International trade

Filippo di Mauro, Konstantins Benkovskis, Sante De Pinto, Marco Grazioli, 29 June 2016

In the ‘currency wars’ discussion, it is almost taken for granted that exchange rate depreciations will result in non-trivial export gains.  Using evidence from countries in Europe and Asia, this column argues instead that factors unrelated to prices/exchange rates often play a predominant role in shaping trade developments. Moreover, these factors affect export outcomes in a very diversified manner across countries, in part because of the interplay of global value chains.

Hiro Ito, Masahiro Kawai, 24 June 2016

China’s authorities have been promoting the renminbi as an international currency for international trade, investment, and finance. This column examines the experiences of the dollar, yen, and deutschmark from the 1970s to the 1990s. As long as China’s neighbouring economies keep using the dollar for international trade and financial activities, the rise of the renminbi as a trade invoicing currency may be as fast as the rise of China itself.

Masayuki Morikawa, 23 June 2016

The shifting balance between manufacturing and service industries in developed economies has significant implications for long-term growth and international trade. This column uses Japanese firm-level data to analyse the impact of ‘factoryless goods producers’ on overall productivity. As these producers specialise in tasks in which advanced economies have a comparative advantage, it is anticipated that when combined with falling production costs and trade liberalisation, they will contribute to economic growth.

Karan Bhatia, Simon J Evenett, Gary Clyde Hufbauer, 21 June 2016

In a recent speech, Jeff Immelt, CEO of General Electric, announced that in response to rising protectionism, his company was undertaking a profound shift in its corporate strategy to ensure that more production takes place closer to customers. This column highlights the trend towards localisation and, if this continues unchecked, the risks posed to the world economy.

Francisco Buera, Ezra Oberfield, 12 June 2016

Free trade often comes hand in hand with economic growth. The opportunity for gain is relatively small, according to quantitative models that rely on standard static mechanisms. This column introduces a model to study the diffusion of ideas across countries as a means of increasing productivity, and a quantitative assessment of the role of trade in the transmission of knowledge. How much the transmission of knowledge will impact productivity depends on the openness of the trading countries, current stock of knowledge, and a diffusion parameter.

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