Essays On Macroeconomic Effects Of International Trade Barriers

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Essays On Macroeconomic Effects Of International Trade Barriers

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Author : Soo Kyung Woo
language : en
Publisher:
Release Date : 2023

Essays On Macroeconomic Effects Of International Trade Barriers written by Soo Kyung Woo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023 with categories.

"This dissertation is comprised of three essays regarding the role of trade barriers for international capital flows and prices. The study aims to understand the effect of changes in trade costs at various aspects: cross-country differentials, global integration, and within-country distributional effects. The first chapter studies the drivers of the US real exchange rate (RER), with a particular focus on its comovement with net trade flows. We consider the entire spectrum of frequencies, as the low-frequency movements account for 83% of the RER's unconditional variance. We introduce a model with heterogeneous firms facing sunk costs of exporting, financial shocks, and trade shocks. The model can fully capture the comovement of the RER and net trade flows at all frequencies, without compromising other major moments at the business cycle frequency. While financial shocks are necessary to capture the RER movements at higher frequencies, trade shocks are essential for lower frequency variation. The second chapter studies the factors accounting for the large, coincident increases in international borrowing and lending and international trade from 1970 to the present. We focus on the rise in annual changes in borrowing and lending across countries as summarized by the rise in the dispersion of the trade balance as a share of GDP. We show that these two salient features - a rise in net and gross international trade - are largely a consequence of a reduction in intratemporal trade barriers rather than a substantial reduction in the frictions on intertemporal trade or greater asymmetries in business cycles. Beyond explaining changes in the distribution of gross and net trade, the fall in frictions on intratemporal trade are consistent with the reduction in dispersion in other key macro time series such as the real exchange rate, terms of trade, and export-import ratio. The third chapter studies the dynamic effect of trade liberalization on wages and consumption, exploiting cross-region variation in the United States at the state level after the U.S.-Korea Free Trade Agreement. A key feature is a theoretically sound measurement of a regional exposure that takes into account the elasticity of substitution and covers all potential channels of tariff impacts. Using the measures for the Local Projection Method, I find that less protection at home is associated with a persistent negative impact: by the 8th quarter, a state at the upper quartile of the barrier cut experienced a decline in wage and consumption that is 1.56 and 1.04 percentage points larger, respectively, than a state at the lower quartile. However, cheaper access to imported inputs has a positive but temporary impact: by the 8th quarter, an upper quartile state experienced an increase in wage and consumption that is 1.62 and 1.45 percentage points larger, respectively. More opportunities to export have little effect."--Pages viii-ix.

Essays On The Macroeconomic Effects Of International Trade Policy

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Author : Carter Mix
language : en
Publisher:
Release Date : 2019

Essays On The Macroeconomic Effects Of International Trade Policy written by Carter Mix and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with Commercial policy categories.

"This dissertation is comprised of two essays regarding the way that aggregate economies respond to changes in international trade policy. Both chapters use quantitative models to determine the predicted effects of changes in either tariffs or trade costs on several aggregate variables. In the first chapter, I develop a multi-country heterogeneous firm model to study the aggregate effects of multilateral trade policy over time. The model captures the slow evolution of production and trade networks in response to trade policy as firms make durable and irreversible investments in sourcespecific productive capacity and destination-specific exporting capacity. It also incorporates capital, international assets, firms, and endogenous labor supply while still matching world geography. The model is calibrated to match size and trade flows of the US and its major trade partners as well as the split of trade between consumption, capital, and material goods. I find that the short run fluctuations in the economy following a policy change are a key determinant of the overall gains from trade and that transitions are not simply represented by gradual convergence to a new steady state. Futhermore, I find that the long-run effects of trade are poorly approximated by quantitative models without dynamics. While all the model features are important, the behavior of the domestic economy in the short- and long-run relies most on the semi-fixed trade networks and intertemporal trade incentives. The model is used to evaluate the effects on the US of being left out permanently or temporarily from a world trade liberalization. Being left out is quite costly, with losses in utility concentrated in the initial periods of the liberalization. The second chapter studies the importance of expectations and news regarding trade policy on the macroeconomy. We evaluate the aggregate effects of changes in trade barriers in a model in which trade responds gradually to changes in trade policy and trade policy changes are gradual. Our model offers insights into how changing trade barriers affects the economy and how business cycle shocks can affect trade. We find that a fall in current trade barriers has an expansionary effect while a decline in future trade costs can be recessionary on impact due to a wealth effect. Furthermore, canceling agreed upon declines in barriers is expansionary in the short-run but substantially lowers growth over the medium run. We also find that even controlling for composition, trade tends to lag the recovery in demand for tradables. We propose a method to separately identify expected and unexpected movements in trade costs. A dynamic model of trade requires both aggregate and forward-looking data to accurately identify the source of trade cost variation"--Pages vi-vii.

Non Tariff Barriers Regionalism And Poverty Essays In Applied International Trade Analysis

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Author : L Alan Winters
language : en
Publisher: World Scientific
Release Date : 2015-03-26

Non Tariff Barriers Regionalism And Poverty Essays In Applied International Trade Analysis written by L Alan Winters and has been published by World Scientific this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-03-26 with Business & Economics categories.

Non-Tariff Barriers, Regionalism and Poverty is a collection of key articles in three important areas of applied international trade research: measuring non-tariff barriers and their effects, the consequences of regional trading arrangements, especially on the countries excluded from them, and the connection between international trade and poverty. Drawing from 30 years of research and experience, L Alan Winters illustrates the development of techniques of this field and his continued commitment to answering real policy questions at the times at which they are debated. The collection shows the ways in which economic and econometric analysis can be used to answer real-world problems rigorously in the area of international trade and trade policy. Readers will find that some of the research included is of current methodological relevance and some of more historical significance. This volume is invaluable to anyone who is keen on developing their knowledge on trade policy, regionalism or poverty — three pressing issues in today's globalized world.

Essays In International Trade And Financial Economics

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Author : Huiwen Lai
language : en
Publisher:
Release Date : 2000

Essays In International Trade And Financial Economics written by Huiwen Lai and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2000 with categories.

This thesis includes three essays related to international economics and financial economics. The first essay presents a model of trade in the presence of multinationals, asymmetric trade barriers, and international differences in production costs. The first part of the essay presents the model's implications for bilateral trade. The estimation reveals more reasonable parameters for elasticity of substitution and trade costs than that suggested by previous research. The simulation indicates that tariff liberalization will shift trade from rich countries to poor countries and from preferential trading areas to inter-continental trading partners. The second part of the essay derives the multinational production and export equations implied by the model and estimates these equations simultaneously by recognizing the cross-equation restrictions on parameters and error terms. It suggests that the elimination of tariffs would substantially increase U.S. exports, but would not affect U.S. production abroad. The second essay models general equilibrium product price effects using the CES monopolistic competition model in international trade. We then estimate the model and, mimicking computable general equilibrium (CGE) models, use the model to estimate the compensating variation associated with trade liberalization. We find gains from trade liberalization that are much larger than those usually reported. In addition, extensive specification testing is conducted to evaluate the performances of this model and its alternatives. The results point to the types of model specifications needed before the model can usefully be applied to policy questions. The third essay studies the properties of Canadian interest rates relative to those of U.S. In sharp contrast to the U.S. evidence, the conditional variances of Canadian macroeconomics variables are found to be insignificant predictors of term premia in the Canadian T-bill term structure. However, the conditional variances of U.S. macroeconomic variables are found to be important determinants of Canadian premia.

Essays On International Trade And Macroeconomics

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Author : Chujian Shao
language : en
Publisher:
Release Date : 2022

Essays On International Trade And Macroeconomics written by Chujian Shao and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022 with categories.

In this dissertation, I focus on studying three questions about international trade including the interactions between trade and immigration, how trade liberalization influences skill upgrading decisions and the linkages between health investment and trade openness. In the first chapter, I develop a two-country dynamic stochastic general equilibrium model featuring endogenous firm entry, heterogeneous firms and endogenous labor migration to study whether trade and immigration are substitutes or complements and investigate the macroeconomic consequences of low barriers to labor mobility with emphasizing the roles of the extensive margins of production and trade in shaping immigration dynamics. First, the model predicts that trade and immigration potentially act as substitutes, which is consistent with the derivation from the Heckscher-Ohlin model of trade. Second, high-skilled labor migration makes the labor-sending country worse off due to less output and firm entry, and changes in migration costs create asymmetric welfare effects on high-skilled and low-skilled households. Third, the firm entry channel provides new insights into immigration dynamics: (i) more firm establishments demand more immigrants, and (ii) inflows of immigrants induce firm entry and result in higher labor costs in the long run. The second chapter is a joint work with Castiel Chen Zhuang and Qiliang Chen. We observe that India’s average applied effective tariff declines by about 15 percentage points and exports to the Indian market by Chinese manufacturing firms increase a lot from 2004 to 2007, but the change in the average tariff in the rest of the world is nearly zero during the same period. Motivated by this fact, we examine the impact of an Asian trade agreement, APTA, on skill upgrading by Chinese manufacturers. First, we develop a general equilibrium model of trade with heterogeneous firms and endogenous export and employee training decisions to explain firm performance following trade liberalization. Second, we test the theoretical model based on general difference-in-differences estimations, showing that firms facing higher reductions in India’s tariffs increase investment in on-the-job training faster. The effects of trade openness on export participation and training spending of firms are the largest in the middle range of productivity, which is consistent to our model prediction. In the third chapter, my co-author, Qiliang Chen, and I study the interactive effects of trade openness and health investment. There is a positive correlation between trade and health outcomes, and increased exports or imports encourage more healthcare spending. However, there are only few theoretical studies addressing the questions that if trade integration is good for health and if health improvement encourages more trade. We develop a two- country dynamic stochastic general equilibrium model with heterogeneous firms, health capital accumulation and endogenous firm entry and labor supply to analyze what channels affect the interconnection between trade and health. Three main results emerge. First, there is positive association between trade openness and health investment. An increase in health investment boosts both the number of exporters and export values as health improvement stimulates economic growth and increases income. Trade openness increases healthcare spending and the stock of health capital because of the income and product variety effects. Second, the dynamic impacts of changes in aggregate productivity on key variables could be underestimated if workers’ health status and health investment decisions are neglected. Third, health investment could crowd out physical capital investment and new firm entrants.

Essays On Institutional And Macroeconomic Aspects Of International Trade

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Author : David J. Kuenzel
language : en
Publisher:
Release Date : 2014

Essays On Institutional And Macroeconomic Aspects Of International Trade written by David J. Kuenzel and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.

The overarching theme of this dissertation is the analysis of institutional and macroeconomic factors that shape and interact with international trade. Chapters 1, 2 and 4 of this dissertation examine how institutional arrangements impact trade policy decisions and bilateral trade flows, while chapter 3 analyzes how the structural composition of trade affects macroeconomic development. Chapters 1 and 2 focus on the emergence of trade disputes in the World Trade Organization (WTO). Starting out in chapter 1 with a thorough stylized facts analysis of the usage pattern of the WTO dispute settlement mechanism, chapter 2 develops and empirically tests a model of members' selection into WTO disputes which can account for a number of key discoveries in the data. In particular, I extend the standard WTO theory by incorporating a link between endogenous trade policy formation and agreement violation and dispute filing decisions. I show that countries are more likely to engage in trade disputes as complainants or defendants when they have a small ``tariff overhang'', which represents the difference between bound tariffs (by WTO negotiations) and the actually applied tariffs. Chapter 3 considers the question whether the structure of a nation's trade flows has a clear-cut effect on economic growth. In the growth determinants literature, numerous alternative candidate regressors have been motivated by alternative theories but not one trade regressor has been robustly related to growth. Instead of relying on aggregate trade measures as previous studies, chapter 3 proposes a structured approach and examines the diversity of sectoral exports as a potential growth determinant. Controlling for model uncertainty and endogeneity, chapter 3 shows that export diversity serves as a crucial growth determinant for low income countries, an effect that weakens with the level of development. Chapter 4 examines to what extent underlying differences in the design of preferential trade agreements (PTAs) are responsible for the observed heterogeneity in PTA effects on bilateral trade flows. Controlling in the estimation framework for multilateral resistance terms and bilateral heterogeneity to reduce omitted variable and endogeneity biases, chapter 4 shows that PTAs focusing on goods trade liberalization and the legal enforceability of agreement provisions are most successful in raising trade flows. Moreover, countries' efforts to harmonize product standards and other regulations decrease bilateral trade flows, at least initially. The results also show that the underlying agreement dimension effects mostly operate through the intensive margin of trade.

Essays On International Economics

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Author : Roman David Merga
language : en
Publisher:
Release Date : 2022

Essays On International Economics written by Roman David Merga and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022 with Foreign trade regulation categories.

"This dissertation consists of three independent chapters on International Economics. The first two chapters focus on how and why uncertainty affects international trade. The last chapter focuses on how reductions in trade barriers affect wage inequality. In the first chapter, I show that higher domestic volatility discourages exporters' investments in foreign market access, explaining the lack of involvement in international trade by developing economies. At the cross-country level, I find that country TFP volatility explains 40% of the relationship between trade and GDP per capita. Using Colombian micro-level data, I document that exporters with higher domestic sales volatility export less. New exporters expand relatively less over their life cycle in industries with higher domestic sales volatility. This dampening of the firm-level export expansion path is amplified in products with more variable markups. Motivated by these novel firm-level findings, I develop an international trade model with new exporter dynamics and variable markups that can account for the novel facts at the firm and the cross-country levels. These findings suggest that trade frictions calculated using static trade models reflect the interactions of domestic volatility and exporters' investment decisions to grow into foreign markets. Indeed my quantitative findings show that the volatility differences across countries are equivalent to a 30% higher trade cost in developing economies. These volatility differences account for 40% of the differential trade cost estimated by standard models of international trade. In the second chapter, I use a new time-varying measure of real exchange rate uncertainty (RERU) and find a negative relationship between RERU and international trade at the aggregate level. A one standard deviation increase in RERU is associated with a 5% drop in total trade over GDP. Using Colombian firm-level data, I document three firm-level facts consistent with the existence of a precautionary motive in international trade. When RERU increases, exporters: 1) reduce their export intensity, 2) are more likely to stop exporting, and 3) are less likely to start exporting to new markets. Additionally, I document that this behavior is mostly explained by exporters paying higher interest rates and facing higher shipping lags. These micro-level findings explain the cross-country results and contrast with the predictions from standard sunk cost models used in international trade. I show that incorporating firm-level debt default and international shipping lags into these standard models is enough to reconcile these models with the novel facts. In the new model, an increase in the RERU increases the probability of an exporter ending up in a financially vulnerable situation. To hedge against this risk, exporters respond by increasing markups or quitting the export market, generating a drop in aggregate exports through both the intensive and extensive trade margins. Quantitatively, the extended model predicts that a one standard deviation increase in RERU generates a drop in total exports of around 6%, consistent with the aggregate findings. In the third chapter, we use detailed employer-employee data from Spain that goes from 1987 to 2004 to understand how international trade affects the wage distribution across workers. Using a new instrumental variable approach to disentangle trade openness's effects on the distribution of income and wages, we document that an increase in local trade exposure reduces wage inequality. Furthermore, we show that this result is associated with changes at the within-industry and within-firm levels. At the within-industry level, we show that trade openness reallocates workers towards small firms and low-skilled jobs. While at the within-firm level, we find that small firms increase their labor intensity and employment, while larger firms reduce both in response to changes in trade openness. These changes are consistent with an increase in the relative demand for low-wage and low-skill workers"--Pages ix-xi.

Essays In The International Aspects Of Macroeconomics

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Author : Kanit Kuevibulvanich
language : en
Publisher:
Release Date : 2017

Essays In The International Aspects Of Macroeconomics written by Kanit Kuevibulvanich and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.

I examine the dynamic effects of trade liberalization on wealth inequality and welfare. In the first essay, I develop a heterogeneous agent model with an incomplete asset market, small open economy with two production sectors, specific-factor trade model with costly-switching sector-specific labor and perfectly mobile capital across sector and border, and iceberg cost as the trade barrier. Trade liberalization, defined as the elimination of trade barrier, leads to the change in the relative prices, the demand and supply for each good, as well as the relative wages and factor allocations in each sector. Households maximize their lifetime value using the accumulated wealth as means of switching to the more productive sector. In the second essay, I perform counterfactual analyses using the calibrated model constructed in the first essay. Measured by the Gini coefficient of wealth, trade liberalization initially increases wealth inequality before tapering towards a more equitable wealth distribution in the long run, despite the increase in between-sector wage inequality. The counterfactual analysis demonstrates a peak increase in wealth inequality of 0.7% at 3 years after the policy implementation, but a 0.3% decrease in the long run. Comparing the steady states, trade liberalization leads to an average of 1.3% welfare improvement across all households, measured by the consumption equivalent variation. However, not all households benefit from the trade liberalization policy. In the third essay, I investigate the implication between the core and headline inflation in three aspects. First, while theories suggest the use of core inflation in forecasting total inflation as it represents the persistent components of the price level, I find from the data that core inflation is not necessarily a good forecasting measure in all countries. Second, I find the pass-through effect from total price level to core prices, suggesting the transmission from transitory components to persistent components of the price level. Third, I analyze the baseline Aoki (2001) model with sticky-price and flexible-price sectors. Although numerical result confirms the theoretical findings that core inflation targeting is the optimal monetary policy, the welfare loss resulting from the use of headline inflation as the target is small.

Essays On Macroeconomics In The Dominican Republic And Developing Countries

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Author : Peter A. Prazmowski
language : en
Publisher:
Release Date : 2004

Essays On Macroeconomics In The Dominican Republic And Developing Countries written by Peter A. Prazmowski and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with Developing countries categories.

International Trade Theory And Policy

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Author : Warner Max Corden
language : en
Publisher:
Release Date : 1992

International Trade Theory And Policy written by Warner Max Corden and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1992 with Business & Economics categories.

Max Corden has become established as one of the world's leading authorities on international trade theory. This text provides a selection of some of his most important work including, empirical work on protection and a review of the normative theory of international trade.