Ting Lan, Davide Malacrino, Adil Mohommad, Andrea Presbitero, Galen Sher, 11 May 2022

Trade in goods has rebounded quickly from the pandemic, while trade in services has not. This column finds that the pandemic broke the old trade patterns and that lockdowns had unintended international spillovers. Although global value chains have adapted, ongoing supply disruptions and the risk of future adverse shocks point to the need for more resilient value chains. The authors argue that in contrast to those calling for reshoring, a better way to build resilience is to diversify away from domestic sourcing of inputs and make it easier for producers to substitute between inputs supplied by different countries.

Hylke Vandenbussche, Christian Viegelahn, 02 October 2016

In a world where production is increasingly fragmented across borders, a large number of firms import their raw material inputs from abroad. This column investigates how firms’ input and output choices are affected by import tariffs on inputs that domestic firms use in production. Based on firm-product level data for India, it finds that firms decrease their use of inputs subject to the tariff, relative to other inputs. Firms also decrease their sales of outputs made of these inputs, relative to other outputs.

Italo Colantone, Rosario Crinò, Laura Ogliari, 04 December 2015

Influential studies have shown that trade liberalisation is associated with substantial adjustment costs for workers in import-competing jobs. This column uses UK data to shed light on one such cost that has not been considered to date – subjective well-being. Import competition is found to substantially raise mental distress, through worsened labour market conditions and increased stress on the job. These findings provide evidence of an important hidden cost of globalisation.

Carlo Altomonte, Gábor Békés, 19 November 2010

The export performance of domestic firms is at the centre of many policy debates on growth and development. This column argues that in a world with global value chains and vertical specialisation, competitiveness also derives from a proper integration into international networks of production. Policymakers should care about both the import and the export capacity of their firms, and the complexity of these activities.

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