International trade

Holger Breinlich, Dennis Novy, 16 August 2019

As Brexit nears (again), are British firms choosing to invest in the UK or in other European markets? Are European firms investing in the UK to preserve access to its markets? And has "global Britain" got off the drawing board yet? Holger Breinlich and Dennis Novy lead Tim Phillips through the numbers.

Olivier Accominotti, Stefano Ugolini, 05 August 2019

The 2008 crisis has revealed how banking and liquidity problems can have far-reaching consequences on global trade. This column reconstructs the evolution of global trade finance from the Middle Ages until today. Just like in medieval times, today’s global trade is predominantly financed through banks so that banking problems automatically transmit to international trade. In contrast, from the 16th to the 20th century, trade finance was mostly market-based. The decline of market-based trade finance was triggered by major geopolitical shocks.

Jacques Melitz, Farid Toubal, 01 August 2019

Artificial intelligence has made spectacular progress in recent years. One particular source of high expectations is automatic translation and whether it will finally bring about the long-predicted death of distance in trade. This column examines the impact of a common language on bilateral trade and finds that the net result of reducing linguistic frictions with a set of trading partners is not apparent.The potential impact of machine translation on foreign trade remains up in the air.

San Bilal, Bernard Hoekman, 31 July 2019

In today’s rapidly evolving and uncertain trade context, the EU has to reposition itself, adapting its trade and external policies to better pursue its economic interests, but also to achieve its political, geostrategic, developmental, environmental, and principles-based objectives. This column introduces a new eBook that brings together perspectives on such questions as whether the EU has been effective in its pursuit of non-trade policy objectives relating to standards, values, sustainability and development, and if so, whether this has been at the expense of more traditional trade policy objectives.

James Anderson, Mario Larch, Yoto Yotov, 30 July 2019

Foreign direct investment has traditionally been viewed as a key driver of prosperity, and modern FDI has also become a vehicle for transferring intangible assets. This column uses a counterfactual experiment based on a hypothetical world with no outward or inward FDI to and from low-income and lower-middle-income countries to examine the effects of FDI on trade, domestic investment, and welfare. World welfare falls by about 6% and all countries lose out, with some poorer countries losing over 50%. World trade falls by 7%, with the losses again unevenly distributed.

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