Heterogeneous Productivity and the Gains from Trade and FDI

Nontraded goods account for a major share of GDP in most economies, but have not been incorporated in the welfare analysis of monopolistic-competition models with heterogeneous productivity. This paper extends Helpman, Melitz and Yeaple (American Economic Review 94(1):300–316, 2004) to explore welfare effects in the presence of a nontraded good. We derive new analytical results about how the gains from trade and FDI are determined and affected by key parameters in the case of symmetric countries. The model is calibrated to a country group that includes all major developed countries. The gains from openness (trade and FDI) are found to be substantial (between 3.24 and 6.27 per cent of income) even if nontraded goods represent a major part of the economy. Most of these gains are attributed to trade rather than FDI.     

Financial Liberalization in a Small Open Economy

We address three related questions concerning financial liberalization in a small open economy. Does financial liberalization and the resulting capital inflow improve production efficiency in the domestic economy? Who benefits from financial liberalization in the long run and in the short run? Should financial liberalization be implemented gradually or hastily? Our main results are as follows. First, whether financial deregulation in one sector can improve production efficiency may depend on financial regulation in other sectors. Second, financial liberalization may have opposite welfare implications to domestic agents with different productivity in the long run. Third, although some domestic agents lose in the long run, they actually benefit from financial liberalization during the transitional process of deregulation. Finally, a gradual implementation helps achieve a smooth transition.     

应对国际贸易摩擦与开放经济条件下的财政建设

在我国开放经济程度全面提高的今天,我们必须在开放经济条件下探讨存在于应对贸易摩擦与建设财政体系之间的联系,一方面,通过开放经济条件下财政政策的运用,要能更有效地应对国际贸易摩擦;另一方面,通过对涉外经贸与财政发展的研究,逐步形成开放经济条件下财政建设的新理念,构建开放经济条件下的财政新体系。本文从应对国际贸易摩擦这一角度探讨了开放经济条件下财政政策的运用问题。从分析中得到这样的政策启示,即要努力构建“四位一体”的开放经济条件下的财政新体系。     

论当代国际贸易理论的国际政治经济学意义

从1979年新贸易理论诞生以来,国际贸易理论历经了新经济地理、贸易与新增长理论、内生贸易政策理论(也称为贸易政策的政治经济学)、新新贸易理论等数次理论创新过程,对经济全球化的性质和发展趋势产生了许多新的认识。这些理论对国际政治经济学的研究也提供了新的理论视角。在讨论了当代国际贸易理论历次创新的国际政治经济学意义之后,作者提出应该从多重角度辩证地理解这些理论创新。国际政治经济学研究的开放经济政治分析范式把对个体和利益集团的利益分析奠定在经济学理论分析(特别是国际贸易理论分析)的基础上,并强调国内和国际政治经济多层次的互动研究,这有利于对国际政治经济学研究提供明确的演绎逻辑。与此同时,问题导向的国际政治经济学仍应保持其在方法论上的灵活性和开放性。     

Monetary Policy Analysis in a Small Open Credit-Based Economy

This paper describes a simple framework for monetary policy analysis in a small open economy where bank credit is the only source of external finance. At the heart of the model is the link between banks’ lending rates (which incorporate a premium over and above the marginal cost of borrowing) and firms’ net worth. In contrast to models in the Stiglitz-Weiss or Kiyotaki-Moore tradition, the supply of bank loans is perfectly elastic at the prevailing rate. The central bank sets the refinance rate and provides unlimited access to liquidity at that rate. The model is used to study the effects of changes in official interest rates, under both fixed and flexible exchange rates. Various extensions are also discussed, including income effects, the cost channel, the role of land as collateral, and dollarization.

Expectations and Macro-Housing Interactions in a Small Open Economy: Evidence from Korea

Open Economies Review - This paper studies the interaction between the housing sector and the macroeconomic environment in Korea. Besides serving as a typical small open economy, Korea provides an...     

Reexamination of Real Business Cycles in a Small Open Economy

Standard dynamic small open economy models have predicted a counterfactual perfectly positive correlation between output and hours worked over the business cycle. In addition, this class of models exhibits a weak internal propagation mechanism. To address these anomalies, this paper incorporates intertemporally non‐separable labor supply and variable capital utilization into the canonical Mendoza (1991) model with adjustment costs of net investment. Our analysis shows that a dynamic, technology shock–driven small open economy model with internal habit formation in labor hours and endogenous capital utilization is able to account for the main real business cycle regularities of Canada after 1981.     

Welfare Effects of Capital Taxation in a Small Open Economy

In a small open economy, the welfare effect of capital taxation depends on the allocation of the tax revenue as well as the tax system. If tax revenues are used to finance debt or government spending, an increase in either residential or territorial capital taxation will reduce the welfare of the representative individual. If tax revenues are transferred intergenerationally, an increase in the residential capital tax rate will increase the steady-state welfare when the after-tax interest rate is greater than the growth rate. If the revenue is rebated to the tax payer, an introduction of territorial capital taxation may increase welfare when the growth rate is relatively high. In the case where either the revenue from residential capital taxation is rebated to the tax payer or the revenue from territorial capital taxation is transferred intergenerationally, the welfare-maximizing tax rate appears to be zero.     

Monetary Policy in a Small Open Economy with Imperfect Pass-Through

Atlantic Economic Journal - This paper studies the stabilization and welfare properties of various monetary policy regimes in a tractable framework suitable for the analysis of monetary policy in a...     

Endogenous Growth and External Balance in a Small Open Economy

This paper puts forward an intertemporal model of a small open economy which allows for the simultaneous analysis of the determination of endogenous growth and external balance. The model assumes infinitely lived, overlapping generations that maximize lifetime utility, and competitive firms that maximize their net present value in the presence of adjustment costs for investment. Domestic securities are assumed perfect substitutes for foreign securities and the economy is assumed small in the sense of being a price taker in international goods and assets markets. It is shown that the endogenous growth rate is determined solely as a function of the determinants of domestic investment, such as the world real interest rate, the technology of domestic production and adjustment costs for investment and is independent of the preferences of domestic households and budgetary policies. The preferences of consumers and budgetary policies determine the savings rate. The current account and external balance are functions of the difference between the savings and the investment rates. The world real interest rate affects growth negatively but has a positive impact on external balance. The productivity of domestic capital affects growth positively but causes a deterioration in external balance. Population growth, government consumption and government debt affect the current account and external balance negatively, but do not affect the endogenous growth rate.     

厂商生产率异质条件下我国省级国际贸易利益的决定因素分析

在对外开放过程中,我国各地区获取国际贸易利益的差异是解释我国区域经济不平衡的重要原因。本文从新新贸易理论出发,在厂商生产率异质条件下构建了我国省级国际贸易利益决定的分析框架,提出决定我国省级国际贸易利益的主要因素包括地区内部贸易比重、市场进入成本、劳动要素供给和厂商固定运营成本。地区内部贸易比重和市场进入成本越低,劳动要素供给越多,该地区获取国际贸易利益就越多;但是厂商固定运营成本对该地区国际贸易利益的影响有双重性,取决于"生产率效应"和"挤出效应"的比较。本文还运用2001²010年的我国省级面板数据发现,无论是总体样本回归还是分东、中、西部的样本回归,地区内部贸易比重、市场进入成本、劳动要素供给均对国际贸易利益存在符合理论预期的显著影响;同时厂商固定运营成本对我国省级层面上国际贸易利益存在正向影响,这表明生产率效应超过挤出效应。     

New Evidence on the Gains from Trade

We summarize the evidence on the gains from trade in monopolistic competition models, arising from three sources: (i) price reductions due to increasing returns to scale; (ii) increased product variety available to consumers; (iii) self-selection of firms with only the most efficient firms surviving after trade liberalization. There is little direct evidence to support the first source of gains from trade, though some indirect evidence from the European Union. The second and third sources of gains from trade find strong empirical support from studies from various countries, relying on new models and new empirical methods. JEL no. F10, F12, F15     

国民经济动员中的国际贸易策略

随着经济全球化的发展趋势，国际贸易对经济总量的贡献率不断增加，使其成为现代战争资源准备的重要内容。国际贸易对国防领域的渗透，反映了世界经济一体化进程中，由于技术进步，加速了战争资源在国际间流动和配置，因此，国际贸易的展开将有利于增长国防经济潜力，提高国防经济实力和优化国防经济结构，有利于优化国际、国内两种资源的组合。在国民经济动员中，为了确保国家经济竞争优势和把握战争主动权，往往需要根据国家政治、军事、经济的利益，有条件地进行国际贸易，特别是入世后更要在加速贸易往来中强调贸易安全等策略。     

Imperfect Intersectoral Labor Mobility and Monetary Shocks in a Small Open Economy

In this paper, we model the assumption of imperfect labor mobility across sectors in the New Open-Economy Macroeconomics framework to assess its impact on output, inflation, and welfare. Following a permanent home monetary expansion in a small open economy, we find that the above-mentioned assumption leads to: (i) less expansionary effects on (traded) output in the short term, although also less contractionary in the long term; (ii) lower short-term inflation but higher in the long term; and (iii) less intertemporal welfare, with even a ??beggar thyself?? problem being possible.     

The Balassa-Samuelson Hypothesis and Oil Price Shocks in a Small Open Economy: Evidence from Cyprus

Focusing on a small open economy, this paper provides very supportive evidence for the Balassa-Samuelson productivity-bias proposition. Using a battery of tests we show that a positive and significant long run relationship exists between the relative price of nontraded goods and real income per capita. An implication of this result is that the prices of services in Cyprus will rise, if EU membership leads to income convergence with the rest of the EU. We have, furthermore, demonstrated that Rogoff's hypothesis, that real oil price changes negatively affect the price of nontradables, is supported by the empirical results.