The choice of trade regime: delayed reform under productivity fluctuations and cost of structural change

Despite the advantages of international trade, a number of countries have stuck to restricted trade regimes, allowing the productivity gap between themselves and the “trading” world to become huge before turning to a more outward oriented trade policy. As a supplement to the existing explanations for the hesitation to change trade regime, we present a model where the international productivity development shared by open economies, is uncertain. Due to uncertainty, it might be optimal to wait and maybe exercise the option to change trade regime later, i.e. to delay a trade reform.     

Strategic interoperability standards and trade taxes

In a two-country international trade framework, the paper considers the interplay between the governments' incentives for conducting traditional trade policies and their incentives for the policies toward compatibility between the products of the firms competing in the international market. The model assumes that one domestic and one foreign firm supply partially incompatible products for the home country market while consumers value both variety and a network externality. Motivated by the benefits of the network externality, the home government sets a standard requiring the foreign firm to guarantee a minimum level of compatibility between its own product and the product of the domestic rival. The paper analyzes the home country standard setting and import tariff policies as well as the incentives of the foreign country for imposing the export tax and conducting a policy which enhances the degree of compatibility between the rival products in the export market.     

Do liberal trade policies promote trade openness?

Although trade liberalization and trade openness are assumed to be strongly associated with each other and often used interchangeably, the empirical evidence has not been forthcoming. This article is an attempt to fill this gap. By investigating the link between trade openness and trade restrictions, it argues that while a negative link between various types of trade restrictions and trade openness is evident, the relationship is weak, statistically not always significant and there is no clear evidence that the removal of trade restrictions (trade‐liberalization) invariably leads to improved trade openness.     

New trade theory versus old trade policy: a continuing enigma

This paper examines the theoretical and empirical grounds fortrade liberalisation. We note that many of the conventionalarguments relating to the static and dynamic gains from liberalisationare based on fragile theoretical grounds. We also show that,although new trade theory takes account of some of the complexitiesof international trade and although the analytical thrust ofmany models justifies intervention, such policy conclusionsare rejected even by those at the forefront of these theorieson the grounds of political economy arguments which do not standup to careful scrutiny. Finally, we show that arguments favouringtrade liberalisation are not supported by existing empiricalresearch, which generally fails to capture the complex and ambiguouseffects of liberalisation and openness.     

Distortions in the trade policy for development debate: A re-examination of Friedrich List

This paper re-examines the works of Friedrich List and arguesthat he had a vision of how to promote economic and social developmentfrom the initial state of an advanced agricultural society thathas been distorted in the trade policy for development debate.It shows that his vision is much broader than the orthodox labelof ‘protectionism’ conveys. He thus proposed manymethods of promoting development, cautioned and suggested measuresagainst the drawbacks of protection, and emphasised exports.It is hoped that this paper will contribute to the debate onthe wisdom behind the current push toward trade liberalisation.     

Financial Inflows to Poland, 1990–96

Foreign exchange flows in Poland in the 1990s, especially during 1994–96, resulted from two developments. First, there was a current account surplus, as growth revived due to efficiency improvements, while macroeconomic policy limited domestic demand. Second, Poland had rejoined international capital markets and regained favorable credit ratings, triggering investment inflows. We can classify the effects of these inflows into three groups: changes in the institutional framework; changes in the stabilization path; and changes in the real economy. The crawling band introduced in May 1995, rapid development of the money market, and improvement of the central bank's capacity to intervene on that market are in the first group. As to the second, relative currency appreciation and import competition, constraining domestic price increases, contributed to the strong disinflationary push which began in 1995. Under the third heading, foreign direct investment and portfolio inflows helped to maintain rapid growth of investment and output.     

印度利益集团对其贸易政策的影响

本文利用贸易政策形成的需求供给分析框架及利益集团影响贸易政策形成的机制,分析了印度利益集团对印度贸易政策确立与演变的影响。虽然印度各种利益集团的相互博弈在一定程度上影响了印度贸易政策的形成与发展,但利益集团发挥的作用是有限的,印度政党对利益集团的利用是充分的。印度历届政府经常利用利益集团之间的斗争,推进贸易自由化进程。     

Market collusion and the politics of protection

This paper investigates the relationship between trade and competition policy within a model where market collusion and protectionist lobbying are themselves related. Collusion and lobbying are modeled as joint products of the same collective effort of firms. In equilibrium, firms cannot achieve greater cooperation in one dimension without reducing it in the other. A trade agreement that limits the effectiveness of lobbying may cause firms to increase market collusion, thereby increasing the domestic price. Thus, international trade agreements may run counter to the goals of competition policy. On the other side, a more restrictive competition policy is shown to either reduce the domestic price or reduce import protection. Thus, competition policy tends to promote trade policy goals. The reason is that restrictive competition policy undermines collusion at the source—it decreases the per-firm benefit to collusion relative to the gains from deviating—reducing firm cooperation in both dimensions.     

Environmental improvement with trade liberalization

Past studies predict that trade liberalization agreements (and NAFTA in particular) harm the environment. These studies have focused on adjustments in production and have assumed that environmental policy is exogenously given. We show why trade liberalization and improved environmental quality are mutually compatible — when environmental policy is recognized as politically endogenous. We also present empirical evidence to support the basic assumptions underlying the consistency of more liberal trade policy and an improved environment.     

Why will Trump lose the trade war?

ABSTRACT

The escalating U.S.–China trade conflicts have increasingly shadowed the outlook of the world economy. The Trump administration aims to achieve its strategic goals including reducing current account deficits, promoting the U.S. manufacturing sector, and curbing Chinese high-tech industries by waging the trade war against China. This paper argues that the current account deficits and the declining manufacturing sector in the U.S. are mainly driven by its internal structural factors, such as low saving rates, high labor costs, and rising service sector, rather than by the import competition from China. Moreover, the trade war further deteriorates the U.S. current account deficits and erode its comparative advantage, and it forces China to invest more in technological innovation and human capital, and thus promote its progress in high-tech industries. Thus, the U.S. will not be able to achieve its strategical goals and eventually lose the trade war.     

论全面深化改革背景下上海自贸区的创新发展

上海自贸区是继经济特区之后中国特色社会主义市场经济的又一探索,承载着全面社会改革的重任,分析其发展战略意义、改革创新点、发展机遇和发展原则,对确保自贸区良性发展及进一步丰富社会主义市场经济理论有重要意义。     

The Social Value Theory of Orthodoxy: A Review and Critique

From an institutionalist perspective, we identify five sources of policy conflict. Each may explain why policies intended to obtain particular goals for an institutionalized practice may have unintended consequences. We illustrate by analyzing attempts at introducing market-oriented reform in health care provision.     

The myth of large farm superiority: Lessons from agricultural transition in poland

In Poland, larger farms are often actively promoted over small farms. This policy is based on the perception that there are economies of scale that favor large farms; however, this is contrary to international evidence, which generally indicates that larger farms are less efficient and use less labor than smallscale family farms.

Using both total factor productivity measures and data envelopment analysis, empirical findings from Poland suggest that larger farms are no more efficient than smaller farms, and smaller farms are relatively more labor-intensive. These results have important policy implications for farm restructuring in Poland and other transition economies.