International trade

Gabriel Felbermayr, Alexander Sandkamp, 10 October 2021

The recent combination of resurging demand and continuing disruptions in supply chains has led to a worrying return of inflation. In the EU, industry producer prices increased by 12.2% year-on-year in July 2021. This column argues that removing EU antidumping duties would at least partially ease the pressure on input and consumer prices. In contrast, the recent abandonment of China’s differential treatment in the EU’s antidumping legislation might even have contributed to increasing import prices.

Rabah Arezki, Yang Liu, 30 September 2021

Covid-19 has further exposed the growing interdependence between advanced economies and emerging markets. Most of the existing research on cross-border spillovers has focused on the spillover effects from advanced economies to emerging markets. This column shows that spillovers from emerging markets to advanced economies over the past 25 years are about a fifth of those running in the opposite direction, and have increased significantly over time because of the evolving interdependence between these blocks. 

Giacomo Magistretti, Marco Tabellini, 20 September 2021

Can democracy be exported? This column uses a large cross-country dataset from 1960 to 2015 to show that, while the ‘top-down’ imposition of political institutions is not desirable and rarely successful, democracy can indeed be ‘exported’ – from more democratic to less democratic countries – through repeated trade interactions. The finding suggests that economic integration might be advantageous to less democratic countries not only directly by fostering GDP growth, but also indirectly by favouring the transition to democracy and the socioeconomic and political benefits associated with it.

Natalie Chen, Dennis Novy, 17 September 2021

Many countries try to bring down trade costs by striking free trade agreements, forming currency unions or joining the WTO. But when trade costs fall, how much does trade increase? This column finds that the impact depends on how intensively countries trade. Falling trade costs boost trade between countries with initially ‘thin’ trading relationships where the scope for growth is largest. But they have a much weaker impact for country pairs that are already trading heavily.

Hongyong Zhang, 13 September 2021

COVID-19 has had large impacts on global production and international trade. The column uses quarterly aggregate-level data on foreign affiliates of Japanese multinational corporations to show that multinational production and supply chains were negatively affected by the COVID-19 pandemic, especially in the 2nd quarter of 2020. The sales of Japanese manufacturing affiliates almost recovered in the 4th quarter of 2020, indicating the resilience of global production and multinationals’ supply chains. But there are large variations in recovery across countries.

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