Christopher Parsons, Pierre-Louis Vézina, 14 August 2018

One of the largest refugee waves in recent history was that of the Vietnamese boat people. This column examines the long-run effect of the resettlement of Vietnamese refugees across the US on exports from the US to Vietnam. The first wave of refugees in 1975 was followed by a 20-year trade embargo on Vietnam. Following the lifting of sanctions, the share of US exports going to Vietnam was higher and more diversified in the states with larger Vietnamese populations. This evidence of the pro-trade effect of immigrants is a reminder that hosting refugees can represent an investment in the future.

Alessandro Barattieri, Matteo Cacciatore, Fabio Ghironi, 09 August 2018

Populist politicians argue that protectionism stimulates the domestic economy. This column uses data on temporary trade barriers from antidumping investigations to show that when small open economies have imposed protectionist measures, it has caused inflation to rise and real economic activity to fall. Empirical analysis and model-based exercises show that protectionism is costly even when used temporarily, even for economies stuck in liquidity traps, and regardless of the flexibility of the exchange rate.

Edith Laget, Alberto Osnago, Nadia Rocha, Michele Ruta, 14 July 2018

The making and unmaking of trade agreements affects global production. This column reveals how deeper agreements have boosted countries’ participation in global value chains and helped them integrate in industries with higher levels of value added. Investment and competition now drive global value chain participation in North-South relationships, while removing traditional barriers remains important for South-South relationships.

Natalie Chen, Dennis Novy, 09 July 2018

Currency unions usually go hand in hand with deeper economic integration. But does that automatically mean more international trade? This column shows that since the end of WWII, currency unions have on average been associated with 40% more trade between member countries. The ‘thin’ relationships between countries who do not trade much with each other benefit the most from currency unions, with little in the way of a boost for more established trading relationships. 

Alessandra Bonfiglioli, Rosario Crinò, Gino Gancia, 10 June 2018

To date there has been little systematic evidence on the role of firms in explaining country performance. This column explores how the products of firms from all over the globe fare in competition in the US market. Results show that the countries that capture larger market shares have more exporters, producing higher-quality products, with a more dispersed distribution of firm attributes. Larger and richer markets are characterised by a more dispersed distribution of sales and quality, and a higher incidence of superstar firms.

Alan de Bromhead, Alan Fernihough, Markus Lampe, Kevin O'Rourke, 22 May 2018

The literature has identified several stylised facts which characterise the nature and causes of the collapse in international trade during 2008 and 2009. This column uses detailed, commodity-specific information on UK imports between 1929 and 1933 to document several similarities between the trade collapses of the Great Depression and the Great Recession. The findings are in line with theories emphasising the composition of expenditure changes during major economic crises, or the relative sizes of firms operating closer to or further away from the margin between exporting or not.

Kyle Bagwell, Robert Staiger, Ali Yurukoglu, 17 May 2018

It is widely accepted that the most-favoured nation rule – a fundamental feature of WTO negotiations – has both advantages and disadvantages. This column considers the empirical outcomes of tariff bargaining under the most-favoured nation rule versus outcomes where this rule is abandoned. It finds that the rule substantially increases welfare at the global level.

Barry Eichengreen, 06 April 2018

Problems that have recently been faced by Europe's financial system - from highly variable exchange rates to disrupted trade flows - also plagued advanced economies a century ago. Barry Eichengreen compares the problems of the Gold Standard to the European Monetary System, and the euro area. 

Vito Amendolagine, Andrea Presbitero, Roberta Rabellotti, Marco Sanfilippo, 24 January 2018

A new wave of foreign direct investment has swept sub-Saharan African countries, with inflows becoming more diversified both geographically and sectorally. This column presents an analysis that shows a high degree of complementarity between involvement in global value chains and FDI. Policies supporting the entry and upgrading of countries in such chains – especially via a strong institutional setting and a well-educated labour force – can help maximise the spillovers from foreign investment.

Koji Ito, Ivan Deseatnicov, Kyoji Fukao, 23 January 2018

The study of global value chains has become increasingly relevant as production becomes more and more fragmented across countries. This column uses evidence from Japan to evaluate recent theories that such chains have caused some of the country’s industries to become less competitive. The findings suggest that considering production for exports and domestic sales separately may provide a more complete picture of firm heterogeneity within industries, and a more complete picture of interconnected countries at the industry level.

Prateek Raj, 04 January 2018

In medieval Europe, trade depended on personal relationships, which were usually mediated by merchant guilds. The column argues that increasing incentives to do business with merchants outside the guild system, and the availability of better information about those trading partners, led to the decline of merchant guilds in the 16th century. This occurred first in coastal cities that were early adopters of printing technology.

Céline Carrère, Marcelo Olarreaga, Damian Raess, 15 December 2017

Protecting workers through the inclusion of labour clauses in trade agreements has become more common since the first such causes were included in NAFTA, but some argue that by increasing labour costs in developing countries, they represent a form of protectionism. This column uses new data to argue that there is no evidence for adverse effects on trade from labour clauses. When such clauses are strong, and if they emphasise cooperation in their implementation, they have a positive effect on the commercial interests of developing countries.

Filippo di Mauro, Vlad Demian, Jan-Paul van de Kerke, 08 December 2017

It is well-established in theoretical and empirical models that an exchange rate movement affects exports, but we are far from a consensus on the size and relevance of this effect. Macro-based analyses tend to yield very low values for the elasticity of exports to the exchange rate, while micro- or sectoral-based estimations tends to be higher. This column shows that one reason for the disagreement is that macro estimations fail to incorporate the characteristics of the underlying distribution of firm productivity and its asymmetries. Doing so generates higher elasticity estimates than the macro estimations, and greater country-level diversification.

Fabrice Defever, Alejandro Riaño, 01 December 2017

Received wisdom suggests that the majority of exporters in a country sell most of their output domestically. This column presents recent research that casts doubt on this assumption. The distribution of export intensity varies substantially and in most countries there are ‘twin peaks’, with some firms exporting a lot of their output, and others a little. This would be consistent with a standard model of international trade if the model were adjusted to recognise that firms differ in the demand they face in each market.

Benjamin Born, Gernot Müller, Moritz Schularick, Petr Sedláček, 28 November 2017

It is hard to calculate the current cost of Brexit, because there is no obvious counterfactual. This column calculates the cost by letting a matching algorithm determine which combination of comparison economies best resembles the pre-referendum growth path of the UK economy. The difference in output between the UK economy and its synthetic doppelganger adds up to a loss of 1.3% of GDP, or close to £300 million per week, since the vote took place. This implies a cumulative cost of more than £60 billion by the end of 2018.

Hylke Vandenbussche, William Connell, Wouter Simons, 27 November 2017

Global value networks make it difficult to evaluate the trade impact of Brexit. Using a new model of trade that accounts for the indirect effect of these networks, this column delivers fresh bad news for the UK, and for the rest of Europe. Brexit cuts GDP more, and costs more jobs, if we also consider global value chains. A hard Brexit would destroy four times as much GDP, and four times as many jobs throughout Europe, as a soft Brexit.

Catherine Mann, 23 October 2017

For the first time since the financial crisis, no country is showing contraction. However, Catherine Mann points out that there is a need for more investment, trade and globalisation in order to have sustained growth. This video was recorded at the "10 years after the crisis" conference held in London, on 22 September 2017.

, 06 September 2017

Will the UK remain in the EU's customs union? This video explains the implications of remaining in the customs union, and how it would affect trade. This video was recorded at the UK Trade Policy Observatory at the University of Sussex (UKTPO) in August 2017.

Hugo Erken, Philip Marey, Maartje Wijffelaars, 15 August 2017

Since taking office, US President Donald Trump has been an increasingly vocal proponent of protectionist measures. This column presents five reasons why he is unlikely to resort to full-blown protectionism: political motivations, WTO membership, the possibility of retaliation, the existence of global value chain integration and revenue streams, and the fact that automation rather than trade has caused most job losses in the US. If Trump does resort to protectionism, however, and other countries retaliate, US GDP could face cumulative losses of up to 4.5% over two years.

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