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Creator: Auerbach, Kay J. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 037 Descrizione:
Note from cover: "Developed from remarks at the Chamber of Commerce sponsored seminar for the International Tariff Commission hearings on February 20, 1975 Minneapolis, Minnesota."
Parola chiave: Trade Act of 1974, International trade negotiations, and United States Soggetto: F13 - Trade Policy; International Trade Organizations
Creator: Kehoe, Timothy Jerome, 1953-, Rossbach, Jack, and Ruhl, Kim J. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 492 Abstract:
This paper develops a methodology for predicting the impact of trade liberalization on exports by industry (3-digit ISIC) based on the pre-liberalization distribution of exports by product (5-digit SITC). Using the results of Kehoe and Ruhl (2013) that much of the growth in trade after trade liberalization is in products that are traded very little or not at all, we predict that industries with a higher share of exports generated by least traded products will experience more growth. Using our methodology, we develop predictions for industry-level changes in trade for the United States and Korea following the U.S.-Korea Free Trade Agreement (KORUS). As a test for our methodology, we show that it performs significantly better than the applied general equilibrium models originally used for the policy evaluation of the North American Free Trade Agreement (NAFTA).
Parola chiave: Trade liberalization, Product , and Industry Soggetto: F17 - Trade: Forecasting and Simulation, F13 - Trade Policy; International Trade Organizations, and F14 - Empirical Studies of Trade
Creator: Kehoe, Timothy Jerome, 1953-, Pujolas, Pau S., and Rossbach, Jack Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 537 Abstract:
Applied general equilibrium (AGE) models, which feature multiple countries, multiple industries, and input-output linkages across industries, have been the dominant tool for evaluating the impact of trade reforms since the 1980s. We review how these models are used to perform policy analysis and document their shortcomings in predicting the industry-level effects of past trade reforms. We argue that, to improve their performance, AGE models need to incorporate product-level data on bilateral trade relations by industry and better model how trade reforms lower bilateral trade costs. We use the least traded products methodology of Kehoe et al. (2015) to provide guidance on how improvements can be made. We provide further suggestions on how AGE models can incorporate recent advances in quantitative trade theory to improve their predictive ability and better quantify the gains from trade liberalization.
Parola chiave: Applied general equilibrium, Input-output linkages, Trade costs, Armington elasticities, and Trade liberalization Soggetto: F11 - Neoclassical Models of Trade, F14 - Empirical Studies of Trade, F17 - Trade: Forecasting and Simulation, and F13 - Trade Policy; International Trade Organizations
Creator: Asturias, Jose, Hur, Sewon, Kehoe, Timothy Jerome, 1953-, and Ruhl, Kim J. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 521 Abstract:
In what order should a developing country adopt policy reforms? Do some policies complement each other? Do others substitute for each other? To address these questions, we develop a two-country dynamic general equilibrium model with entry and exit of firms that are monopolistic competitors. Distortions in the model include barriers to entry of firms, barriers to international trade, and barriers to contract enforcement. We find that a reform that reduces one of these distortions has different effects depending on the other distortions present. In particular, reforms to trade barriers and barriers to the entry of new firms are substitutable, as are reforms to contract enforcement and trade barriers. In contrast, reforms to contract enforcement and the barriers to entry are complementary. Finally, the optimal sequencing of reforms requires reforming trade barriers before contract enforcement.
Parola chiave: Sequencing reforms, Entry barriers, Contract enforcement, and Trade barriers Soggetto: F13 - Trade Policy; International Trade Organizations, O24 - Development Planning and Policy: Trade Policy; Factor Movement; Foreign Exchange Policy, O19 - International Linkages to Development; Role of International Organizations, F40 - Macroeconomic Aspects of International Trade and Finance: General, and O11 - Macroeconomic Analyses of Economic Development
Creator: Kehoe, Timothy Jerome, 1953- and Ruhl, Kim J. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 324 Abstract:
We propose a methodology for studying changes in bilateral commodity trade due to goods not exported previously or exported only in small quantities. Using a panel of 1,900 country pairs, we find that increased trade of these “least-traded goods” is an important factor in trade growth. This extensive margin accounts for 10 percent of the growth in trade for NAFTA country pairs, for example, and 26 percent in trade between the United States and Chile, China, and Korea. Looking at country pairs with no major trade policy change or structural change, however, we find little change in the extensive margin.
Parola chiave: Extensive margin, International trade, Trade liberalization, NAFTA , and Structural change Soggetto: O14 - Industrialization; Manufacturing and Service Industries; Choice of Technology, F10 - Trade: General, F13 - Trade Policy; International Trade Organizations, and F44 - International Business Cycles
Creator: Bergoeing, Raphael and Kehoe, Timothy Jerome, 1953- Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 284 Abstract:
This paper quantitatively tests the “new trade theory” based on product differentiation, increasing returns, and imperfect competition. We employ a standard model, which allows both changes in the distribution of income among industrialized countries, emphasized by Helpman and Krugman (1985), and nonhomothetic preferences, emphasized by Markusen (1986), to effect trade directions and volumes. In addition, we generalize the model to allow changes in relative prices to have large effects. We test the model by calibrating it to 1990 data and then “backcasting” to 1961 to see what changes in crucial variables between 1961 and 1990 are predicted by the theory. The results show that, although the model is capable of explaining much of the increased concentration of trade among industrialized countries, it is not capable of explaining the enormous increase in the ratio of trade to income. Our analysis suggests that it is policy changes, rather than the elements emphasized in the new trade theory, that have been the most significant determinants of the increase in trade volume.
Parola chiave: Trade Growth, Intraindustry Trade, Scale Economics, Nonhomothetic Preferences, Imperfect Competition, and Product Differentiation Soggetto: F12 - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation, F17 - Trade: Forecasting and Simulation, and F13 - Trade Policy; International Trade Organizations