Swati Dhingra, Karl Whelan, Luc Frieden, 29 June 2018

2 years on from the UK’s referendum vote to leave the EU, substantial questions about the path to Brexit remain. In this special edition of Vox Talks, Tim Phillips talks to Swati Dhingra, Karl Whelan, and Luc Frieden about how the process of Brexit negotiation is itself impacting UK households already, from food price inflation to bilateral trade relations across Europe. The data suggests these effects are not transitory, but will persist beyond the current climate of policy uncertainty.

Emine Boz, Gita Gopinath, Mikkel Plagborg-Moller, 11 February 2018

In international macroeconomics, it is typically assumed that the exchange rate between two trading partners matters most for trade prices, quantities, and terms of trade. This column presents evidence supporting an alternate view – that a country’s exchange rate relative to the US dollar is most important. This is because invoicing in dollars is common, even when the US is not part of a transaction. The findings have important implications for the conduct of monetary and exchange rate policies.

Julian di Giovanni, Andrei Levchenko, Isabelle Mejean, 11 February 2016

The business cycles of countries with greater bilateral trade and multinational production linkages are more closely correlated. But the meaning of this empirical relationship is not well understood. Some contend that these linkages allow for the transmission of shocks across countries, while others argue that countries that trade more with each other are similar in other ways and are thus subject to common shocks. Using data from France, this column examines the properties of international co-movement at the firm level. Even after controlling for common shocks, there is still substantial evidence of transmission of shocks through trade and multinational linkages. Furthermore, trade linkages matter more than multinational ones, especially when it comes to the aggregate impact. 

Ju Hyun Pyun, Jong-Wha Lee, 21 March 2009

This column claims that bilateral trade interdependence reduces the probability of inter-state military conflict. Moreover, global trade openness lowers the probability of conflict with the bilateral trade partner by a larger magnitude than bilateral trade does alone.

Gabriel Felbermayr, Farid Toubal, 19 July 2008

This column introduces the use of Eurovision song contest scores as a measure of cultural proximity. Unlike other measures, such as common language or religion, Eurovision scores are asymmetric and time-varying, allowing estimates to distinguish between two potential channels through which cultural proximity might affect trade: trade costs and consumer preferences.

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