International trade

Victor Kummritz, Bastiaan Quast, 25 February 2017

Global value chains offer a new way for developing countries to industrialise. This column provides a deep examination of the pattern of developing countries’ integration in these chains and shows that changes in integration are increasingly driven by low- and middle-income countries, while the integration of high-income countries has begun to even out. It also shows that low- and middle-income countries are still more specialised in downstream activities and typically export less domestic value added.

Ambrogio Cesa-Bianchi, Fernando Eguren Martin, Gregory Thwaites, 23 February 2017

Banking crises tend to happen in ‘waves’ across countries. In examining why this occurs, this column shows how foreign financial developments in general, and global credit growth in particular, are powerful predictors of domestic banking crises. The channels seem to be financial rather than related to trade, and include transmission of market sentiment, cross-border portfolio flows, and direct crisis contagion.

Italo Colantone, Piero Stanig, 20 February 2017

The revival of nationalism in western Europe, which began in the 1990s, has been associated with increasing support for radical right parties. This column uses trade and election data to show that the radical right gets its biggest electoral boost in regions most exposed to Chinese exports. Within these regions communities vote homogenously, whether individuals work in affected industries or not. 

Yasuyuki Todo, 16 February 2017

From the US withdrawal from the TPP to the Brexit negotiations, the tide of trade policy is turning towards protectionism. This column outlines how this could create a vicious cycle of lower productivity and closed economies, and what Japan, as the world’s third largest economy, can do to prevent it. A combination of trade and investment liberalisation and inclusive policies will enable all citizens to enjoy the fruits of growth under globalisation.

Aqib Aslam, Emine Boz, Eugenio Cerutti, Marcos Poplawski-Ribeiro, Petia Topalova, 13 February 2017

A growing literature aims to understand the remarkable slowdown in global trade growth in recent years. This column discusses a chapter in the IMF’s October 2016 World Economic Outlook on the drivers of the trade slowdown, and compares the findings to those of other recent studies. It argues that a variety of factors have contributed to weak trade growth, with widespread anaemic economic activity and the change in its composition being among the key drivers. 

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