Trade and poverty nexus: A case study of Sri Lanka

The link between trade liberalisation and poverty has become one of the most debated topics in recent years. There is a growing body of empirical literature on this topic and many studies provide mixed results. In this study, Sri Lanka is used as a detailed case study and a computable general equilibrium (CGE) approach is used as an analytical framework to examine the trade-poverty nexus. The results suggest that, liberalisation of the manufacturing industries is more pro-poor than that of the agricultural industries. Overall, this study suggests that trade reforms may widen the income gap between the rich and the poor creating uneven gains across different household groups in Sri Lanka. While short-term complementary policies are needed to compensate vulnerable income groups, long-term policies are needed to make gains from trade liberalisation more inclusive and equitable to maintain economic and political stability in Sri Lanka.     

Trade liberalisation and urban–rural linkages: a CGE analysis for Ethiopia

Using a rural–urban computable general equilibrium (CGE) model, this paper examines the impacts of trade liberalisation on structural transformation and overall growth of the Ethiopian economy. The simulation experiments suggest that the impacts of trade liberalisation depend on wage-setting conditions in the urban region. With a fixed urban real wage, trade reform adversely affects overall economic growth mainly because of large contractions in the urban region. If urban nominal wage is flexible, both rural and urban regions experience expansion in GDP. An important policy implication of this analysis is that the success of trade liberalisation critically depends on the extent to which product and labour market reforms are synchronised. On the other hand, simultaneous implementations of nominal devaluation and reductions in external trade tariffs would not enhance structural transformation of the economy. However, this policy conflict does not necessarily arise if the introduction and implementation of different policy instruments of trade reforms are appropriately sequenced.     

The impact of trade liberalisation on poverty and inequality: Evidence from CGE models

In this paper we carry out a systematic review of the evidence from CGE models regarding the effect of trade liberalisation on income inequality and poverty in developing countries. The evidence suggests quite strongly that trade liberalisation tends to reduce poverty, but is more likely to increase inequality than reduce it; however, the predicted effects are relatively small. Variation in the size and direction of effects can be explained by the choice of outcome measure, the fiscal response to liberalisation, the type of CGE model, and certain country characteristics – but not the method used to link the CGE model to the distribution of income.     

China's Pro-Poor Growth: Measurement and Implications

ABSTRACT. Pro-poor growth has been the preeminent strategic framework of the international development community because it describes relationships between growth, inequality, and poverty. Assessing whether economic growth and income distributional changes are “pro-poor” has important policy implications and has become increasingly widespread in academic and policy societies. The article aims to measure the pro-poor growth in rural China from 1989 to 2009 through analyzing the household survey data collected by the China Health and Nutrition Survey. Among the main findings, from 1989 to 2006, China's economic growth in rural areas was relatively weakly pro-poor and poverty reduction mainly relied on the “trickle-down effect” of economic growth. However, since 2006, both the “trickle-down effect” of growth and changes in income distribution have reduced poverty. During this period, Chinese economic growth was pro-poor. Research on pro-poor growth based on more comprehensive data is urgently needed to advise policymakers to make relevant policies.     

Are tariffs bad for growth? Yes,say five decades of data from 150 countries

The empirical evidence on the growth effects of import tariffs is sparse in the literature, notwithstanding strong views held by the public and politicians. Using an annual panel of macroeconomic data for 151 countries over 1963–2014, we find that tariff increases are associated with an economically and statistically sizeable and persistent decline in output growth. Thus, fears that the ongoing trade war may be costly for the world economy in terms of foregone output growth are justified.     

Trade liberalization and industry performance in Bangladesh

This paper analyzes trade liberalization's impact on Bangladesh's manufacturing sector performance. Using firm level input and output data and employing a nonparametric data envelopment analysis (DEA), we calculate technical, pure technical and allocative efficiencies for a sample of 82 firms collected over two periods of time: 1993 and 1998. Then, applying a Malmquist index method, we calculate indices of total factor productivity change and decompose them into technological change, technical efficiency change and scale efficiency change. Our results show that the majority of Bangladeshi manufacturing firms experienced a positive total factor productivity growth between 1993 and 1998, averaging 29% over a five-year period. Export-oriented firms have performed better than import-oriented firms in improving their technical efficiency relative to the best-practice firms in their own sub-group. When these results are compared with the official statistics on the output performance of manufacturing firms, we can conclude that trade liberalization in the 1990s did not adversely affect the Bangladeshi manufacturing industry.     

Applied general equilibrium analysis of trade liberalisation on land-based sectors in Malaysia and Indonesia

This paper presents general equilibrium evaluations of forest sector trade for Southeast Asian exporters. The four scenarios examined range from the 1994 Uruguay Round tariff reductions to a complete liberalisation of forest and agricultural products trade. We find that simultaneous reductions in forest and agricultural sector tariffs make Indonesia and Malaysia worse off. For Indonesia, this is due to the fall in forest rent and agricultural tariff revenues. Malaysia has the highest ratio of agricultural imports to total land-based sector imports, the rise in agricultural prices thus hits Malaysian consumers the hardest.We find that terms of trade effect omitted from the partial equilibrium framework may reduce the welfare calculations for Malaysia and Indonesia in the forest sector trade by as much as 106 and 58%, respectively. This points to the importance of general equilibrium modelling in the logging industry. The same applies to other sector specific analyses where trade is concentrated between few countries.     

Halving poverty in HIPC countries by 2015: How costly if achievable?

This article assesses the likelihood and costs of halving the poverty headcount ratio by 2015 from its 1990 levels in sixteen post-HIPC-MDRI countries. An optimistic pro-poor growth scenario indicates that, on average, they will attain this goal 2 years before the end date. An estimated annual cost of 16 percent of the recipients’ GDPs suggests that currently available funds will be sufficient to finance the MDG poverty target, provided that they achieve a 6 percent annual economic growth, improve their equality of incomes and implement policies to raise absorptive capacity to levels obtained by East Asian countries in the mid-1990s.     

黑龙江省与韩国贸易合作新思路与新战略

文章运用实证分析和比较分析的方法,对1992年以来黑龙江省与韩国的贸易合作进行了客观性的研究。评价了黑龙江省与韩国贸易合作的基本特点,分析了双方贸易规模小、速度慢的根本原因,在与其他省份的比较中,以国际贸易理论为依据,提出了推进黑龙江省与韩国贸易合作优化升级的新战略。     

Wearing corset,losing shape: The euro's effect on trade imbalances

When does trade become a one-way relationship? We study bilateral trade balances for a sample of 18 European countries over the period from 1948 through 2008. We find that, with the introduction of the euro, trade imbalances among euro area members widened considerably, even after allowing for permanent asymmetries in trade competitiveness within pairs of countries or in the overall trade competitiveness of individual countries. This is consistent with indications that pair-wise trade tends to be more balanced when nominal exchange rates are flexible. Intra-euro area imbalances also seem to have become more persistent with the introduction of the euro, some of which is linked to labor market inflexibility. Reviewing the direction of imbalances, we find that bilateral trade surpluses are decreasing in the real exchange rate, decreasing in growth differentials, and increasing in the relative volatility of national business cycles. Finally, countries with relatively higher fiscal deficits and less flexible labor and product markets exhibit systematically lower trade surpluses than others.     

Agricultural policies and migration in a U.S.-Mexico free trade area: A computable general equilibrium analysis

A United States-Mexico agreement to form a free trade area (FTA) is analyzed using an 11-sector, three-country, computable general equilibrium model that explicity models farm programs and labor migration. The model incorporates both rural-urban migration within Mexico and international migration between Mexico and the United States. In the model, sectoral import demands are specified with a flexible functional form, an empirical improvement over earlier specifications, which use a constant elasticity of substitution function. Using the model, we identify trade-offs among bilateral trade growth, labor migration, and agricultural program expenditures under alternative FTA scenarios. Trade liberalization in agriculture greatly increases rural- urban migration within Mexico and migration from Mexico to the United States. Migration is reduced if Mexico grows relative to the United States and also if Mexico retains farm support programs. However, the more support that is provided to the Mexican agricultural sector, the smaller is bilateral trade growth. The results indicate a policy trade-off between rapidly achieving gains from trade liberalization and providing a transition period long enough to assimilate displaced labor in Mexico without undue strain.     

美印经贸关系的现状、特点及前景

近年来，美印经贸关系取得了长足进展，突出表现是贸易和投资领域发展快速、高科技和能源领域合作成为亮点、经济互补性强以及合作走向机制化。美印经贸关系的进一步发展面临印度经济环境欠佳、双边贸易摩擦不断以及知识产权纠纷等很多问题，但在相互战略需求和经济利益驱动等因素的作用下，美印经贸关系将会持续稳定发展。     

Currency devaluation and trade balance: Evidence from the US services trade

This study aims to revisit the effectiveness of using currency devaluation as a policy tool to improve trade balance by estimating the exchange rate elasticities of services trade between the US and rest of the world with quarterly disaggregated services trade data from 1999 to 2015. Empirical results reveal that the impacts of currency devaluation on individual services trade are mixed and largely depend on the nature of services. Using currency devaluation to raise export services trade and reduce import services trade seems to be more effective in the long-run but not in the short-run. It is interesting to note that some individual services trades are insensitive to exchange rate changes. The estimates also reveal that most categories of services trade are income elastic and economic growth plays a key role in determining the imports and exports of services trade.     

Market potential, European Union and growth

The successive enlargements of the European Union have implied an important increase of the market where European firms can supply their products. In this paper we analyze the influence of this process on the economic growth of EU members by including the market potential as a scale indicator in a Solow-type model. The main results are: first, the integration in the EU, specially for new members, explain a substantial fraction of subsequent growth (between 15% and 40%); second, this effect diminishes over time; third, the GDP of new members appears to have a greater positive influence than its population; and fourth, peripheral countries and those less open to trade are in a worse position to appropriate such benefits.     

Assessing non-tariff barriers in Syria

International trade in Syria is highly regulated through a combination of tariffs and non-tariff barriers. At 8% of the value of imports on average, effective tariffs are relatively low. However, non-tariff barriers to trade actually make Syria's trade restrictiveness very high. Comparing world and domestic prices of imports indeed suggests that non-tariff barriers increase the domestic price of imported goods by 17% on average, notably the result of significant quantitative restrictions. Using a computable general equilibrium model, the costs of NTBs on the Syrian economy are assessed. Simulations suggest that reallocation gains resulting from a complete removal of NTBs could be substantial. Accordingly, the key message from the analysis is that trade reform if it focuses only on tariff reduction will have limited growth benefits. On the contrary, if the Government abolishes the widespread non-tariff barriers to trade, including the elimination of quantitative trade restrictions, trade policy can become the central instrument to redress Syria's growth prospects.     

地方经济结构与制造业增长：来自对比苏浙两省的经验证据

利用苏浙两省1999年-2007年27个制造行业的面板数据,对比分析地方经济结构（专业化与多样化经济、本地竞争与垄断、FDI与出口）的外部性对制造业发展的影响。结果表明：多样化经济对苏浙两省产业发展有促进作用,专业化经济对浙江省产业发展有促进作用而对江苏省产业发展的影响不明显;本地竞争有利于产业发展,本地企业规模（垄断）对江苏省产业发展有促进作用,对浙江省有阻碍作用;FDI对两省产业发展的作用不明显,而出口有利于产业发展;产业集中对江苏省产业发展有促进作用而对浙江省有阻碍作用;传统的要素投入中,资本对产业发展具有一定的促进作用,而劳动力投入的作用不明显。     

Trade, education, and innovation: Prospects for the U.S. economy

This paper examines international trade issues as vital indicators of the economic prospects of the United States and other developed economies. In particular, it challenges misuses of the doctrine of mutual gains from trade and instead argues that comparative advantage does not guarantee increases in benefits to both trading partners—especially when one partner seeks to distort the market mechanism in its favor. In the face of such mercantilist or protectionist practices, efforts to advance innovation, without retaining manufacturing jobs, will not ensure continued prosperity, as the number of jobs entailed in the invention process is small compared with the number of jobs associated with manufacturing an innovative product for mass consumption. These matters call for the urgent rethinking of trade policy by the United States and other developed nations, if they are to balance their imports and exports and ensure continued economic growth.     

Prospects for trade in manufactured goods between industrial and developing countries, 1978–1990

This paper examines prospective changes in trade in manufactured goods between the industrial and the developing countries. Assuming the continuation of the policies followed by the industrial countries, it is projected that the manufactured imports of these countries from the developing countries would rise at an average annual rate of 12.5% between 1978 and 1980 while their manufactured exports would increase 9 7% a year. Nonetheless, the export surplus of the industrial countries in trade in manufactured goods would rise, contributing to the growth of industrial output. The expansion of their exports of manufactured goods would also contribute to economic growth in the developing countries, and both groups of countries would benefit from specialization according to comparative advantage.     

The impact of de-globalization on China’s economic transformation: Evidence from manufacturing export

The economic transformation is an important policy practice of economic development in China. In the context of “deglobalization”, it is critically important to better understand the impacts of increasing trade costs on China’s economic transformation from the perspective of firms’ exports. In this study, we measure the trade costs of specific manufacturing sectors and provinces. We employ Heckman (1979) two-stage method and the data from China’s manufacturing firms to investigate the impacts of trade costs on heterogeneous firms’ exports. Based on these results, we further explore the impacts of trade costs on China’s economic transformation and discuss policy advisories. Our results indicate that the increase in trade costs have adverse impacts on China’s economic transformation. Specifically, increasing trade costs hinder firms’ export behaviors and export scales. However, these impacts are heterogeneous on different types of firms, which refers to the ownership reforms, manufacturing sector upgrades and coordinated regional development. In particular, increasing trade costs do not affect coordinated regional development in China, but they are not conducive to ownership reforms and manufacturing sector upgrades. Altogether, our findings provide the first evidence on the impacts of trade costs on China’s economic transformation from the perspective of firms’ exports, and also shed light on policy implications for promoting firms’ exports and economic transformation in the “deglobalization” period.     

Common paths,divergent patterns: The social protection by other means approach in Australia and Japan

This article reports on a study of the welfare reform trajectories of two countries that are often identified in the literature as having institutional patterns of the ‘social protection by the other means’ approach. It is questioned in the article whether these two countries have undergone a converging reform trajectory against the increasing forces of economic liberalisation and whether their distinct ways of doing social policy have now come to an end. It argues that while both Australia and Japan have followed a similar neoliberal path in their social policy reform direction, the forms and patterns they have taken to follow have been distinct, largely aligned with the existing structure of social protection in each. Distinctive strategies of welfare adopted by each country have led to a divergent pattern in their way of doing social policy.