DOCSLIB.ORG

Read the Full Report

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Read the Full Report Beggar-Thy-Poor-Neighbour: Crisis-Era Protectionism and Developing Countries Beggar-Thy-Poor-Neighbour: The most vulnerable trading nations on Earth – the Least Developed Countries and countries from sub-Saharan Africa – have long been Beggar-Thy-Poor-Neighbour: encouraged by Western donors, international development organisations, and economists to integrate their economies into world markets. This volume examines the extent to which such integration was frustrated by Crisis-Era Protectionism and protectionist measures taking since the onset of the Great Recession. Drawing upon the data compiled by Global Trade Alert, an independent Developing Countries protectionist monitoring service, the policy stance towards Least Developed Countries and sub-Saharan African nations – both beggar-thy-neighbour and liberalising – are characterised and their effects analysed by experts knowledgeable about both of these groups of developing countries. The 15th GTA Report Implications for policymaking at the national and international level, including at the G20, are explored. Edited by Simon J. Evenett GLOB L Centre for Economic Policy Research TR DE 77 BASTWICK STREET • LONDON EC1V 3PZ • UK a a TEL: +44 (0)20 7183 8801 • FAX: +44 (0)20 7183 8820 • EMAIL: [email protected] LERT WWW.CEPR.ORg CEPR Press CEPR Press Beggar-Thy-Poor-Neighbour: Crisis-Era Protectionism and Developing Countries The 15th GTA Report Centre for Economic Policy Research (CEPR) Centre for Economic Policy Research 77 Bastwick Street London EC1V 3PZ UK Tel: +44 (0) 20 7183 8801 Fax: +44 (0)20 7183 8820 Email: [email protected] Web: www.cepr.org © CEPR Press, 2014 Beggar-Thy-Poor-Neighbour: Crisis-Era Protectionism and Developing Countries The 15th GTA Report Edited by Simon J. Evenett GLOB L TR DE a LERT About Global Trade Alert (GTA) Global Trade Alert provides information in real time on state measures taken during the current global economic downturn that are likely to discriminate against foreign commerce. Global Trade Alert is: Independent: GTA is a policy-oriented and research initiative of the Centre for Economic Policy Research (CEPR), an independent academic and policy research think-tank based in London, UK. Simon J. Evenett, the co-director of CEPR’s International Trade and Regional Economics Programme, is the coordinator of the GTA. Comprehensive: GTA complements and goes beyond the WTO, UNCTAD, and OECD’s monitoring initiatives by identifying those trading partners likely to be harmed by state measures. The GTA considers a broader range of policy instruments than other monitoring initiatives. Accessible: The GTA website allows policy-makers, exporters, the media, and analysts to search the posted government measures by implementing country, by trading partners harmed, and by sector. Third parties can report suspicious state measures and governments have the right to reply to any of their measures listed on the website. Transparent: The GTA website represents a major step forward in transparency of national policies, reporting not only the measures taken but identifies the implementing country, trading partners likely harmed, and product lines and sectors affected. Timely: The up-to-date information and informed commentary provided by Global Trade Alert will facilitates assessments of whether the G20 pledge not to “repeat the historic mistakes of protectionism of previous eras” is met, and the bite of multilateral trade rules. For further information, visit www.GlobalTradeAlert.org About the Centre for Economic Policy Research (CEPR) The Centre for Economic Policy Research is a network of over 800 Research Fellows and Affiliates, based primarily in European universities. The Centre coordinates the research activities of its Fellows and Affiliates and communicates the results to the public and private sectors. CEPR is an entrepreneur, developing research initiatives with the producers, consumers and sponsors of research. Established in 1983, CEPR is a European economics research organization with uniquely wide-ranging scope and activities. The Centre is pluralist and non-partisan, bringing economic research to bear on the analysis of medium- and long-run policy questions. CEPR research may include views on policy, but the Executive Committee of the Centre does not give prior review to its publications, and the Centre takes no institutional policy positions. The opinions expressed in this report are those of the authors and not those of the Centre for Economic Policy Research. CEPR is a registered charity (No. 287287) and a company limited by guarantee and registered in England (No. 1727026). Chair of the Board Guillermo de la Dehesa President Richard Portes Director Richard Baldwin Research Director Kevin Hjortshøj O’Rourke Contents Foreword vii 1. Beggar-thy-poor-neighbour: The incidence of protectionism in LDCs and Sub-Saharan Africa 1 Simon J. Evenett Part One: The Impact of Protectionism on Developing Countries 2. Free trade, protectionism and the balance of trade: New empirical insights 13 Evans S. Osabuohien, Uchenna R. Efobi and Ibunkun Beecroft 3. Trade measures of OECD countries and the decline in exports of African countries: Is murky protectionism responsible? 25 Adugna Lemi 4. Protectionist trade policy instruments in the global economic crisis: An impact analysis from Africa-EU and Africa-US trade relations 47 Olayinka Idowu Kareem 5. SADC Crisis-era trade policy and its effects on intra-regional trade and investment 63 Albert Makochekanwa and Emson F. Chiwenga 6. The economic crisis and the protection of domestic workers: The case of the Foreign Workers First Out policy in Malaysia’s manufacturing sector 71 Bethuel K. Kinuthia, Remco H. Oostendorp and Jacob A. Jordaan Part Two: Country Specific Data on the Incidence of Crisis-Era Protectionism on the Least Developed Countries and on Africa Afghanistan 85 Angola 89 Bangladesh 93 Benin 98 Bhutan 102 Burkina Faso 104 Burundi 106 Cambodia 109 Central African Republic 112 Chad 114 Comoros 117 Democratic Republic of the Congo 120 Djibouti 124 Equatorial Guinea 126 vi Beggar-Thy-Poor-Neighbour: Crisis-Era Protectionism and Developing Countries Eritrea 129 Ethiopia 131 Gambia 136 Guinea 139 Guinea-Bissau 142 Haiti 144 Kiribati 146 Lao People’s Democratic Republic 148 Lesotho 150 Liberia 152 Madagascar 155 Malawi 158 Mali 162 Mauritania 165 Mozambique 169 Myanmar 173 Nepal 177 Niger 180 Rwanda 182 Samoa 185 Sao Tome and Principe 187 Senegal 189 Sierra Leone 193 Solomon Islands 197 Somalia 199 Sudan 201 Timor-Leste 206 Togo 208 Tuvalu 212 Uganda 214 United Republic of Tanzania 218 Vanuatu 223 Yemen 225 Zambia 228 Foreword Global Trade Alert (GTA) was established in 2009 because of the widespread concern that governments would respond to the global financial crisis with 1930s-style across-the board tariff increases. Fortunately, such tariff increases have not materialised, but the work done by GTA has revealed very clearly the widespread implementation of a range of other discriminatory measures, for example industry-specific subsidies and bailouts. Such measures can have a significant impact on the exports, growth and employment levels of a country’s trading partners. For the developing and poor economies, the impact can be substantially greater. Supporting the integration of the poorest nations into the world economy has rightly been a long-standing objective of international development policy. Such integration would, it was argued, improve the allocation of resources, create opportunities to export and to participate in cross-border supply chains, encourage the upgrading of technology, improve productivity growth and reduce poverty. As the global economic crisis unfolded in 2008 and 2009 there were widespread fears that the clock would be turned back on the integration of developing countries into the global economy. It continues to be a cause of major concern today, and especially for many African economies and the least developed countries (LDCs) that have a weak capacity to absorb shocks from the outside, including those generated by trading partners tempted by protectionism. It is important to understand the impact of crisis-inspired protectionism on these countries. GTA has collected a large amount of information on government measures that affect (both beneficially as well as adversely) the commercial interests of African economies and LDCs. GTA also commissioned several studies by independent researchers that were presented at a conference involving policymakers in Accra in June 2012. Drawing upon the data collected by GTA, this volume includes original analyses of the impact of this protectionism on African economies and LDCs. The result is, we hope, an original and important analysis of the impact of crisis-inspired protectionism on African economies and LDCs. We are very grateful to the UK Department for International Development (DFID) for financing this component of GTA’s work and to the other financial supporters of the Global Trade Alert project, including the Canadian International Development Research Centre (IDRC) and the University of St. Gallen. The activities that led to this volume would not have been possible without the enthusiastic cooperation of the African Center for Economic Transformation (ACET), under the very able leadership of Dr. K.Y. Amoako. In addition, Dr. Nicolas Depetris Chauvin, Senior Adviser at ACET, provided crucial intellectual support for the project, and the conference in Ghana was expertly organised by Mrs. Sheila Ochugboju. Thanks are also due to colleagues
Load more

Recommended publications
  • Structural Change in the World Economy and Forms of Protectionism
    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Altvater, Elmar Article — Digitized Version Structural change in the world economy and forms of protectionism Intereconomics Suggested Citation: Altvater, Elmar (1988) : Structural change in the world economy and forms of protectionism, Intereconomics, ISSN 0020-5346, Verlag Weltarchiv, Hamburg, Vol. 23, Iss. 6, pp. 286-296, http://dx.doi.org/10.1007/BF02925126 This Version is available at: http://hdl.handle.net/10419/140159 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu PROTECTIONISM Elmar Altvater* Structural Change in the World Economy and Forms of Protectionism Warnings about the dangers of protectionism are being heard from a// sides at present. However, rehearsing the advantages of free trade and the drawbacks of protectionism is to/itt/e avai/ if it fai/s to take account of the/imitations that the internationa/ context imposes on nationa/ economic po/icy.
    [Show full text]
  • A. the GATT and the BWI
    International Organizations Law Review 3: 267–315, 2006 ©2006 Koninklijke Brill NV, Leiden, The Netherlands. INTERNATIONAL ECONOMIC POLICY-MAKING: EXPLORING THE LEGAL LINKAGES BETWEEN THE WORLD TRADE ORGANIZATION AND THE BRETTON WOODS INSTITUTIONS JAN WOUTERS1 AND DOMINIC COPPENS2 This contribution aims to shed some light upon the legal relationship between the three main pillars of the international economic architecture: the World Trade Organization (WTO), and its predecessor the GATT 1947, focusing on trade; the International Monetary Fund (IMF or Fund), guarding international monetary and financial stability; and the World Bank, specializing in the field of development. We will examine various aspects of the legal interactions between, on the one hand, the GATT/WTO, and, on the other hand, the IMF and the World Bank, labeled as the Bretton Woods Institutions (BWI). The general legal linkages between the three institutions are first of all explored from a historical perspec- tive (Section I). Section II elaborates upon the different levels of consultation between the WTO and BWI, whereas Section III discusses the involvement of the WTO and BWI in the deliverance of Aid for Trade, which by definition raises interesting questions of collaboration between aid and trade institutions. Finally, various aspects of the legal interactions between the WTO and the BWI are analysed more in depth (Section IV), namely, (i) the relationship between BWI programmes and WTO rules (the substantive level), and (ii) the role of the BWI in the dispute settlement
    [Show full text]
  • A Patchwork Planet 29
    patchwork A planet beneficial co-operation of governance. If so, you are likely find- The Covid-19 crisis has exposed the ing the coronavirus crisis even more depressing. From Donald arbitrary way in which we have stitched Trump’s branding of the disease as a specifically “Chinese virus” and his defunding of the World Health Organisation (WHO), to globalisation together. It’s time to go the violation of rules about sharing medical data and an unseemly back to first principles, and tailor a new scramble to secure masks and ventilators amid unilateral export restrictions, there is scant sign of global harmony just now. set of international rules around them The irony, of course, is that at the same time the virus risks setting globalisation (as we have conventionally understood it) spinning into reverse, it is also affirming anew our shared fate dani rodrik as human beings. That might seem like a paradox, but in fact our present-day globalisation is not and never has been the only way—or the best way—of meshing together our economies and other interests. And it is not only scholars in ivory towers who are wondering if this is a moment for a reset. hat do you think of when you hear the word “glo- President Macron of France is both a determined economic balisation?” It might well be the usual newspa- liberal and former investment banker, and yet he used a major per illustration—the container ship that moves interview with the Financial Times in April to concede that amid merchandise round the world.
    [Show full text]
  • English Geneva, 19 May 1998
    WORLD TRADE WT/FIFTY/H/ST/1 19 May 1998 ORGANIZATION (98-2004) 50th ANNIVERSARY Original: English Geneva, 19 May 1998 SINGAPORE Statement circulated by H.E. Mr. Goh Chok Tong Prime Minister The Multilateral Trading System: Challenges and opportunities 1. This is an important occasion to toast the success as well as ponder over the future of the multilateral trading system. 2. Together with the Bretton Woods Institutions, the GATT has provided the foundation for post-war global prosperity. Through a non-discriminatory system of rules governing international trade, it has underpinned the robust post-war growth in trade and output. Without the multilateral trading system, the world would not be as prosperous as it is today, nor as peaceful. 3. The benefits of multilateral trade cannot be evenly spread by decree. Each country has to compete for its share of the benefits through its own hard work, efficiency and competitiveness. Competition is tough, but every country can find some areas where they can do well. 4. Developing countries have shown this to be true. Over the past decade, their share of world trade has increased from 20 per cent to 25 per cent, while their share of trade in manufactured goods has doubled from 10 per cent to 20 per cent. 5. The remarkable success of the GATT, however, is rather recent history. The “beggar-thy-neighbour” policies that were pursued duringthe inter-war period broughtdisaster to world trade and the global economy and contributed to the 2nd World War. The most-favoured-nation principle is very much a post-war phenomenon.
    [Show full text]
  • Trade Policy and Imperfect Competition
    CAVE.6607.cp12.p203-226 6/6/06 11:21 AM Page 203 CHAPTER 12 Trade Policy and Imperfect Competition n this chapter the focus on trade policy shifts in two ways. We depart from the assumption that markets for goods, services, and factors of production are purely Icompetitive and allow for elements of monopoly and oligopoly. The effects of these market structures are studied mainly in individual markets (partial equilibrium) rather than in the economy as a whole (general equilibrium). Second, because many practical issues of trade policy, both old and new, turn on imperfect competition, we align the theory closely with its empirical applications. 12.1 Monopoly and the Gains from Trade The most basic connection between imperfect competition and international trade lies in the ability of international competition to limit distortions caused by monopolies in a nation’s product markets.We show this theoretically; then we consider evidence from real-world markets. Monopoly and Import Competition “The tariff is the mother of the trusts” was a charge heard often in the United States at the end of the nineteenth century. It meant that domestic producers who had worked out collusive agreements among themselves could not raise prices and exploit con- sumers without help from tariffs, which kept import competition away. Indeed, the gains from trade are amplified when foreign competition undercuts a monopoly’s abil- ity to raise its price above long-run marginal cost (the benchmark for an efficient, competitive price). This is illustrated in Figure 12.1, which shows not the monopoly’s demand and cost curves but the effect of its behavior on resource allocation for the economy as a whole.
    [Show full text]
  • Volatility and the Gains from Trade
    NBER WORKING PAPER SERIES VOLATILITY AND THE GAINS FROM TRADE Treb Allen David Atkin Working Paper 22276 http://www.nber.org/papers/w22276 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 May 2016 We thank Costas Arkolakis, Kyle Bagwell, Dave Donaldson, Jonathan Eaton, Marcel Fafchamps, Pablo Fajgelbaum, Sam Kortum, Rocco Machiavello, Kiminori Matsuyama, John McLaren, Steve Redding, Andres Rodriguez-Clare, Esteban Rossi-Hansberg, Chang-Tai Hsieh, Andy Skrzypacz, Jon Vogel and seminar participants at Columbia University, George Washington University, Harvard University, the NBER ITI Winter Meetings, Pennsylvania State University, Princeton University, Princeton IES Summer Workshop, Purdue University, Stanford University, University of British Columbia, University of California - Berkeley, University of California - Davis, University of North Carolina, University of Toronto, and University of Virginia. We thank Scott Fulford for kindly providing the rural bank data we use. Rodrigo Adao, Fatima Aqeel, Masao Fukui, Annekatrin Lüdecke, and Yuta Takahashi provided exceptional research assistance. Part of this paper was completed while Allen was a visitor at the Stanford Institute for Economic Policy Research (SIEPR), whose hospitality he gratefully acknowledges. All errors are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications. © 2016 by Treb Allen and David Atkin. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source.
    [Show full text]
  • A) the Economic Rationale for Trade Net Effect on the Terms-Of-Trade, but Lead to a Agreements Contraction of Trade Volumes Which Reduces Overall Welfare (See Box 1
    II – B FLEXIBILITY IN TRADE AGREEMENTS B FLEXIBILITY IN TRADE AGREEMENTS The aim of this section is to: (a) clarify what Economists have identified several rationales for justifies the inclusion of contingency measures in the existence of trade agreements, such as those trade agreements; (b) provide an account of all embodied in the WTO, and its antecedent, the circumstances when a suspension of commitments General Agreement on Tariffs and Trade (GATT). may make economic sense; and (c) identify the Two main approaches can be distinguished.1 The flexibility measures built into WTO agreements. first states that in the absence of a trade agreement, The section provides a framework for the discussion a country may be tempted to manipulate the of specific contingency measures in the subsequent terms-of-trade (i.e. the price of its exports relative sections of the Report. to its imports) in order to increase its national income at the expense of its trading partners. The 1. ECONOMIC THEORIES OF second approach stresses the economic and political TRADE AGREEMENTS AND THE difficulties that governments face in setting trade policy. As discussed below, trade agreements allow ROLE OF FLEXIBILITIES governments to escape terms-of-trade conflicts and/ or to resist pressures from the private sector and Trade agreements aim to strike a balance between special-interest groups urging the government to flexibility and commitments. If there is too deviate from a liberal trade policy. much flexibility, the value of the commitment is undermined. If there is too little flexibility, countries i) The traditional approach to trade agreements may refuse to make deep commitments or may easily renege on such commitments.
    [Show full text]
  • Gains from Trade When Firms Matter
    Journal of Economic Perspectives—Volume 26, Number 2—Spring 2012—Pages 91–118 Gains from Trade when Firms Matter Marc J. Melitz and Daniel Trefl er hhee ggainsains ffromrom llong-distanceong-distance iinternationalnternational ttraderade hhaveave bbeeneen uunderstoodnderstood aandnd eexploitedxploited ssinceince pprehistoricrehistoric ttimes.imes. OOurur ppre-urbanre-urban aancestorsncestors wwereere bbenefienefi t-t- T ttinging ffromrom llong-distanceong-distance ttraderade iinn oobsidianbsidian ssomeome 10,00010,000 yyearsears aago;go; PPlato’slato’s AAcademycademy wwasas bbuiltuilt oonn tthehe pprofirofi tsts ofof AthenianAthenian silversilver exports;exports; andand RomeRome waswas notnot builtbuilt iinn a ddayay ppartlyartly bbecauseecause ggoodsoods mmovedoved ttoooo sslowlylowly iinn tthehe vvastast RRomanoman ttraderade nnetwork.etwork. BButut wwhereashereas ttraderade wwasas ooncence ddominatedominated bbyy tthehe mmovementovement ooff ggoodsoods tthathat ccouldould oonlynly bbee pproduced,roduced, hharvested,arvested, oorr mminedined rregionally,egionally, tthehe internationalinternational tradetrade landscapelandscape iiss nnowow ddominatedominated bbyy ttwowo sstrikingtriking facts.facts. TheThe fi rstrst isis thethe riserise ofof intra-industryintra-industry trade—trade— tthathat iis,s, ttwo-waywo-way ttraderade iinn ssimilarimilar pproducts.roducts. CChinesehinese cconsumersonsumers ccanan nnowow bbuyuy a mmidsizeidsize ccarar ffromrom TToyotaoyota ((Japan),Japan), KiaKia ((Korea),Korea), GGeneraleneral MotorsMotors (United(United
    [Show full text]
  • Beggar Thy Neighbour: Exchange Rate Regime Misadvice from Misunderstandings of Mundell (1961)
    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Pope, Robin Working Paper Beggar Thy Neighbour: Exchange Rate Regime Misadvice from Misunderstandings of Mundell (1961) Bonn Econ Discussion Papers, No. 1/2007 Provided in Cooperation with: Bonn Graduate School of Economics (BGSE), University of Bonn Suggested Citation: Pope, Robin (2007) : Beggar Thy Neighbour: Exchange Rate Regime Misadvice from Misunderstandings of Mundell (1961), Bonn Econ Discussion Papers, No. 1/2007, University of Bonn, Bonn Graduate School of Economics (BGSE), Bonn This Version is available at: http://hdl.handle.net/10419/22976 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen
    [Show full text]
  • Ma Finalsemester Subject Code: Maeco502 International Economics
    1 M.A (ECONOMICS) MA FINALSEMESTER SUBJECT CODE: MAECO502 INTERNATIONAL ECONOMICS 2 BOARD OF STUDIES 1. Prof. S.K Nayak Head Chairman (Ex-officio) Dept. of Economics, RGU Member 2. Prof. A. Mitra Dept. of Economics, RGU Member 3. Prof. (Ms.) V. Upadhyay Dept. of Economics, RGU Member 4. Prof. N.C Roy Dept. of Economics, RGU Member 5. Prof. M P Bezbaruah Dept. of Economics, Guwahati University, Guwahati Member 6. Dr. RajuMondal Dept. of Economics, Assam University, Silchar, Assam Member Secretary 7. Dr. LijumNochi Dept. of Economics, RGU Authors: - Prof. S.K. Nayak, Dept. of Economics, RGU & Dr. R.K. Mandal, Dept. of Economics, DNGC, Itanagar (Unit: I & II) Prof. S.K. Nayak, Dept. of Economics, RGU & Dr. A.I. Singh, Dept. of Economics, DNGC, Itanagar (Unit: II & X) Dr. Lijum Nochi & Mr. Nyage Riba, Dept. of Economics, RGU (Unit: IV & V) Dr. D.B. Gurung, Dept. of Economics, RGU (Unit: VI, VII & VIII) Dr. Kaju Nath, NIT, Agartala (Unit: IX) 3 SYLLABI-BOOK MAPPING TABLE PAPER NO: MAECO502 INTERNATIONAL ECONOMICS SYLLABI Mapping in Book UNIT- I: COMPARATIVE COST AND OPPORTUNITY COST MODELS Ricardo’s Model of Comparative Advantages - Modified Ricardian Theory (Elaboration and Refinement) - Haberler’s Opportunity Cost Theory - Trade under Increasing, Decreasing And Constant Cost Conditions UNIT-II: TRADE, FACTOR ENDOWMENTS AND FACTOR PRICE Leontief Paradox - Stolper-Samuelson Theorem: Factor Price Equalization Theorem - International Trade and Imperfect Competition UNIT- III: TERMS OF TRADE Meaning of Terms of Trade UNIT-IV: TARIFF Arguments
    [Show full text]
  • MARKUS BRUNNERMEIER Twitter: @Markuseconomist Markus’ Intro
    Intro: MARKUS BRUNNERMEIER Twitter: @MarkusEconomist Markus’ intro . Previous/future webinars . Michael Kremer: Vaccine development . Penny Goldberg: Global value chains . Daron Acemoglu: On the benefits of targeted policies . Speakers bcf.Princeton.edu bcf.Princeton.edu Website: http:// World Order Rule/institution based Outcome based . Predictability . Flexibility . in a complex world . Limits reactions to shocks . Less symmetric . Fewer -ve feedback loops . Less stable . Trade wars . Currency wars 5/4/2020 3 World Order Rule/institution based Outcome based . Predictability . Flexibility . in a complex world . Limits reactions to shocks . Less symmetric . Fewer -ve feedback loops . Less stable . Trade wars . Currency wars . UN, WTO, IMF, WorldBank, . Regional blocks 5/4/2020 4 World Order Rule/institution based Outcome based . Predictability . Flexibility . in a complex world . Limits reactions to shocks . Less symmetric . Fewer -ve feedback loops . Less stable . Trade wars . Currency wars . Rule based maybe in large countries best interests: . Control internal politics (national champions, etc.) . can shape the rules . Rule shaping may lead to “blocks” 5/4/2020 5 Economic order . Challenge: what are the rules . necessary to ensure the functioning of the system . that reflect (diverging) national preferences & identity . Areas . Intellectual property, patents . Competition . Health, phytosanitary . GMOs, chlorinated chicken . Environmental / social standards . Privacy . Enforcement (?) 5/4/2020 6 Geopolitics & Economics . Summers (2004) “balance of financial terror” . Create Interdependence/loss of autonomy (via e.g. global value chains) . Forces interaction convergence to common values . Flows of ideas/people makes wars more costly . Common threats . … BUT . Less diversity . Less regional experimentation . Loss of identity (Grossman-Helpman, 2019) . Resilience . Depends on whether symmetric global shock or regional shock 5/4/2020 7 Geopolitics & Globalization .
    [Show full text]
  • Currency Wars: “Beggar Thy Neighbour” Policy
    Currency Wars: “Beggar Thy Neighbour” Policy What is a Currency War? A currency war is a situation wherein devaluation of currency by one country is retaliated by a competitive devaluation from the other country. For instance, if the United States were to devalue the dollar against the Pound Sterling and if the British retaliated with their own devaluation then the situation could be accurately described as a currency war. Devaluation is believed to cause growth in the short run. However, this growth comes at the expense of one’s trading partners. Hence currency wars are also known as “beggar thy neighbour” policy! What Happens When a Currency is Devalued? The devaluation of a currency has multiple effects. Usually they are considered good for the economy in the short run since they increase chances of growth. However, the growth happens at the expense of other economies. Some benefits that arise due to devaluation are as follows: . A cheaper currency makes exports cheaper. Hence, when countries devalue their currency, they end up pricing their products attractively in the international market and as a result end up giving a major impetus to exports even if other factors such as productivity remain constant. A devalued currency also helps to stem imports since the goods produced by other countries tend to become more expensive as compared to domestic goods. Thus, the exports of other nations are negatively affected by currency devaluation. Since higher exports means higher production and therefore implies higher employment, currency devaluation seems like an effective mechanism to control unemployment in the nation.
    [Show full text]