International Economics最新文献

This paper provides a sound ex-post evaluation of the impact of the Eurasian integration on member countries’ bilateral trade after a decade of implementation. We overcome the main limitations of current empirical analyses on the effects of trade agreements, namely the aggregation of tariff and non-tariff barriers and the likely self-selection bias, by applying a non-parametric method specifically designed to fully exploit time-series cross-sectional data. We thus compare the trade flows of the member countries in the Eurasian agreement with the exporter-importer pairs located in the Eurasian continent, which are most similar in terms of pre-treatment trends and features. Our results confirm the previous literature about the lack of a significant impact of the Eurasian customs union but find more positive net effects of the more recent integration steps. Our results ask for additional efforts to complete the Eurasian integration and let its member countries fully benefit from its hoped-for long-term effects.

The economic agents’ perception of the monetary policy might not coincide with the central bank conduct. We investigate this issue by using both actual and expected data identified by professional forecasters for Brazil, an emerging economy that has long adopted the inflation-targeting regime. We estimate observed, expected, and forward-looking interest rate rules, apply Full-Information Rational Expectations (FIRE) tests, assess restrictions implied by models of information rigidity, and perform several robustness checks. The estimated policy rules respond to inflation deviations and output gap according to theoretical grounds. Professional forecasters, however, do not believe in aggressiveness to fight inflation in longer forecasting horizons, while FIRE tests unveil information rigidity in the short run. There is a misalignment between the Central Bank practice and the private agents’ perception of the monetary policy in the long but not in the short run, suggesting unanchored long-term inflation expectations.

Preferential trade agreements (PTAs) have emerged as the dominant form of international trade governance. Provisions included in PTAs are increasingly numerous, broad in their purview, deep in their scope, and varied between agreements. We study the economic, political, and geographic determinants of PTA design differences. For each of the hundreds of classified PTA provisions, we consider 287 country-pair characteristics as potential determinants, covering many individual mechanisms the literature has studied. We employ random forests, a supervised machine learning technique, to handle this high dimensionality and complexity. We use a robust variable importance measure to identify the most critical determinants of the inclusion of each PTA provision. Contagion due to competition for export markets, geographic proximity, and governance quality emerge as essential determinants of PTA design. These results motivate future exploration of individual mechanisms our exercise points to.

This study investigates the frequency connectedness among foreign exchange markets of G10 countries, focusing on tail risk and its implications for portfolio management. To do so, we use a novel framework that combines the Conditional Autoregressive Value-at-Risk (CAViaR) model with the novel time-varying frequency and quantile connectedness method developed by Chatziantoniou et al. (2022) based on Baruník and Křehlík (2018) and Ando et al. (2018) approach. A key value of this paper to the literature is the provision of fresh empirical evidence on the extreme downside linkages among the markets examined. From the average connectedness measures, the top shock transmitters within the network were EUR, NOK, AUD, SEK, and NZD, while the main shock receivers emerged to be JPY and CHF, followed by CAD and GBP. We note that events in the major funding markets (the Eurozone, Japan) have a higher impact on the participants in these same markets than in relatively small markets (New Zealand, Norway). From the dynamic connectedness results, the magnitude of connectedness for the entire sample period increased during the COVID-19 era, compared to the magnitude before the COVID-19 outbreak. The cumulative spillover also reveals that USDNOK is the vastest net transmitter of spillovers to other markets, including SEK, CHF, and AUD. However, the EUR is the largest net beneficiary followed by JPY and CAD. Findings from the time-varying extreme downside analysis suggest that throughout the period, SEK and NOK are the other currencies' strongest and most frequent net spillover shock emitters for the short-, medium-, and long-term dynamics. Currency portfolio implications are discussed.

The literature on the effect of trade openness on public governance shows contrasting results. Using a renewed empirical strategy, we contribute to the understanding of this indeterminacy by studying the influence of trade openness on public governance in Sub-Saharan Africa. We also examine how this effect varies with structural characteristics that may be subject to reforms. In this respect, we use an original measure of trade openness. We consider public governance and its three dimensions, namely economic governance, political governance, and institutional governance. Overall, we find that trade openness improves public governance, political governance, and economic governance. On the other hand, it worsens institutional governance. Moreover, these effects of trade openness on the dimensions of public governance depend on the defined levels of technology transfer, foreign direct investment, and natural resources. Our results are robust to different openness and governance indicators, alternative specifications, study periods, endogeneity, and cross-sectional dependence. Above all, they highlight the interest of dissociating public governance to understand the contrast observed in the empirical literature.

The recent Covid-19 pandemic has disrupted global supply chains and led to large increases in shipping costs. This paper provides shipping cost mean and uncertainty measures using the endogenous regime switching model with dynamic feedback and interactions developed by Chang et al. (2023). The uncertainty indicator measures overall risk in the shipping market and is shown to represent a useful addition to the existing set of economic and financial uncertainty indices. Both the shipping cost mean and uncertainty measures are then included in structural VAR models for the US, the UK, and the euro area to examine the pass-through to headline CPI, core CPI, PPI, and import price inflation vis-à-vis other global and domestic shocks. The results suggest that shipping cost uncertainty shocks have sizeable effects on all inflation measures and are characterized by a stronger pass-through than that of other domestic or global shocks. Unlike the latter, they also significantly affect core CPI inflation. These findings imply that shipping cost mean and uncertainty should also be considered by policymakers when assessing the global drivers of inflation.

Fiscal and regulatory arbitrage opportunities in Offshore Financial Centers (OFCs) materially distort the economic analysis based on cross-border capital flows. However, despite its significance, there is limited information on the true scale of this phenomenon. This paper focuses on Foreign Direct Investments (FDIs) and fills this gap by using an extensive list of FDIs determinants and estimating a gravity-like binary choice specification to assess how much bilateral FDIs are driven by economic integration motives versus profit shifting opportunities. We find that the share of so-called phantom FDIs, after rising in 2010–15, stabilized at around 40% of total FDIs in recent years and that this share is systematically larger in OFCs, reconciling available evidence on the abnormal amount of recorded FDIs in these countries.

The importance of industrialization as an engine of economic growth and structural transformation has been largely documented. Despite the benefits of industrialization, Africa has witnessed a de-industrialization in recent decades. This means that some important determinants of industrialization remain unidentified in Africa. This study fills this gap by analysing the effect of foreign aid on industrialization in 42 African countries over the period 1995–2021. Using the two-step system Generalized Method of Moments, the following results are established. First, on average, foreign aid hurts industrialization in Africa. Second, the effect of foreign aid depends on the nature of the aid since education and energy aid improve industrialization while health and humanitarian aid negatively affect it. Third, we find a U-shaped relationship between foreign aid and industrialization. Interestingly, democracy and human capital can mitigate the negative effect of foreign aid on industrialization. These results have strong economic policy implications for African countries, showing that they should put in more effort to strengthen their level of democracy and human capital in order to enjoy the positive effect of foreign aid on industrialization. Finally, this research contributes to the development of aid distribution plans that support African nations' industrialization.

Over the past years, developing countries have increased their borrowing from international private creditors. So far, however, little is known about the effect of public debt owed to international private creditors (private debt) on economic growth in developing countries. This paper analyzes the effects of private debt and its main components (i.e., commercial loans, and bond finance) on economic growth. Using panel data over 1970–2017 and covering 70 low -and middle-income countries, the paper finds a positive and significant effect of private debt on GDP per capita growth rate. Private debt appears to stimulate economic growth mainly by improving the efficiency of investment rather than its volume. However, there are differential effects: bond finance has a positive effect, while the effect of commercial loans on growth is negative. The paper discusses the policy implications of the main findings.

This paper examines how the presence of foreign-owned suppliers (Inward FDI in intermediate good sectors, called input IFDI) affects both the productivity and outward FDI propensity of domestic firms. Using data from Italian manufacturing firms over the period 2005–2012, we find that the degree of a firm's involvement in innovation activities is crucial. More specifically, input IFDI, on average, boosts aggregate productivity in sectors where the majority of firms are involved in innovation activities. These industry productivity gains are due to efficiency improvements within firms, as well as the reallocation of market shares towards more efficient firms. Conversely, in sectors where few firms are involved in innovation activities, input IFDI, on average, leads to productivity losses within firms, entailing larger market share reallocation towards the best performing firms. Our findings further demonstrate that in those sectors with a high degree of innovation activity, input IFDI increases domestic firms' propensity to invest abroad, whereas the opposite is true for the other sectors.