables had a positive and direct relationship with sales volume forecast.

This paper investigates the determinants of tourism in Namibia for the period 1996 to 2012. The results indicate that an increase in trading partners’ income, depreciation of the exchange rate, improvement in Namibia’s infrastructure, sharing a border with Namibia are associated with an increase in tourist arrivals. Governance indicators such as rule of law, political stability and no violence are also associated with an increase in tourist arrivals to Namibia. The results show that there is unexploited tourism potential from Angola, Austria, Botswana, Germany and South Africa. This suggests that it is important to exploit the tourism potential as this would help to accelerate economic growth and generate the much needed employment

The easing of economic sanctions against Myanmar by Western countries in 2012 augmented the prospect that Myanmar would expand its exports. However, a sharp rise in natural resource exports during the time sanctions had been applied raises concern about the so-called Dutch disease. This study forecasts Myanmar’s export potential by calculating counterfactual export values using a gravity model that takes into account the effects of natural resource exports on non-resource exports. Without taking into consideration the effects of natural resource exports, the counterfactual predicted values of non-resource exports during the period 2004-2011 are more than five times larger than those of actual exports. If these effects are taken into account, however, the predicted values are lower than those of actual exports. The empirical results imply that Dutch disease is more of a risk in Myanmar than it is in any other South-East Asian country.

The euro crisis has rekindled questions about the advantages and disadvantages of membership in the European Monetary Union. In the Northern periphery of the EU, the different monetary regime choices of Finland and Sweden have created a particularly interesting testing ground for the benefits of the EMU. The average growth rates were rather similar before the Great Recession that started in the autumn of 2009, while Sweden has grown faster since that. In terms of price stability Sweden has fared somewhat better than Finland in the EMU period. We assess the effects of the regime choice by simulating the behaviour of the Swedish economy with National Institute’s Global Econometric Model (NiGEM) on the assumption that Sweden had joined the EMU in 1999. The simulation exercise suggests that the independent monetary regime reduced the impact of the global shock on Sweden. The different monetary regimes cannot, however, explain the growth gap between Sweden and Finland anymore in 2012. Other factors, such as the decline of the Nokia cluster, are needed for that. As a whole, our results suggest that the different choices with regard to the EMU have not affected the macroeconomic outcomes very much.

In this paper the results of a number of numerical simulations of possible trade liberalization scenarios in the ESCAP region are presented. The scenarios considered include: expansion of existing trade blocs to encompass new members; consolidation and deepening of existing trade agreements; and a region-wide free trade area. The simulations were conducted using the model of the Global Trade Analysis Project (GTAP) and were based on a projection of the database to 2010.

This paper introduces a new empirical model of international trade flows based on an import intensity-adjusted measure of aggregate demand. We compute the import intensity of demand components by using the OECD Input-Output tables. We argue that the composition of demand plays a key role in trade dynamics because of the relatively larger movements in the most import-intensive categories of expenditure (especially investment, but also exports). We provide evidence in favor of these mechanisms for a panel of 18 OECD countries, paying particular attention to the 2008–2009 Great Trade Collapse. (JEL E23, F14, F17, F44, G01)

Using the NiGEM model, the authors show that a wage moderation in the “deficit” countries of the euro area –i.e. lowering the annual growth rate of wages by one percentage point over a five year horizon– would improve their current account balances by 0.2 to 0.3 percentage points of GDP. The impact would be greater if the wage moderation in the “deficit” euro area countries were accompanied by a simultaneous and symmetrical wage increase in the area’s surplus countries.

Primarily, the study assesses the determinants of non-oil import demand in ­Nigeria. This is aimed at measuring the relative strengths and nature of effects of the variables that determine Nigeria's non-oil import demand, and subsequently assessing the extent to which results are in conformity with those previously obtained on a wider aggregate of the Nigerian economy. An econometric method of analysis was employed. Results indicate deviations from the findings of earlier studies, as two key variables previously reported as significant (real exchange rate and real income) showed insignificant causational relationships in the model.

The research contains the estimation of Revealed Comparative Advantage indices for food exporters and structural shifts in the global composition of food trade. The finding about the income elasticity of consumption for imported food has been done on the basis of AIDS and QAIDS models. At the final stage of the paper the authors implement the combined forecast of the share of expenditures on imported food in total expenditures on food and the income elasticity of imported food consumption in Russia and Brazil till 2020. The key implication is that food (both imported and produced domestically) is a second need good.

À partir de simulations du modèle NiGEM, les auteurs montrent qu’une modération salariale pratiquée dans les pays « déficitaires » de la zone euro induirait une amélioration du solde des transactions courantes comprise entre 0,2 et 0,3 point de PIB à l’horizon de cinq ans. Un ajustement symétrique des pays de la zone euro permettrait d’accroître la taille de cet ajustement.

This paper examines regional market integration through production networks and free trade agreements in East Asia and their attendant challenges and issues. It examines progress in the ASEAN Economic Community and in various ASEAN+1 free trade and economic integration agreements. It argues that there is a strong case for a region-wide agreement to maximize economic synergy and resolve emerging problems, including market fragmentation and the “noodle bowl” effect. It explores three possible paths to region-wide integration, namely, the East Asia Free Trade Area (encompassing ASEAN+3 [the People's Republic of China, Japan, and Korea]), the Comprehensive Economic Partnership for East Asia (encompassing ASEAN+3 countries and Australia—New Zealand and India) and the Trans-Pacific Partnership, currently involving nine negotiating countries in the Asia-Pacific Economic Cooperation. The paper explores the economic and political benefits and challenges of forming these three regionwide agreements. © 2013 The Earth Institute at Columbia University and the Massachusetts Institute of Technology.

This study aimed to investigate Pakistan’s bilateral trade flows with major trading partners. Panel data for the time period 1990-2010 with a frequency of two years was analyzed. Gravity model was employed for the analysis of the data and proved to be successful in explaining Pakistan’s bilateral trade flows by high values of R-square and adjusted R-square. Results revealed that GDP and GDP Per capita positively affect trade volume while distance and dummy variable for cultural similarities showed a negative relationship towards trade volume. Ratio of actual trade to predicted trade determined for each of the partner country for the year 2010 revealed that Japan, Turkey, Malaysia, India and Iran have greater unrealized trade potential with Pakistan which leads to policy implications.

We present a gravity model that accounts for multilateral resistance, firm heterogeneity and country-selection into trade, while accommodating asymmetries in trade flows. A new equation for the proportion of exporting firms takes a gravity form, such that the extensive margin is also affected by multilateral resistance. We develop Taylor approximated multilateral resistance terms with which to capture the comparative static effects of changes in trade costs. For isolated bilateral changes in trade frictions, multilateral resistance effects are small for most countries. However, if all countries reduce their trade frictions, the impact of multilateral resistance is so strong that bilateral trade falls in most cases, despite the larger trade elasticities implied by firm heterogeneity. As a consequence, the world-wide trade response, though positive, is much lower.

This paper investigates the consequences of the completion of the internal market in the EC using a computable general equilibrium model of trade under imperfect competition. The focus of the paper is the welfare consequences of reducing trade barriers and the changes in production and trade flows with the rest of the world. Welfare changes by country are reported and these are decomposed by source of gain. Two sets of results are reported: a `segmented market' experiment where trade costs are reduced by an amount equal to 2.5% of the value of trade, and an `integrated market' experiment in which there is the same trade cost reduction plus a switch from a segmented to an integrated market equilibrium. In both cases we find large welfare effects arising from imperfect competition. Intra-EC trade liberalization has pro-competitive effects which make a substantial contribution to the welfare change in the first set of experiments and are the most important component of the welfare change in the second set.

Our analysis suggests; they do not! To arrive at this conclusion we construct a real-time data set of interest rate projections from central banks in three small open economies; New Zealand, Norway, and Sweden, and analyze if revisions to these projections (i.e., forward guidance) can be predicted by timely information. Doing so, we find a systematic role for forward looking international indicators in predict- ing the revisions to the interest rate projections in all countries. In contrast, using similar indexes for the domestic economy yields largely insignificant results. Furthermore, we find that revisions to forward guidance matter. Using a VAR identified with external instruments based on forecast errors from the predictive regressions, we show that the responses to output, inflation, the exchange rate and asset returns resemble those one typically associates with a conventional monetary policy shock.

A consequence of melting Arctic ice caps is the commercial viability of the Northern Sea Route, connecting North-East Asia with North-Western Europe. This will represent a sizeable reduction in shipping distances and a decrease in the average transportation days by around one-third compared to the currently used Southern Sea Route. We examine the economic impact of the opening of the Northern Sea Route in a multi-sector Eaton and Kortum model with intermediate linkages. This includes a remarkable shift of bilateral trade flows between Asia and Europe, diversion of trade within Europe, heavy shipping traffic in the Arctic, and a substantial drop in traffic through Suez. These global trade changes are reflected in real income and welfare effects for the countries involved. The estimated redirection of trade has also major geopolitical implications: the reorganisation of global supply chains within Europe and between Europe and Asia, and the highlighted political interest and environmental pressure on the Arctic.

The aim of this paper is to investigate the effects of competing trade regimes on Serbian trade with its most significant (traditional) partners, like European Union and CEFTA 2006 signatories, and other untraditional trade partners with favourable trade regime, like the USA. To this end, gravity model with bilateral and time effects is estimated by Hausman-Taylor AR(1) instrumental variable estimator, using panel data on bilateral trade between Serbia and its main trade partners during the period 2001-2010. The results indicate that overall level of development and difference in factor endowments stimulate Serbia’s exports, which is in accordance with theoretical foundation that inter-industry trade is predominant in exports of less developed countries. Moreover, competing trade regimes appear as important determinant of Serbia’s trade relations, whereas additional liberalization of trade regime with the USA as untraditional trade partner, even asymmetrical to Serbia’s favour, cannot divert trade flows from traditional partners in the long-run. This could mean that distance plays more prominent role in bilateral trade than the degree of liberalization of trade regimes in case of Serbia. The result could be due to the contemporaneous effects of trade preferences granted to Serbia by the EU and other CEFTA 2006 signatories, main trading partners of Serbia.

This study is carried out to estimate the trade potentiality of Nepal using gravity model. The gravity model simply explains that the volume of trade between pairs of countries is a positive function of the size of two countries and negative function of the distance between them. The study has used coefficients of the model to predict Nepal’s foreign trade for the year 2009. The trade potentiality is calculated with the help of the ratio of predicted trade to actual trade. The result is fluctuating: some countries crossed the limits whereas some countries are still below the potential trade. The study has used gravity model to evaluate the determinants of foreign trade of Nepal using secondary data including 19 major trade partners. The estimated result of Nepal’s trade potentiality shows that Nepal has exceeded trade potentiality with her 10 trading partners, including giant neighbors India and China, and there remains trade potentiality with 9 trade partners including another neighbor Bangladesh.

Consumption is currently soaring within rapid growth markets, due to demographic evolutions and an increase in real income. As economic growth has been very low in developed countries, investors turned their foreign capital inputs towards emerging countries. It is estimated that emerging economies will stand for more than half of the global increase in the following three years. BRICS countries (Brazil, Russia, India, China and South Africa) are especially important within the group of emerging countries, but also at a worldwide commercial level, as they include about 45% of the world’s population and stand for a quarter of the global economy (13,500 billion $).

The European Union next enlargement will constitute a significant qualitative change in the structure of the current Union, as the accession of the Western Balkan countries and of Turkey in particular will bring a brand new set of economic problems. It is expected that this enlargement to have a considerable effect for the new entrants, as well as for the European Union as a whole.\\r\\nConsidering some of the aspects raised by a new extension, this article aims to observe the trade impact of a new enlargement with the membership of the Western Balkan countries and Turkey, as this new growth is expected to have a considerable effect for the new entrants and for the European Union as a whole.\\r\\nThis study is based on the compare of the potential trade creation effects with the trade diversion effects resulting from the removal of trade restrictions for Western Balkan countries and Turkey and the European Union, by using the revealed comparative advantage index.\\r\\nThe analyze objective was to estimate the degree of trade creation and trade diversion outcome on the EU countries when Western Balkan countries and Turkey are included into the Union market.\\r\\nThe obtained results suggest that the export structures differ significantly among Western Balkan countries and Turkey and the European Union. Based on the revealed comparative advantage indexes, the authors would expect an intra-regional trade creation effect, but also we expect a risk for the Eastern European countries trade with European Union, especially as a result of Turkey\\\\\\\'s accession into the European markets without any trade barriers.\\r\\nAs far as trade creation and trade diversion effects are concerned, they observed that Western Balkan countries and Turkey, probably, do not change the European Union position significantly because of their lower trade volume comparing with the one of the EU-27.

In this paper, we investigate the economic effects of possible free trade agreements among ASEAN+3 countries, and then compare the economic results of those FTAs. Our main findings are as follows. First, the trilateral FTA among Korea, China, and ASEAN (FTA_KCA) under the imperfectly competitive model, which would bring about a 1.02% increase in GDP for Korea, is the second-best choice for Korea. Second, according to the sectoral effects, we determined that the output of agricultural products would decrease when China joins the FTA. This is because China has a comparative advantage in the production and export of agricultural products.

The effects of a full trade liberalization of Serbian imports originating from the Stabilization and Association Agreement (SAA) and European Union (EU) countries shall be measured using the global simulation model (GSIM) for individual Serbian industries. The model estimates trade effects, welfare effects (producer surplus, consumer surplus, and change in tariff revenue), and price and output changes. This information shall be used to identify those sectors that would be affected most by full liberalization. The impact on tariff revenues shall be investigated as tariffs are an important source of revenue for the Serbian budget. In this exercise, we follow closely the methodology developed by Mario Holzner (2004, 2006, 2008). Serbia signed an SAA in April 2008. This is a specific type of agreement on the association created by the EU for the Western Balkan countries. SAAs are similar in their nature and objectives to the European Agreements, signed during the 1990s between the European Community and Central and Eastern European Countries (CEECs). The main goal of the above-mentioned agreement is boosting economic cooperation by establishing a free trade zone. Apart from the rules concerning economic cooperation, the agreement consists of many other instruments that should support the stabilization of the political, social, and economic situation in the associated countries. However, our aim in this article is to specifically estimate the effects of tariff liberalization of Serbian imports originating from the SAA and EU countries.

The aim of the paper is to reveal the similarities and differences of export and import demand functions of Bulgaria and Romania over the period 2000-2008 using quarterly data. On one hand, the countries are similar in respect to the convergence process with the euro area that they are undergoing, on the other hand they have different exchange rate regimes: Bulgaria has a currency board arrangement, Romania’s exchange rate regime is characterized by a managed float. The empirical analysis will therefore contribute to the debate if the countries with flexible exchange rates are in a more advantageous position concerning competitiveness compared to the countries with fixed exchange rates. The study shows that the export dynamics of Bulgaria and Romania over the period of investigation is largely explained by the EU growth, while the increasing market shares of the two countries are partly due to strong FDI inflows. A key conclusion of the paper is that the real exchange rate appreciation, which was more prominent in Romania than in Bulgaria, did not have significant impact on export developments of neither of the two countries. This is mainly due to the fact that the real exchange rate appreciation during this period of convergence is likely to reflect an upward movement in its equilibrium value, not a loss in competitiveness. Another important conclusion is that the convergence process in respect to trade in both economies is similar irrespective of their exchange rate regime, currency board or managed float.

The present paper points out the fact that the stable economic growth of the states can be obtained only due to the existing interdependences between the developed economies and the emerging ones. In order to increase its role in different parts of the globe, but also to ensure a balance between its states and the emerging economies, the European Union has established strategic partnerships with all BRICS countries. For the latter, the EU represents the main trade partner and besides the creation of an environment adequate to the development of the international trade, the realization of a tight cooperation in the field of security, illegal migration, climate changes and terrorism is also on the agenda. The BRICS countries are important for the world trade because of their economic power, as they have become the states whose markets have known the fastest development in the world. Thus, it is important to keep in mind that EU’s imports from the BRICS countries represented in 2011 more than 33,7% of the total, while exports were above 21%.

Trade and globalization have brought many benefits to countries and their citizens because they allow countries access to more efficient production, increased labor productivity, supported extending the knowledge and new technologies planetary scale, and rich assortment of products to which population access. Also, through the multilateral trading system has been a significant reduction of customs protectionism, have mitigated the effects of non-tariff barriers, trade policy measures have become more predictable, leading to lower production costs, improve the quality of products sold and to widening choice of products to consumers.

A small open economy model emphasizing the endogenous interestrate arbitrage was employed to examine whether arbitrage activities would dampen or augment exchange rate volatility against random disturbances. Based on numerical simulation, increased risk aversion of arbitragers was observed to dampen exchange rate volatility that is subject to random disturbances resulting from domestic absorption, domestic money supply, and foreign interest rates. On the contrary, volatility was augmented by random disturbance from foreign income. Results of sensitivity analysis suggest that the role of arbitragers’ risk aversion could be associated with the degree of goods price flexibility, particularly when domestic monetary, or domestic income, or foreign income disturbances are present. These findings call for future empirical studies to address the role of price flexibility for improved estimates of parameter values that govern the exchange rate behavior in the model. - Al fine di esaminare se l’arbitraggio riduce o aumenta la volatilità del tasso di cambio in presenza di disturbi casuali, è stato preso in considerazione un modello di piccola economia ove è enfatizzato l’arbitraggio endogeno sui tassi di interesse. Sulla base di simulazioni numeriche è stato evidenziato che l’aumento dell’avversione al rischio da parte degli arbitraggisti preclude l’aumento della volatilità del tasso di cambio, il quale è soggetto a disturbi casuali conseguenti ad assorbimento interno, offerta interna di moneta e tassi di interesse esteri. Al contrario la volatilità aumenta in presenza di disturbi casuali nel reddito estero. I risultati delle analisi di sensitività suggeriscono che il ruolo dell’avversione al rischio degli arbitraggisti potrebbe essere associato al grado di flessibilità del prezzo dei beni, specialmente in presenza di disturbi monetari o di reddito, sia interno che estero. Queste evidenze richiedono che future analisi empiriche determinino qual è il ruolo della flessibilità del prezzo per il comportamento del tasso di cambio nel modello considerato.

Beginning with the WTO's Doha Development Agenda and establishment of the Millennium Development Goal of reducing poverty by 50 percent by 2015, poverty impacts of trade reforms have become central to the global development agenda. This has been particularly true of agricultural trade reforms due to the importance of grains in the diets of the poor, presence of relatively higher protection in agriculture, as well as heavy concentration of global poverty in rural areas where agriculture is the main source of income. Yet some in this debate have argued that, given the extreme volatility in agricultural commodity markets, the additional price and therefore poverty impacts due to trade liberalization might well be indiscernible. This paper formally tests the “invisibility hypothesis” using the method of stochastic simulation in a trade-poverty modeling framework. The hypothesis test is based on the comparison of two samples of price and poverty distributions. The first originates solely from the inherent variability in global staple grains markets, while the second combines the effects of inherent market variability with those of trade reform in these same markets. Results, at the national and stratum level indicate that the short-run poverty impacts of full trade liberalization in staple grains trade worldwide, are distinguishable in only four of the fifteen countries, suggesting that impacts of more modest agricultural trade reforms are indeed likely to be invisible in short run. Countries that show statistically significant short run impacts are the ones characterized by high staple grains tariffs and/or a moderate degree of grain markets variability. Within each country, results are heterogeneous. In two thirds of the sample countries, agriculturally self-employed poor experience statistically significant poverty impacts from trade liberalization. However, this figure is under a third for all the other strata. Copyright , Oxford University Press.

This paper develops an approach for quantifying the importance of different sources of comparative advantage for country welfare. To explain patterns of specialization, I present a multi-country trade model that extends Eaton and Kortum (2002) to predict industry trade ows. In this framework, comparative advantage is determined by the interaction of country and industry characteristics, with countries specializing in industries whose specific production needs they are best able to meet with their factor endowments and institutional strengths. I estimate the model parameters on a large dataset of bilateral trade flows, presenting results from both a baseline OLS approach, as well as a simulated method of moments (SMM) procedure to account for the prevalence of zero trade fl ows in the data. I apply the model to explore various quantitative questions, in particular how much distance, Ricardian productivity, factor endowments, and institutional conditions each matter for country welfare in the global trade equilibrium. I also illustrate the shift in industry composition and the accompanying welfare gains in policy experiments where a country raises its factor endowments or improves the quality of its institutions.

Agricultural biotechnologies, and especially transgenic crops, have the potential to boost food security in developing countries by offering higher incomes for farmers and lower-priced and better quality food for consumers. That potential is being heavily compromised, however, because the European Union and some other countries have implemented strict regulatory systems to govern their production and consumption of genetically modified (GM) food and feed crops, and to prevent imports of foods and feedstuffs that do not meet these strict standards. This paper analyses empirically the potential economic effects of adopting transgenic crops in Asia and Sub-Saharan Africa. It does so using a multi-country, multi-product model of the global economy. The results suggest the economic welfare gains from crop biotechnology adoption are potentially very large, and that those benefits are diminished only very slightly by the presence of the European UnionÂ’s restriction on imports of GM foods. That is, if developing countries retain bans on GM crop production in an attempt to maintain access to EU markets for non-GM products, the loss to their food consumers as well as to farmers in those developing countries is huge relative to the slight loss that could be incurred from not retaining EU market access.

This paper investigates empirically the effect of real exchange rate volatility on sectoral bilateral trade flows between the US and her top thirteen trading countries. Our investigation also considers those effects on trade flows which may arise through changes in income volatility and the interaction between income and exchange rate volatilities. We provide evidence that exchange rate volatility mainly affects sectoral trade flows of developing but not that of developed countries. We also find that the effect of the interaction term on trade flows is opposite that of exchange rate volatility yet there is little impact arising from income volatility.

For decades, earnings from farming in Latin American countries have been depressed by pro-urban and anti-trade biases in own-country policies and by governments of richer countries favoring their farmers with import barriers and subsidies. These policies have reduced national and global economic welfare, hampered agricultural trade and economic growth, and may well have added to income inequality and poverty in the region. Since the mid-1980s, however, the region has reduced its sectoral and trade policy distortions and some high income countries also have begun reducing market-distorting aspects of their farm policies. This paper synthesizes results from a World Bank research project that provides (a) price comparison based measures of the extent to which national policies have changed farmers‘ price incentives since the 1960s in eight Latin American countries, (b) partial equilibrium indexes of the impact of national farm policies on agricultural trade and economic welfare, (c) general equilibrium estimates of national trade, welfare and poverty effects of global reforms retrospectively since the early 1980s and prospectively as of 2004, (d) comparisons with similar estimates for Asia, Africa and high-income countries, and (e) a discussion of prospects for further pro-poor policy reform of agricultural price and trade policies.

During the last decades Norwegian exporters have-despite various forms of exchange rate targeting-faced a rather volatile exchange rate which may have influenced their behaviour. Recently, the shift to inflation targeting and a freely floating exchange rate has brought about an even more volatile exchange rate. We examine the causal link between export performance and exchange rate volatility across different monetary policy regimes within the cointegrated Vector Autoregression (VAR) framework using the implied conditional variance from a Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model as a measure of volatility. Although treating the volatility measure as either a stationary or a nonstationary variable in the VAR, we are not able to find any evidence suggesting that export performance has been significantly affected by exchange rate uncertainty. We find, however, that volatility changes proxied by blip dummies related to the monetary policy change from a fixed to a managed floating exchange rate and the Asian financial crises during the 1990s enter significantly in a dynamic model for export growth-in which the level of relative prices and world market demand together with the level of exports constitute a significant cointegration relationship. A forecasting exercise on the dynamic model rejects the hypothesis that increased exchange rate volatility in the wake of inflation targeting in the monetary policy has had a significant impact on export performance.

Recently the Bank has provided new indicators for monitoring the extent to which agricultural policies restrict international trade in farm goods. They come from two studies with differing methodologies and data sources, and each provides less-than-perfect estimates. This note shows how and explains why the two indexes differ for some countries.

This article applies the event study approach to assess the immediate impact of Euro on intra-regional trade among the European Union (EU) members. Here, the post-Euro intra-regional trade has been compared with the pre-Euro intra-regional trade, while the implementation of Euro has been considered as the event. The results show that the trade enhancement at the immediate post-event period is 1.2 times of the immediate pre-event period for France, Germany, Italy and Spain, while immediate trade enhancement for all Euro-members is 1.14 times. The estimation has been statistically justified by using the gravity model. This study thus provides the first empirical evidence on the assessment of currency union impact on intra-regional trade by using the alternative method, the event study approach.

Este artículo analiza los efectos de la progresiva implantación de un acuerdo de libre comercio entre Marruecos y la UE sobre las exportaciones de las Comunidades Autónomas (CC.AA.) españolas a ese país. Para ello, estimamos una ecuación de gravedad con datos de las CC.AA. y ramas de actividad en el periodo 1999-2002. Como principal aportación metodológica, nuestro modelo incluye los aranceles aplicados por Marruecos sobre los bienes procedentes de la UE desagregados por ramas de actividad. Ello no sólo nos permite una mejor estimación si no también realizar simulaciones del desmantelamiento arancelario teniendo en cuenta el ritmo y cuantía en la reducción de los aranceles para cada rama de actividad y año.

The year 2009 remains in the history of world economy as being, for all the countries in the world, the year of fight against the global economic crisis. After 2008, when the effects of the financial, banking and stock market crisis have spread throughout the American economy, 2009 has not started under more favorable auspices, so that the U.S. seems to lose rapidly before China in the fight for the best business environment. Given the dramatic economic situation on the U.S. market, new opportunities seem to be seen in Asian business. China no doubt defies the crisis and grows faster than any other economy of another nation, representing one of the biggest opportunities to open a business. It seems that this country bets, in any context, that it can keep the balance indefinitely. [1] Economists see in China the best-positioned area for concentrating the global economy. Imports and growing auto sales are signs which indicate that the Chinese population shows propensity towards consumption.

Given the strong economic development and diversification of international relations it was foreseen the need of imposing to realize trade negotiations frequently and consistently, in the idea of maximizing economic activities profitability. Therefore, strategies to improve the process of negotiating followed an upward trend towards the correct assessment of the limits of the negotiating partners under discussion, aiming to enhance responsiveness to dynamic market requirements, anticipating and recording with much promptness and sensitivity the focal points unfolding the process itself. Re-engineering measures orientation of the commercial negotiation process towards boosting economic agents with a high export potential, lead to the implementation of assistance programs to encourage the emergence of new strategies to seize the competitive advantage within the specialized market allows the flexibility in action sizing and economic conjuncture and cultural peculiarities of the business partner predicting.

This paper examines the forecasting approach of foreign trade unit value indices followed in the compilation of quarterly national accounts of Italy. Total imports and exports indices are indirectly obtained from the aggregation of ARIMA forecasts of disaggregated components, derived from the program TRAMO with automatic identification options. An out-of-sample forecasting exercise is performed to validate the automatic choices made by TRAMO and to evaluate the relative performance of a direct forecasting approach of imports and exports aggregates. Also, we show how the use of international raw commodity prices can improve the forecasting accuracy of aggregate unit value indices.

The global economic crisis has forced a major rethinking of the respective roles of governments and markets in the processes of trade and growth. Indeed, industrial policy seems to be back in fashion—or, at least, talking about it is. But a renewed “activism” by government in the trade and growth agenda need not mean a return to old-style policies of import substitution and “picking winners.” Instead, it may mean a stronger focus on competitiveness by unlocking the constraints to private sector–led growth. This note discusses the renewed role of government in trade and growth policy from the competitiveness angle, and it suggests some priorities for the new competitiveness agenda.

This paper examines the relationship between exchange rate pass-through and exchange rate volatility. Numerical simulation suggests that increased degree of pass-through may be stabilizing or destabilizing the exchange rate, mainly depending on the source of random disturbances. The result is generally insensitive to the income elasticity of aggregate demand, the income elasticity of trade balance and income elasticity of money demand, but it is sensitive to the degree of price flexibility. When domestic absorption disturbance, domestic real income disturbance, or foreign real income disturbance impinges on the economy, an increased degree of pass-through tends to decrease exchange rate volatility when price adjustment is inelastic, but it turns out to be destabilizing if the price adjustment is elastic. / Questo lavoro esamina il rapporto tra il pass-through, ovvero la misura in cui le variazioni dei cambi si ripercuotono sui prezzi dei beni, e la volatilità del cambio. La simulazione numerica suggerisce che un livello maggiore di pass-through può avere un effetto stabilizzante o destabilizzante sul tasso di cambio, ciò dipende prevalentemente dalla fonte dei disturbi casuali. Il risultato generalmente è insensibile all’elasticità – rispetto al reddito – della domanda aggregata, del saldo della bilancia commerciale e della domanda di moneta, ma è sensibile al grado di flessibilità dei prezzi. Quando i disturbi nell’assorbimento interno e nel reddito interno o estero reale influiscono sull’economia, un maggiore pass-through tende a far diminuire la volatilità del cambio – se l’aggiustamento del prezzo è inelastico – mentre se quest’ultimo è elastico il pass-through risulta destabilizzante.

We numerically examine the impact of the global economic crisis on the Cambodian garment exports as well as its economy by using the conventional CGE model. A seminal aspect of the paper is that we have successfully estimated the curvature of the CET and CES production functions for the Cambodian economy, by using the time series regression method. One of our most striking results indicates that the welfare cost of the impact of the crisis at least reaches 281 million US dollars, thus resulting in a 0.3 percent decrease in GDP with 20.8 thousand direct job losses in the garment industry. Our simulation results also show that the currently ongoing policy in Cambodia only reduces the negative impact of the crisis by 32 million US dollars, and we propose an expansion of the government budget of 304 million US dollars, in order to neutralize the negative impact of the global economic crisis on the Cambodian economy.

This paper critically and selectively surveys the literature on protection for sale and discusses directions for future research in this area. It suggests that the standard approach needs to be augmented to provide more compelling tests of this model. © 2008 Elsevier Inc. All rights reserved.