International trade

Gabriel Felbermayr, Marina Steininger, Erdal Yalcin, 22 November 2017

The Trump administration intends to restructure US international trade relations with its major trade partners to correct what it perceives to be unfair trade and establish a ‘level playing field’. This column uses a structurally estimated and simulated trade model to analyse three potential protectionist policies that have been discussed by the administration. The results suggest that the promise to create more jobs and investment in the US through such policies is a fallacy.

Lutz Kilian, Xiaoqing Zhou, 09 November 2017

Global commodity prices surged across the board after 2003, with some observers claiming that this reflected a permanent increase in global real economic activity. This column argues that this was a persistent but transitory phenomena tied to rising commodity demand from Asia. It presents evidence of a global economic slowdown since 2011, with low real commodity prices likely to persist.

Tomohiko Inui, Keiko Ito, Daisuke Miyakawa, 09 November 2017

Economists have recently tried to identify why some firms survive longer than others in export markets. This column examines the firm-level determinants of the duration of Japanese manufacturing firms’ exporting. It suggests that the degree to which products are differentiated matters for firms’ survivability, and that policies to support R&D activities thus indirectly contribute to increasing firms’ chances of survival in foreign markets.

Alan Auerbach, 26 October 2017

The rising importance of multinational companies and the changing nature of production represents a challenge to the traditional ways that countries try to tax corporate profits. This column examines one potential policy response – a destination-based cash-flow tax – which it argues would confront the key international problems of existing tax systems. It also addresses some of the concerns arising in particular from US proposals to introduce such a tax.

Hiau Looi Kee, Alessandro Nicita, 22 October 2017

More than a year has passed since the UK voted for Brexit. This column analyses the short-term fallout of trade in goods due to potential changes in trade policies. It argues that if the UK fails to secure a new trade deal with the EU and must face tariffs with no preferences, total UK's exports to the EU would drop by at most 2%. The impact is small because the EU's import demand for UK exports is fairly inelastic, especially for products that that may face higher tariffs.

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