High-end variety exporters defying distance: Macro implications

Julien Martin, Florian Mayneris 04 December 2013

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Vox columns by Peter Schott (2007) and Fontagné et al. (2008) have argued that developed countries specialise in the production of high-end varieties – expensive varieties of a product which have specific attributes such as reputation, branding, or quality that make them appealing to consumers in spite of their higher price. A few papers have examined the implications of such a specialisation for the labour market (e.g. Verhoogen 2008). However, while policymakers and academics encourage specialisation in high-end varieties, the macroeconomic consequences have not yet been examined.

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Topics:  International trade

Tags:  France, trade, exports, luxury goods

Does policy uncertainty reduce economic activity? Insights and evidence from large trade reforms

Kyle Handley, Nuno Limão 23 November 2013

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The impact of policy uncertainty on economic activity is an issue traditionally associated with developing countries. Since 2008, however, the spotlight has shifted. Governments’ responses to the Great Recession and the Eurozone crisis have raised considerable uncertainty about the future policies of advanced economies. Examples include the timing and size of financial bailouts, government expenditures, and the risk of sovereign-debt default. These crises have also heightened trade policy uncertainty.

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Topics:  International trade

Tags:  US, China, WTO, trade, uncertainty, Great Recession, Eurozone crisis

Why buyers matter

Andrew B. Bernard, Andreas Moxnes, Karen-Helene Ulltveit-Moe 15 November 2013

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Trade in goods across borders is conducted by firms, from an exporting firm in a source country to an importing firm in a destination country. Firms trade, not countries.

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Topics:  International trade

Tags:  trade, Norway, heterogeneity, assortative matching

Will the WTO Bali conference advance the Doha Round and Asia?

Matthias Helble, Ganeshan Wignaraja 13 November 2013

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Trade negotiators from Asia and elsewhere are locked in intense negotiations to lay the platform for a Doha trade deal at the WTO Ministerial Conference in Bali, Indonesia, 3–6 December 2013. A new WTO Director-General, a ministerial venue in an influential Asian country, the risk of eroding WTO credibility, and the advent of mega-regional trade agreements have all enthused and motivated trade negotiators. This article assesses what the Bali Ministerial Conference might reasonably deliver, and how this may advance the Doha Round and Asia’s trade.

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Topics:  Global governance International trade

Tags:  WTO, trade, tariffs, Doha, Asia, trade facilitation, food security, Bali, tariff-quota administration

Competing successfully in a globalising world: Lessons from Lancashire

Nicholas Crafts, Nikolaus Wolf 22 October 2013

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The ‘first globalisation’ of the 19th century – driven by the substantial falls in trade costs associated with the age of steam – saw the ‘First Unbundling’ (Baldwin 2006), in which industrial production and consumption became spatially separated, often by large distances. The period was characterised by the simultaneous processes of industrialisation in Europe and de-industrialisation in Asia (Table 1).

Table 1. Shares of world manufacturing output (%)

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Topics:  Economic history International trade

Tags:  globalisation, wages, trade, Industrial Revolution, cities, agglomeration, industrialisation, Lancashire, cotton

Doing Business – less icing, more cake!

Thorsten Beck 06 June 2013

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The World Bank Group’s Doing Business data collection and ranking exercise is again in the headlines, allegedly following China’s protest against it being ranked 91. Using the occasion of the 10th anniversary of Doing Business, the World Bank’s new president has formed a commission in October 2012 to assess impact, methodology and effectiveness of the Doing Business project.1 The commission is scheduled to issue its report in the next few days.

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Topics:  Development Frontiers of economic research

Tags:  trade, Doing Business

The transatlantic trade talks and economic policy research: Time to re-tool

Simon J Evenett, Robert M. Stern 21 March 2013

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“And tonight, I am announcing that we will launch talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union – because trade that is free and fair across the Atlantic supports millions of good-paying American jobs”.

With these 38 words, in his State of the Union speech on 13 February 2013, President Obama launched the mother of all bilateral trade negotiations. It seems trade reform is expected to deliver where macroeconomic policy has failed.

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Topics:  International trade

Tags:  US, EU, trade, Transatlantic Trade and Investment Partnership

Growth dynamics and policy choices facing Indonesia

Ganeshan Wignaraja 21 February 2013

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Growth slowed in Indonesia in 2012, indicating that the global financial crisis and economic slowdown had indeed had an effect on ASEAN’s biggest economy. Indonesia grew at 6.2% in 2012, down slightly from 6.5% in 2011. Overall, this remains a respectable figure. Bear in mind that Indonesia's annual average growth in the previous decade was below 6% (see Figure 1). Developing Asia as a whole grew at 6.1% in 2012.

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Topics:  Development Politics and economics

Tags:  trade, natural resources, East Asia, state capitalism

‘No gain without pain’: Antidumping protection hurts exports

Hylke Vandenbussche, Jozef Konings 30 January 2013

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Protection is often viewed as a powerful instrument to help domestic firms to raise their sales at the expense of foreign importers. But this view is now being challenged by recent research showing that the effects of protection really depend on the international orientation of the firms i.e. whether they are exporters or not. Protected firms that are well integrated in global value chains may actually lose sales whenever the imports of inputs are subject to protection.

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Topics:  International trade

Tags:  France, EU, trade, tariffs, protectionism, global value chains

Exchange-rate volatility is a problem for trade … especially when financial development is low

Jérôme Héricourt, Sandra Poncet 19 January 2013

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The increasing volatility of exchange rates after the fall of the Bretton Woods agreements has been a constant source of concern for both policymakers and academics. Developed countries fought hard in the 1980s to limit US dollar fluctuation (one thinks of the Plaza and Louvre’s agreements, respectively in 1985 and 1987), and some European countries took an even more radical decision by giving up their national currency for the euro in 1999.

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Topics:  Exchange rates International trade

Tags:  China, trade, exchange-rate volatility

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