56 research outputs found
Productivity Matters for Trade Policy : Theory and Evidence
No full textThere is a growing literature that investigates the effect of trade liberalization on productivity. Nearly all such studies assume that trade policy is determined independently of productivity, hence it is exogenous. The author shows that this assumption is not valid in general, both theoretically and empirically, and that researchers may be underestimating the positive effect of liberalization on productivity when they do not account for the endogeneity bias. On the theory side, he demonstrates that under a standard political economy model of trade protection, productivity directly influences tariffs. Moreover, this productivity-tariff relationship partly determines the extent of liberalization across sectors even in the presence of a large exogenous unilateral liberalization shock that affects all sectors. The link between productivity and tariffs is maintained after the author includes in his political economy model a learning-by-doing motive of protection, which also serves as the source of liberalization. On the empirical side, he examines total factor productivity (TFP) estimates obtained at the firm level for Colombia between 1983 and 1998, and finds that more productive sectors receive more protection within this period. In estimating the effect of productivity on tariffs, he controls for the endogeneity of the two main right-hand-side variables-the inverse import penetration to import demand elasticity ratio and productivity-by using materials prices, the capital to output ratio, a measure of scale economies, and the TFP of the upstream industries as robust instruments. The author also accounts for the large trade liberalization between 1990 and 1992, and finds that the sectors with a higher productivity gain are liberalized less. Finally, he illustrates a system of equations estimation and shows that the positive impact of liberalization on productivity grows stronger when corrected for the endogeneity bias
Productivity matters for trade policy : theory and evidence
Get PDFThere is a growing literature that investigates the effect of trade liberalization on productivity. Nearly all such studies assume that trade policy is determined independently of productivity, hence it is exogenous. The author shows that this assumption is not valid in general, both theoretically and empirically, and that researchers may be underestimating the positive effect of liberalization on productivity when they do not account for the endogeneity bias. On the theory side, he demonstrates that under a standard political economy model of trade protection, productivity directly influences tariffs. Moreover, this productivity-tariff relationship partly determines the extent of liberalization across sectors even in the presence of a large exogenous unilateral liberalization shock that affects all sectors. The link between productivity and tariffs is maintained after the author includes in his political economy model a learning-by-doing motive of protection, which also serves as the source of liberalization. On the empirical side, he examines total factor productivity (TFP) estimates obtained at the firm level for Colombia between 1983 and 1998, and finds that more productive sectors receive more protection within this period. In estimating the effect of productivity on tariffs, he controls for the endogeneity of the two main right-hand-side variables-the inverse import penetration to import demand elasticity ratio and productivity-by using materials prices, the capital to output ratio, a measure of scale economies, and the TFP of the upstream industries as robust instruments. The author also accounts for the large trade liberalization between 1990 and 1992, and finds that the sectors with a higher productivity gain are liberalized less. Finally, he illustrates a system of equations estimation and shows that the positive impact of liberalization on productivity grows stronger when corrected for the endogeneity bias.Economic Theory&Research,Free Trade,Political Economy,Trade Policy,Trade Law
Japanese Trade Policy: Has Japan Jumped on the Bandwagon of Bilateralism
No full textSince its reopening to the rest of the world in 1868, Japan’s economy and trade policy have continued to evolve an prosper. However, in less than 50 years following the conclusion of World War II, Japan has propelled itself to becoming the world’s 3rd largest economy. Japan’s trade policy like the state of its economy has changed as well. In 50 years following the end of World War II a significant amount of trade liberalization occurred under the auspices of the General Agreement on Tariffs and Trade (GATT), and it’s successor the World Trade Organization (WTO). The formation of free trade agreements (FTAs) is a relatively new phenomenon not only in Asia, but worldwide. However, since the early 1990s the number of free trade agreements (FTAs) has skyrocketed. Despite their popularity in other parts of the world, FTAs were almost nonexistent in Asia until the formation of the Japan-Singapore FTA (JSEPA) in 2002. Using a qualitative choice model this paper attempts to identify the economic and political factors that determine the formation of FTAs in the case of Japan.Economic
A Comparative Analysis of Energy Policy: Europe vs. the US
No full textThis paper argues that the elasticity of demand for energy in the US and Europe is the
main driver of their energy related policy. First, elasticity of demand for energy, which is a
measure of how responsive people’s consumption of energy is to changes in energy prices and
people’s income, is broken down into its main components: Population distribution, existing
infrastructure, and historical economic drivers. Next, each subsection of these components are
investigated to show how they affect the elasticity of demand for energy. Finally, the socio-
political climates of both the US and Europe are analyzed to show the manifestation of policy
driven by the elasticity of demand for energy. Due to the high elasticity of demand for energy in
Europe, there exist policies that reflect the population’s ability to substitute for energy saving
alternatives. Likewise, in the United States, there is a relative lack of policies that incentivize
consumers to change their behavior due to the lower elasticity of demand for energy
Elementi medio-arabi nel nucleo egiziano della Sīrat Baybars
Get PDFSultano mamelucco al potere in Siria e in Egitto nella seconda metà del XIII secolo, Baybars è una delle figure più celebrate nella cultura araba. Il suo personaggio leggendario ha ispirato una serie di opere epiche che confluiscono nella cosiddetta Sīrat Baybars. Considerata un genere della letteratura araba risalente al periodo medievale della decadenza, la Sīrat Baybars presenta un testo caratterizzato da pesanti interferenze con le varietà dialettali proprie dei suoi autori anonimi. Questo articolo intende rintracciare, nel nucleo egiziano della Sīrat Baybars, alcune di queste interferenze tipiche del medio-arabo.Baybars, a Mamluk sultan that ruled in Syria and Egypt in the second half of the XIII century, is one of the most celebrated figures in the Arab culture and his legendary personage inspired a series of epic narratives that constitute the so called Sīrat Baybars. Often considered as a genre belonging to the Arabic literature composed during the medieval period of the decadence, the Sīrat Baybars shows interferences of the dialect(s) spoken by its unknown author(s) within the literary Arabic text. This paper deals with the detection of some of the interferences, i.e. its Middle Arabic features, that are recognizable in the Egyptian nucleus of the Sīrat Baybars
Trade Policy Determinants and Trade Reform in a Developing Country
Get PDFIn this paper, I start out with a standard political economy of trade policy model to guide the subsequent estimation of the determinants of trade policy in a developing country. I carefully test the model with Colombian data from 1983 to 1998 accounting for endogeneity and omitted variable bias concerns and then expand it empirically in several directions. I show that it is important to control for the impact of a drastic trade reform shock that affects all sectors and disentangle its effect from preferential trade agreements (PTAs). I find that protection is higher in sectors that are important exports for preferential partners which may be seen as a stumbling block effect of PTAs for Colombia. I also relax the assumption of fixed political weights that measure the extra importance of producers' welfare relative to consumers in the government objective. I measure the impact of sectoral characteristics on tariffs indirectly through political weights as a novel alternative to nonstructurally estimating them as determinants of protection. Accordingly, I obtain more realistic estimates for the political weights further contributing to the literature.Political economy of trade policy, trade liberalization, preferential trade agreements, empirical trade
Turkey: Temporary Trade Barriers as Resistance to Trade Liberalization with the European Union?
Get PDFTurkey has been an active user of antidumping since the 1990s and more recently added safeguards and countervailing duties to its temporary trade barriers (TTBs). Turkey is a founding member of the World Trade Organization and formed a customs union with the European Union (EU) in 1996. It has also signed numerous preferential trade agreements the EU has been involved in as part of its EU candidacy. The drastic intra and extra-group trade liberalization brought by the relations with the EU seems to be important determinants in the rise of Turkey’s contingent protection over the last decade. Moreover, apart from an increase in the number of initiations, the higher rate of initiations finding support and sluggishness in the removal of TTBs over time appear to have played a role in their build-up. Turkey has been significantly affected by the 2008-9 global economic crisis and at the same time kept increasing the use of TTBs. The increase as of 2009 was in line with the recent upward trend but the response to the crisis may come with a lag. In general, Turkey does not target established EU members with TTBs although there is no restriction. Turkey mainly targets developing countries, especially China, at rates disproportional to their import market share.Temporary trade barriers, antidumping, safeguards, countervailing duties, Turkey
Free Trade Agreements and External Tariffs
No full textThere has been a proliferation of preferential trade agreements within the last two decades. In this paper I analyze the effects of free trade agreements (FTAs) on external tariffs under a political economy setup. I extend the Grossman and Helpman (1995) model by determining tariff rates endogenously instead of assuming they are fixed during or after the formation of FTAs. I show that for an exogenously established FTA, the tariff rates that apply to non-members essentially decline once the FTA is formed. More importantly, I investigate the interaction between endogenous tariff determination and the feasibility of an FTA. I find that the expectation of tariff reductions under endogenous tariffs makes an otherwise feasible FTA under fixed tariffs become infeasible. However, if domestic import-competing sectors are relatively smaller, an FTA is more likely to be feasible as compared to fixed tariffs.Free trade agreements, political economy of trade policy, trade liberalization, feasibility
Resolution of failed banks by deposit insurers : cross-country evidence
Get PDFThere is a wide cross-country variation in the institutional structure of bank failure resolution, including the role of the deposit insurer. The authors use quantitative analysis for 57 countries and discuss specific country cases to illustrate this variation. Using data for over 1,700 banks across 57 countries, they show that banks in countries where the deposit insurer has the responsibility of intervening failed banks and the power to revoke membership in the deposit insurance scheme are more stable and less likely to become insolvent. Involvement of the deposit insurer in bank failure resolution thus dampens the negative effect that deposit insurance has on banks'risk taking.Banks&Banking Reform,Financial Crisis Management&Restructuring,Financial Intermediation,Corporate Law,Insurance&Risk Mitigation
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