IMF Working Paper Series
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: 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.
Shock Versus Gradualism in Models of Rational Expectations: The Case of Trade Liberalization [статья]
Опубликовано на портале: 16-12-2003Leonardo Auernheimer, Susan Mary George IMF Working Paper Series. 1997. No. 97/122.
This paper presents another argument in favor of "shock versus gradualism" when implementing trade liberalization policies. In a small open economy in which agents have rational expectations, all policies are credible, and all gains from trade are production gains (an assumption made for simplicity), we show that gradually removing a tariff is in itself distortionary. A temporary, nonzero rate of change in the policy variable the falling tariff rate introduces an intertemporal relative price distortion between consumption and asset accumulation for the duration of the policy. An unanticipated, immediate removal of the tariff is always superior to a gradual removal. If the shock approach of reform is precluded, a gradualist program must be evaluated by comparing the usual permanent gains from free trade with the transitory welfare losses generated from the intertemporal distortion. For certain parameters, if the duration of liberalization is extended over too long a time period, gradualist policies may be worse from a welfare standpoint than not removing the tariff at all. An immediate implication is that a third policy option removing the tariff at once at a future date, without a previous announcement may be better than gradually removing the tariff starting at the present date. Such a policy delays the benefits of the intratemporal production gains but avoids the intertemporal distortion of a gradualist policy. In some cases the gains from avoiding these costs dominate the costs of delay.