IMF Working Paper Series
Опубликовано на портале: 16-12-2003Valerie Cerra, Sweta C. Saxena IMF Working Paper Series. 2002. No. 02/200 .
This paper studies the behavior of China's exports from the mid-1980s through 2001. Extensive quarterly data on values and quantities of major export products have been taken from Chinese customs statistics to form a panel data set. The data are used to estimate export supply price elasticities, including by industry groups. The extensive product level data permits the use of panel estimation techniques in order to increase the power of the testing methodology. Aggregate quarterly export unit price indices are also constructed and thereby provide an input to future research on China's trade.
Опубликовано на портале: 22-12-2003Lorenzo Giorgianni, Gian Maria Milesi-Ferretti IMF Working Paper Series. 1997. No. 97/54 .
A distinguishing feature of the strong economic performance enjoyed by Korea and other newly industrializing Asian economies has been the rapid growth of export and import flows. In recent years, the growing weight of East Asian countries in the world economy and their increasing trade integration have been accompanied by a substantial change in the geographical destination of Korea's exports. While growth in Korean exports to member countries of the Organization for Economic Cooperation and Development (OECD) has slowed down considerably, exports to other East Asian countries have boomed. This paper examines the extent to which the Korean experience can be explained within traditional trade models. It provides evidence on how exports and imports react to changes in relative prices and in foreign and domestic demand, and investigates the determinants of the direction of Korean exports. Two important issues are dealt with differently from previous studies. First, in light of the high weight of raw materials and capital goods in Korea's imports, the hypothesis that investment expenditure is the most important explanatory variable for import demand is examined. Second, export demand and supply elasticities are obtained by estimating a simultaneous structural model in which the long- and short-run dynamic properties of the data are fully specified. Estimation results indicate that real consumption and investment are important determinants of aggregate imports in Korea and that a specification that employs aggregate expenditure implicitly underestimates the relative importance of investment. The demand for Korean exports exhibits high elasticity with respect to foreign income and relative export prices. The decline in the share of exports to industrial countries is linked not only to the decline in the relative importance of OECD countries in world trade, but also to the increased penetration of industrial countries. markets by other Asian developing countries.
Опубликовано на портале: 22-12-2003Tito Cordella, Isabel Grilo IMF Working Paper Series. 1998. No. 98/48 .
This paper uses a vertical differentiation duopoly framework to analyze firms. relocation decisions when the removal either of trade barriers or of restrictions on capital outflows or inflows (globalization) allows them to serve the domestic market through foreign plants employing cheaper foreign labor. The paper addresses two issues. First, it tries to explain which firms, within a specific industry, have the stronger incentives in relocating their production facilities in low-wage countries. It shows that such incentives are higher for the firm producing the variety that would have a larger market share if the two goods were sold at their marginal cost. Second, it assesses the welfare consequences of the decision of domestic firms to serve the domestic market through foreign plants. More precisely, it compares domestic welfare under autarchy and under globalization. The recognition of the consequences of relocation on unemployment allows to explicitly take into account the associated variations in workers. surplus, when performing the welfare analysis. In this second-best world, when the complete liberalization of trade and capital flows leads to the relocation of the whole industry, autarchy is strictly better, on domestic welfare terms, than globalization. However, when relocation is a dominant strategy for one (and only one) firm, globalization may unambiguously be welfare improving. Finally, and somehow against the common wisdom, the paper shows that the welfare cost of relocation is lower, the lower is the level of the foreign wage.
How Does Industrialization Affect the Structure of International Trade? The Japanese Experience in the Pacific Basin [статья]
Опубликовано на портале: 16-12-2003Sayuri Shirai, Dongpei Huang IMF Working Paper Series. 1994. No. 94/95.
This paper provides a theoretical model to explain how industrialization affects the structure of international trade. Using conventional economic concepts such as economies of scale and monopolistic competition and considering both horizontal and vertical product differentiation, the model explicitly focuses on industrialization and its impact on the volume and share of intra- and inter-industry trade. The paper considers two processes: one that increases the quality of manufactured products and one that shifts labor from the agricultural to the manufacturing sector. The model shows that the volume and share of intra-industry trade increase when the quality of products in a developing country improves and when the difference in relative factor endowments between an industrial and a developing country shrinks. It also suggests that the faster a developing country industrializes, the faster intra-industry trade increases. This paper investigates empirically the structural changes in Japan's international trade with Indonesia and Korea for 1975 and 1985. These countries were chosen because they differ in their relative factor endowments and technology.
Imperfect Competition and the Design of VAT Regimes: the Case of Energy Trade between Russia and Ukraine [статья]
Опубликовано на портале: 22-12-2003Clinton R. Shiells IMF Working Paper Series. 2002. No. 02/235 .
Under imperfect competition, Russia and Ukraine may choose to deviate from optimal tax considerations which suggest use of a destination-based VAT regime. Oil and gas trade is a major source of Russian tax revenue, which is collected partly through an origin-based VAT on intra-CIS energy trade. The paper shows that Ukraine may try to capture part of the tax revenue if it has monopsony power. It is far from clear whether Ukraine would succeed in shifting the rents through taxation, since this depends on the form of imperfect competition and the curvature of Ukraine's import demand function.
Опубликовано на портале: 16-12-2003Oleh Havrylyshyn, Peter Kunzel IMF Working Paper Series. 1997. No. 97/47.
Arab countries today face prospects of trade liberalization as exemplified by the European Union Association Agreements. Whereas few short-term benefits are anticipated, increased competitiveness is expected to spur improvements to efficiency, stimulate foreign investment, generate growth possibilities, and present access to larger markets. Given that Arab countries face liberalization, this paper makes use of the Grubel-Lloyd intra-industry trade (IIT) index as an indicator of the degree of industrial specialization to study Arab countries' ability to compete in a more open trade setting. The objective thus is to analyze how specialized Arab economies are relative to other countries at present, how well they might adapt in the future what determines the level of specialization and finally in what products Arab countries are competitive. The results of the paper suggest that the Arab region overall does not have a highly advanced industrial base relative to other regions. In fact, the Arab IIT levels tend to be below expected values even in a cross-country regression using various determinants of IIT. Nevertheless, significant improvements in IIT levels over the last decade for most Arab countries and IIT indices in many manufactured products show signs of improved competitiveness and demonstrate Arab countries. ability to compete in specialized commodities. Finally, the paper presents arguments favoring a more multilateral approach to trade liberalization over a bilateral agreement with the EU alone, and suggests that market-oriented and open economy policies could yield significant gains in the form of increased specialization and higher IIT levels.
Liberalization of Trade in Financial Services and Financial Sector Stability (Analytical Approach) [статья]
Опубликовано на портале: 16-12-2003Alexei P. Kireyev IMF Working Paper Series. 2002. No. 02/138 .
The paper seeks to establish a link between the liberalization of trade in financial services undertaken by countries under the WTO and the stability of their financial systems. The paper concludes that liberalization has generally been conducive to stability because of the mutually reinforcing nature of existing international rules and practices. Financial stability and efficiency, which should be ultimate goals of further liberalization, can be ensured by taking advantage of coherent policy advice and the application of existing multilateral mechanisms-in particular, the WTO negotiations and the IMF/World Bank financial sector assessment program
Liberalization of Trade in Financial Services and Financial Sector Stability (Empirical Approach) [статья]
Опубликовано на портале: 16-12-2003Alexei P. Kireyev IMF Working Paper Series. 2002. No. 02/139 .
The paper explores empirically the links between the WTO-driven liberalization of trade in financial services and the stability of national financial systems. Econometric testing of indicators intended to proxy financial sector stability-subdivided into exchange rate and banking sector stability-suggests that opening of the financial sector is an efficient policy instrument at the disposal of the authorities for achieving a variety of macroeconomic goals. While liberalization is found to be broadly conducive to stability, the outcome of liberalization on exchange rate stability is less predictable than on banking sector stability.
Measuring the Impact of Distortions in Agricultural Trade in Partial and General Equilibrium [статья]
Опубликовано на портале: 22-12-2003Stephen P. Tokarick IMF Working Paper Series. 2003. No. 03/110 .
This paper provides quantitative estimates of the impact of removing agricultural support (both tariffs and subsidies) in partial- and general-equilibrium frameworks. The results show that agricultural support in industrial countries is highly distortionary and tariffs have a larger distortionary impact than subsidies. Removal of agricultural support would likely raise the international prices of food, resulting in an increase in the cost of food for many net-food- importing countries, although the increase is generally small. The results also show that most of the benefits from removing agricultural support accrue to the countries that liberalize.
Опубликовано на портале: 16-12-2003Oleh Havrylyshyn, Hassan M. Al-Atrash IMF Working Paper Series. 1998. No. 98/22.
During the Soviet period, trade of the economies of the region was highly inward-oriented; this was particularly marked for most of the republics of the USSR, but a bit less so for Russia. Independence and transition to the market should have resulted in two changes: increased external trade relative to GDP as the central planning restrictions on foreign trade were lifted; and strong reorientation of trade to the rest of the world to achieve a more normal geographic distribution as central plan directives were removed, with the extent and speed of such geographic diversification affected by the degree of structural reform achieved. The paper tests these hypotheses. For most countries in central Europe, as well as a few others, one observes a trade openness ratio similar to or at least approaching that of market economies of comparable size and level of development. Using a variant of the gravity model, the study also finds that geographic diversification to the European Union is greater the closer is geographic proximity and the more progress a country makes in structural reforms. The model is used to simulate the effects of more ambitious structural reforms. The results suggest that even for countries most advanced in reforms, one might still expect as much as an 8-10 percentage point increase in the level of exports to the European Union, and more for others. There are several important policy implications from these results. First, much remains to be done in terms of liberalization and structural reform in most transition economies, which will in turn promote further restructuring and resource reallocation and trade diversification. Second, greater access to European Union markets may give an added boost to reorientation of trade. Third, while the results suggest the importance of differentiating competitive exchange rates, the limited period of time precludes differentiating fully the effects of exchange rate stability from those of financial stability.
Опубликовано на портале: 22-12-2003Stephen P. Tokarick IMF Working Paper Series. 2002. No. 02/191 .
This paper uses an applied general equilbrium model to decompose the effects of changes in trade and technology-related variables on wages of skilled and unskilled labor between 1982 and 1996 in the United States. The results indicate that trade-related variables (tariff cuts, improvement in the terms of trade, and the increase in the trade deficit) had little impact on the widening wage gap. Also, changes in total factor productivity had a small effect on relative wages. The major factor behind the rise in the skilled wage relative to the unskilled wage was differential rates of growth in skill-biased technical change across sectors. The paper also highlights the role that nontraded goods play in explaining the wage gap. Finally, the paper presents estimates of the effect of trade on wages by calculating what wage rates would be under autarky. The results show that expanding trade could actually reduce wage inequality, rather than increase it. The welfare costs to the U.S economy of moving to autarky (using 1996 as a base) are about 6 percent of GDP.
Опубликовано на портале: 16-12-2003Aaditya Mattoo, Devesh Roy, Arvind Subramanian IMF Working Paper Series. 2002. No. 02/158 .
This paper describes the United States recently enacted Africa Growth and Opportunity Act (AGOA) and assesses its quantitative impact on African exports. The AGOA expands the scope of preferential access of Africa's exports to the United States in key areas such as clothing. However, its medium term benefits estimated at about US$100-$140 million, an 8 11 percent addition to current non-oil exports would have been nearly five times greater (US$540 million) if no restrictive conditions had been imposed on the terms of market access. The most important of these conditions are the rules of origin with which African exporters of clothing must comply to benefit from duty-free access.
Опубликовано на портале: 16-12-2003Allan D. Brunner IMF Working Paper Series. 2003. No. 03/37.
This paper examines the dynamic relationship between trade and income. While most economists agree that increased trade leads to an increase in average income, economic theory is ambiguous about the possible effects on the long-run growth rate of the economy. Using a dynamic panel data model, the hypotheses of no long-run effects of trade on income and on income growth are tested explicitly. The possibility of endogeneity is addressed by constructing an instrument for trade by extending Frankel and Romer's (1999) cross-sectional approach to the case of a panel data model. The empirical results indicate that trade has a large and significant effect on the level of income, but the effect on income growth is small and non-robust to model specification.
Опубликовано на портале: 16-12-2003Christopher Kent, Paul A. Cashin IMF Working Paper Series. 2003. No. 03/143 .
Is the relationship between the current account balance and the terms of trade affected by the persistence of terms of trade shocks? In intertemporal models of the current account that incorporate a consumption-smoothing and an investment response to shocks, the effect of the terms of trade on external balances is predicted to be dependent on the duration of terms of trade shocks. Using a median-unbiased estimator, an unbiased model-selection rule, and terms of trade data for 128 countries over the period 1960-99 we identify two groups of countries-those that typically experience temporary terms of trade shocks and those that typically experience permanent terms of trade shocks. The results from panel-data regressions of the two groups of countries support the theoretical predictions of the intertemporal approach to the current account. We find that the greater (lesser) the persistence of the terms of trade shock, the more (less) the investment effect dominates the consumption-smoothing effect on saving, so that the current account balance moves in the opposite (same) direction as that of the shock.
Опубликовано на портале: 16-12-2003Arvind Subramanian, Shang-Jin Wei IMF Working Paper Series. 2003. No. 03/185.
This paper furnishes robust evidence that the GATT/WTO has had a powerful and positive impact on trade. The impact has, however, been uneven. GATT/WTO membership for industrial countries has been associated with a large increase in imports estimated at about 40 percent of world trade. The same has not been true for developing country members, although those that joined after the Uruguay Round have benefited from increased imports. Similarly, there have been asymmetric effects among sectors, with WTO membership associated with substantially greater imports in sectors where barriers are low. These results are consistent with the history and design of the institution, which presided over significant trade liberalization by the industrial countries except in sectors such as food and clothing; largely exempted developing countries from the obligations to liberalize under the principle of special and differential treatment; but attempted to redress the latter by imposing greater obligations on developing country members that joined after the Uruguay Round.