This block gives the general economic outlooks and their relation to international trade, as for instance given in UN/DESA's World Economic Situation and Prospects, in UNCTAD's World Investment Reports, and in national contributions such as Japan's White Paper on International Economy and Trade. It addresses related policy questions, such as the effects of globalization on economic growth, innovation, employment and sustainability, and the impact of international trade on job creation, taking into account the trading partner country or the kinds of product traded.
There is wide variation in the sizes of manufacturing plants, even within the most narrowly defined industry classifications used by statistical agencies. Standard theories attribute all such size differences to productivity differences. This paper develops an alternative theory in which industries are made up of large plants producing standardized goods and small plants making custom or specialty goods. It uses confidential Census data to estimate the parameters of the model, including estimates...
more »
Using confidential firm-level data from the United States in 2002, we show that exporting firms charge prices for narrowly defined goods that differ substantially with the characteristics of firms and export markets. We control for selection into export markets using a three-stage estimator. We have three main results. First, we find that highly productive and skill-intensive firms charge higher prices, while capital-intensive firms charge lower prices...
more »
The service sector is large and growing. Additionally, international trade in services is growing rapidly. Yet there is a dearth of empirical research on the size, scope and potential impact of services trade. The underlying source of this gap is well-known—official statistics on the service sector in general, and trade in services in particular, lack the level of detail available for the manufacturing sector in many dimensions...
more »
Simple measures show that there is proportionally less international trade in services than in goods, and survey evidence suggests that border barriers are important. But much service production is extremely localized within countries, reducing international trade independently of border barriers and thus befogging attempts to see the size of border barriers. The fog is pushed back in this paper by measuring the e ects of gravity on the services trade of Canada's provinces from 1997 to 2007...
more »
Services now constitute about 70 percent of global GDP.2 Moreover, foreign direct investment (FDI) flows have shifted toward services, and now constitute almost half of total FDI flows in developing countries.3 Recognizing their importance and the need to have special rules to treat trade in services, the General Agreement on Trade in Services (GATS) was incorporated into the World Trade Organization (WTO) when it was formed in the mid-1990s...
more »
This paper aims to define and develop methodologies, and to indicate use of indirect trade in steel. Indirect trade in steel – exports and imports of steel in the form of steel containing manufactured goods – is a crucial issue in steel demand estimations. Incorporating indirect trade in steel allows a more realistic picture of steel use across countries and in time...
more »
This paper examines the factors that give rise to intermediaries in exporting and explores the implications for trade volumes. Export intermediaries such as wholesalers serve different markets and export different products than manufacturing exporters. In particular, high market-specific fixed costs of exporting, the (lack of) quality of the general contracting environment and product-specific factors play important roles in explaining the existence of export intermediaries...
more »
Trade, like every other aspect of the economy, has been deeply affected by the global recession that started to emerge in the wake of the 2008 financial crisis. As this book goes to press, we are projecting a decline in world trade for the first time since 1982. Trade is not at the origin of the crisis, but since it binds economies closely together, it helps to spread developments from one country to another – the negative developments as well as the positive…
more »
Andrew B. Bernard
Raymond Robertson
Peter K. Schott
2010
Courant and Deardorff (1992) show theoretically that an extremely uneven distribution of factors within a country can induce behavior at odds with overall comparative advantage.We demonstrate the importance of this insight for developing countries. We show that Mexican regions exhibit substantial variation in skill abundance, offer significantly different relative factor rewards, and produce disjoint sets of industries...
more »
The crisis of confidence that was triggered by the bursting of the real-estate bubble in the United States in 2007 and reached its height with the failure of Lehman Brothers in September 2008 spread rapidly from the financial system to the real economy, leading to a broadly based fall in output and a collapse of world trade. In 2009 world GDP declined by 0.6 per cent,1 with a larger contraction in the first six months and a slight recovery in the third and fourth quarters...
more »
In many consumer-goods industries big-box retailers have become the gatekeepers of product variety. Manufacturers come knockin’ on these retailers’ doors to gain access to consumers. We first construct a general-equilibrium model of manufacturing and retailing in a global economy to study the causes and consequences of this development and how resources are being allocated between manufacturing and retailing...
more »
The Global Partnership for Development at a Critical Juncture
DESA
2010
The world economy is recovering from its most severe downturn since the Great Depression of the 1930s. The recovery is still very fragile and uneven, however. The global jobs crisis has not subsided, as can be seen from persistent high unemployment rates in the major developed countries and increased rates of underemployment and vulnerable employment in many developing countries. The lack of recovery in employment presents a risk for output recovery as it suppresses consumption and investment demand...
more »
Sébastien Miroudot
Jehan Sauvage
Ben Shepherd
2010
We present a new dataset of international trade costs in services sectors. Using a theory-based methodology combined with data on domestic shipments and cross-border trade, we find that trade costs in services are much higher than in goods sectors: a multiple of two to three times in many cases. Trade costs in services have remained relatively steady over the last ten years, whereas trade costs in goods have fallen overall at an impressive rate...
more »
This paper examines the new state practices of demand management and rescue policies. States have become innovative in the current crisis developing highly divergent responses to re-insert government in the management of the economy (Rodrik, 2008). The paper will argue that protectionism of the classical variety is a peanut-sized problem today and that states learned from the mistakes of the Great Depression when Everest-sized trade walls brought global trade to…
more »
Evidence from Selected Developing Countries and Future Research Agenda
UNCTAD
2010
The United Nations Conference on Trade and Development (UNCTAD) has been actively involved in research and programmatic activities on issues related to nontariff measures since the early 1980s. In 1994, it began to collect and classify non-tariff barriers (NTBs) according to a customized Coding System of Trade Control Measures…
more »
We live in an age of outsourcing. Firms seem to be subcontracting an ever expanding set of activities, ranging from product design to assembly, from research and development to marketing, distribution and after-sales service. Some firms have gone so far as to become "virtual" manufacturers, owning designs for many products but making almost nothing themselves.1 Vertical disintegration is especially evident in international trade. A recent annual report of the World Trade Organization (1998) details, for example, the production of a particular "American" car…
more »
Compared to the vast empirical literature on policies affecting trade in goods, the empirical analysis of services trade policy is still in its infancy. A major constraint has been inadequate data on policies affecting services trade, especially in developing countries. Previous research has tended to rely on secondary sources and policy commitments under international agreements (e.g. Hoekman 1996)...
more »
This paper evaluates some of the potential effects of EU-US TTIP economic integration on the trade in goods of 43 low-income countries (LIC) listed in Table 1. It first assesses the impact of removing the most-favoured nation (MFN) tariffs that apply to trade between the EU and the US. It then examines the impact of regulatory integration on sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBT) on LIC. These tariff and non-tariff barrier (NTB) assessments reached similar conclusions.
more »
Recent Trends in U.S. Services Trade, 2010 Annual Report focuses principally on infrastructure services (banking, electricity, insurance, retailing, securities, and telecommunications), which are consumed by every firm irrespective of economic sector. The largest infrastructure service firms are located in developed countries and offer their services globally through cross-border trade and affiliate transactions. Economic growth in developing countries around the world continues to create new opportunities for expansion and investment by infrastructure service firms...
more »
The current global crisis has exposed the risk of overdependence of the region on trade and investments with developed markets. Developed markets still absorb around half of the region’s exports, notwithstanding the gains achieved in fostering intra-regional trade over the years. Thus, in a post-crisis scenario, the region is continuing with its strategy of diversifying markets, while recognizing that a full “decoupling” from developed countries is neither feasible over the short term, nor would it be desirable...
more »
Jens Matthias Arnold
Beata Javorcik
Molly Lipscomb
Aaditya Mattoo
2010
Conventional explanations for the post-1991 growth of India’s manufacturing sector focus on goods trade liberalization and industrial de-licensing. We demonstrate the powerful contribution of a neglected factor: India’s policy reforms in services. The link between these reforms and the productivity of manufacturing firms is examined using panel data for about 4,000 Indian firms for the period 1993-2005...
more »
Structural reforms have gained momentum in the aftermath of the recent recession.
This has been driven in part by market pressures in the context of the euro area crisis and by discussions and co-ordinated efforts in multilateral settings such as the G20.1 There is increasing awareness of the necessity to accompany macroeconomic stabilisation policies with structural reforms. Yet, given the weakness of near-term demand prospects, the limited scope for macro policies to further stimulate demand and the still less than fully functioning financial sector in many countries, there is a risk that the benefits from reform may take more time to materialise than in a normal conjuncture...
more »
A Handbook on the Future of Economic Policy in the Developing World
Otaviano Canuto
Marcelo Giugale
2010
The global financial crisis of 2008–09 changed not only the global economic order, but also the way we think about that order. Principles and practices that were once accepted wisdom are now in doubt or discredited. New and fundamental questions have opened. And the search for answers has barely begun. For the countries of the developing world, this conceptual uncertainty is particularly uncomfortable—through a combination of good policies and good luck, they had begun to achieve real progress. Will all that now be derailed? What does the new horizon hold for them?...
more »
Firstly, what is the “value” of a Round? The long negotiating process has fueledthe wide perception that the Doha Round is not worth it. Section I shows that this perception is wrong by looking at the three alternative dimensions capturing the value of a Round…
more »
1. We, the Leaders of the G20, are united in our conviction that by working together we can secure a more prosperous future for the citizens of all countries...
more »
The fate of large firms helps explain economic volatility
The Economist
2013
Because economies are built of millions of firms and trading relationships, individual companies and export channels should not matter. Yet aggregate shocks do not explain volatility very well. Common shocks (to whole countries or global industries) explain only 45% of the variations. The data show that the picture of trade as millions of links is inaccurate; in fact, flows are extremely concentrated. A widely held view is that trade lowers volatility: exporting to more markets means greater diversification. But more foreign trade exposes economies more to the fortunes of large firms, since they trade disproportionately.
more »
This review traces the key issues relating to the global economy and developmaent strategies that have been addressed in UNCTAD’s Trade and Development Reports (TDRs) over the past three decades. It also intends to show how ideas, opinions and proposals expressed in the TDR, and the analytical approaches used, differed from those of proponents of “the mainstream” and how they evolved in response to new challenges arising from developments in the world economy...
more »
Post-crisis policy challenges in the world economy
UNCTAD
2011
Economic integration and interdependence in the world today have reached an unprecedented level. As a result, the globalized economy cannot function for the benefit of all without international solidarity and cooperation. This was highlighted by the global financial and economic crisis that followed the collapse of big financial institutions, and it has underlined the need for developing approaches to new forms of global collaboration ...
more »
The global upturn from what is considered the worst economic and financial crisis since the 1930s remains fragile, and a premature exit from demand-stimulating macroeconomic policies aimed at fiscal consolidation could stall the recovery. A continuation of the expansionary fiscal stance is necessary to prevent a deflationary spiral and a further worsening of the employment situation…
more »
In 2009, EU271 external trade in services2 slowed down compared with 2007 and 2008. EU27 exports of services to the rest of the word fell by 10%, from 524 billion euro in 2008 to 473 bn in 2009, and EU27 imports by 8%, from 446 bn to 409 bn. As a result, EU27 trade in services recorded a reduced surplus of 63 bn in 2009, compared with surpluses of 78 bn in 2008 and 87 bn in 2007...
more »
Specialisation or division of labour is an important source of economic growth, but the degree of division of labour is constrained by the extent of the market. Trade in tasks represents the latest turn in a virtuous cycle of deepening specialisation, expansion of the market and productivity growth. It has attracted a lot of attention in the policy debate not for its contribution to international division of labour and productivity growth...
more »
The media publish economic data on a daily basis. But who decides which statistics are useful and which are not? Why is housework not included in the national income, and why are financial data available in real time, while to know the number of people in employment analysts have to wait for weeks? Contrary to popular belief, both the availability and the nature of economic statistics are closely linked to developments in economic theory, the requirements of political decision-makers, and each country’s way of looking at itself...
more »
Overcoming the earthquake disaster, and restoring and strengthening global economic networks
METI
2012
The world economy has been gradually recovering since the spring of 2010, driven by emerging economies. However, with advanced economies failing to narrow the gap of growth rate with emerging economies in 2011, the emerging economies have further increased their presence. Global imbalances were temporarily improved through the world financial crisis, but were increasing again in 2010…
more »
Andrew B. Bernard
J. Bradford Jensen
Stephen J. Redding
Peter K. Schott
2010
We combine data on individual trade transactions from U.S. customs records with comprehensive information on firms' employment from the Census Bureau's business register to examine wholesalers and retailers in U.S. exports and imports. Exporters and importers with 100 percent employment in wholesale and retail differ from pure "producer and consumer" trading firms along a number of dimensions...
more »
Jobs provide higher earnings and better benefits as countries grow, but they are also a driver of development. Poverty falls as people work their way out of hardship and as jobs empowering women lead to greater investments in children. Efficiency increases as workers get better at what they do, as more productive jobs appear, and less productive ones disappear. Societies flourish as jobs bring together people from different ethnic and social backgrounds and provide alternatives to conflict. Jobs are thus more than a byproduct of economic growth. They are transformational—they are what we earn, what we do, and even who we are. High unemployment and unmet job expectations among youth are the most immediate concerns. But in many developing countries, where farming and self-employment are prevalent and safety nets are modest at best, unemployment rates can be low. In these countries, growth is seldom jobless. Most of the poor work long hours but simply cannot make ends meet. And the violation of basic rights is not uncommon.
more »
The global financial crisis has exposed serious weaknesses not only in the world economy but also in global economic governance. Fortunately, a remarkable spirit of multilateralism has prevailed in the responses to this upheaval. Countries have refrained, by and large, from resorting to protectionist measures. Governments have enacted stimulus packages, kept interest rates low and provided additional finance to the International Monetary Fund and the World Bank that is aimed at helping countries in need…
more »
The road to recovery from the Great Recession is proving to be long, winding and rocky
DESA
UNCTAD
UNECLAC
UNESCWA
2011
The road to recovery from the Great Recession is proving to be long, winding and rocky. After a year of fragile and uneven recovery, growth of the world economy is now decelerating on a broad front, presaging weaker global growth in the outlook. Weaknesses in major developed economies continue to drag the global recovery and pose risks for world economic stability in the coming years. There will be no quick fix for the problems these economies are still facing in the aftermath of the financial crisis…
more »
The world is on the brink of another major downturn
DESA
UNCTAD
UNECA
UNESCAP
2012
The world economy is teetering on the brink of another major downturn. Output growth has already slowed considerably during 2011 and anaemic growth is expected during 2012 and 2013. The problems stalking the global economy are multiple and interconnected. The most pressing challenges lie in addressing the continued jobs crisis and declining prospects for economic growth, especially in the developed countries. As unemployment remains high, at nearly 9 per cent, and incomes stagnate, the recovery is stalling in the short run owing to the lack of aggregate demand...
more »
Natural resources represent a significant and growing share of world trade, and properly managed, can provide a variety of products that contribute greatly to the quality of human life. They also present particular challenges for policy makers. The extraction and use of natural resources must balance the competing needs of current and future generations. The manner in which they are managed has important environmental and sustainability implications…
more »
