Shipping the Good Horses Out

The 1964 effect states that when a fixed per‐unit cost is added to two substitutes, the more expensive (higher quality) one becomes relatively cheaper, and, thus, its consumption will increase. When applied to trade in vertically‐differentiated goods, the importing regions demand relatively more high‐quality goods. We examine how this result changes when the importing region is also endowed with the goods. We use a vertically‐differentiated goods model with heterogeneous consumers in which prices are endogenously determined. We show that the importing regions with an endowment have a stronger Alchian‐Allen effect than the regions that are not endowed. We use the auction data of Australian thoroughbred yearlings to empirically test our model and find consistent empirical patterns.     

Sorting It Out: Technical Barriers to Trade and Industry Productivity

Trade economists traditionally study the effect of lower variable trade costs. While increasingly important politically, technical barriers to trade (TBTs) have received less attention. Viewing TBTs as fixed regulatory costs related to the entry into export markets, we use a model with heterogeneous firms, trade in differentiated goods, and variable external economies of scale to sort out the rich interactions between TBT reform, input diversity, firm-level productivity, and aggregate productivity. We calibrate the model for 14 industries in order to clarify the theoretical ambiguities. Overall, our results tend to suggest beneficial effects of TBT reform but also reveal interesting sectoral variation.     

Can the Japanese agri-food producers survive under freer trade? A general equilibrium analysis with farm heterogeneity and product differentiation

The roles of firm heterogeneity and product differentiation in the manufacturing industries have attracted research attention on the “new new trade theory.” The agricultural sectors also produce new goods using product differentiation through breeding, branding, and other activities. In reaction to globalization, the Japanese Government has sought to revitalize its agri-food sectors by promoting exports of differentiated products. This computable general equilibrium study examines the relevance of this policy, focusing on five agri-food sectors other than grains. We simulate Japan’s three trade deals and a policy intervention that cuts fixed export costs to promote exports. We show that only a few agri-food sectors can increase exports and maintain domestic output under freer trade, and that export promotion would markedly increase entrants into export markets and increase exports of the vegetables and fruit, and processed food product sectors. In these trade deals, tariff and nontariff barriers have different impacts on trade, output, and farm/firm entry.     

Vertical trade and China's export dynamics

This paper examines how China's exports are affected by exchange rate shocks from countries that supply intermediate inputs to China. We build a simple small open economy model with intermediate goods trade to show that due to the intra-regional trade in intermediate goods, a devaluation of other Asian currencies does not necessarily hurt China's exports, as imported intermediate goods could become cheaper. The effect of intermediate goods costs depends critically on the share of intermediate goods used in China's export goods production and the degree of exchange rate pass-through in imported intermediate goods prices. If prices for intermediate goods are not very sticky, the effect through this channel could be large, and China's exports could even benefit. We find that these findings do not depend on China's choice of currency invoicing between the RMB and the US dollar or the choice between fixed and flexible exchange rate regimes.     

Trade costs in the first wave of globalization

What factors drove globalization in the late 19th century? We employ a new micro-founded measure of bilateral trade costs based on a standard model of trade in differentiated goods to address this question. These trade costs gauge the difference between observed bilateral trade and frictionless trade. They comprise tariffs, transportation costs, and all other factors that impede international trade but which are inherently difficult to observe. Trade costs fell on average by 10-16 percent between 1870 and 1913. We also use this measure to decompose the growth of trade over that period and find that roughly 44 percent of the rise in trade within our sample can be explained by reductions in trade costs; the remaining 56 percent is attributable to economic expansion.     

China and India in the international fragmentation of automobile production

We explore the relative positions of China and India in the international fragmentation of automobile production by analyzing disaggregated trade flows, while distinguishing between final and intermediate goods. The size and composition of trade has significantly moved in favor of trade of components over the last decade, but major differences exist between the two countries; China is a net car importer, while India is a net car exporter. We find evidence of the increasing importance of two-way trade in vertically differentiated goods, indicating that China and India are becoming more active participants in the vertical division of labor in automotive production.     

Patterns of Trade and Growth across Cones

This paper examines the implications of the Heckscher-Ohlin (HO) Model for the patterns of production and trade that will emerge as a country grows. It focuses primarily on world equilibria that include two or more cones of diversification. Starting with the textbook model of two factors and two goods, growth paths for production and trade are derived in terms of a country's capital-labor ratio relative to that of the world. With additional goods and countries, multiple cones create a ladder of comparative advantage that a country will climb as it accumulates capital relative to the world. With additional factors as well, more complicated patterns can emerge. In a three-factor model based on Krueger (1977), a country with fixed land, growing labor, and faster growing capital can first work its way down the ladder of comparative advantage before climbing back up. Using a graphical representation due to Leamer (1987) of a more general three-factor model, cones of diversification with large numbers of goods take the form of polygons that a growing country may pass through, then cross between. In all cases, the lesson of the HO Model is that growth causes repeated and extreme changes in patterns of specialization and trade over time.     

Vertical Trade,Exchange Rate Pass-Through,and the Exchange Rate Regime

We compare the welfare of different combinations of monetary and currency policies in an open-economy macroeconomic model that incorporates two important features of many small open economies: a high level of vertical international trade and a high degree of exchange rate pass-through. In this environment, a small economy prefers a fixed exchange rate regime over a flexible regime, while the larger economy prefers a flexible exchange rate regime. There are two main causes underlying our results. First, in the presence of sticky prices, relative prices adjust through changes in the exchange rate. Multiple stages of production and trade make it more difficult for one exchange rate to balance the whole economy by adjusting several relative prices simultaneously throughout the vertical chain of production and trade. More specifically, there is a tradeoff between delivering an efficient relative price between home and foreign final goods and delivering an efficient relative price between home and foreign intermediate goods. Second, because the small economy faces a high degree of exchange rate pass-through under a flexible regime, it suffers from a lack of efficient relative prices in vertical trade. The larger economy, however, does not face this problem because its level of exchange rate pass-through is low.     

The Gravity Equation in International Trade in Services

The main purpose of this paper is to assess the impact of various factors on bilateral services trade, relative to that on bilateral goods trade. To accomplish this purpose, using the standard gravity model, we ran regressions on bilateral services trade and goods trade between 10 OECD member countries and other economies (including OECD member and nonmember countries) for the years 1999 and 2000. One main and interesting result is that services trade is better predicted by gravity equations than goods trade. Another interesting result is that there is a complementary relationship between goods exports and services imports. JEL no. F10, F20, L51, F80     

On the Impact of Transportation Costs on Trade in a Multilateral World

This article proposes to account for the differences in the importance of transport costs, depending on characteristics of trading partners. In a multiregion model of trade in differentiated goods we expect a smaller impact of transport costs on a country's exports as a share of importer gross domestic product (GDP) the more (less) relatively capital-abundant the exporter (importer) is and the lower (higher) production costs are as captured by GDP at given factor endowments and diversity, all else equal. Empirically, this requires four interaction terms in addition to the direct impact of transport costs when estimating log-linear gravity models: one with the exporter GDP per capita or capital-labor ratio, a second one with the importer GDP per capita or capital-labor ratio, and a third and fourth with exporter and importer GDP, respectively. The hypotheses are strongly supported by the evidence from a large panel of bilateral trade between 1970 and 2000.     

两岸机电产品进出口产业内贸易研究

机电产品一直在两岸货物贸易中占有主导地位,深入研究两岸机电产品产业内贸易的现状和特征能对促进两岸贸易提供参考,两岸机电产品贸易中既有产业内贸易形式也有产业间贸易形式,但主要以产业内贸易为主;近几年贸易增长主要是由产业间贸易增长带动;两岸机电产品产业内贸易结构呈垂直型,水平型有待提高。今后两岸侧重提升产业内贸易水平,促进垂直型产业内贸易向水平型转化。     

比较优势、贸易结构与资本积累：对Mazumdar假说适用性的检验及其扩展

Mazumdar（1996）的研究认为：当一国为资本品净进口国和消费品净出口国时,资本品的进口将导致资本品价格的下降进而引致折旧率的下降,结合Solow增长模型,折旧率的下降将促使一国投资率的上升并引致资本积累。本文运用中国数据对这一假说检验后认为：该理论只适用于小国贸易模式,对于诸如中国这样的贸易大国,比较优势决定下的贸易结构完全符合Mazumdar条件,但资本品进口和消费品出口并没有对中国资本积累起到促进作用,根本原因在于这样的贸易结构往往提高了资本品一消费品的相对甚至绝对价格,并最终恶化了中国的贸易条件,使得贸易收益并不明显。本文围绕这些这些问题进行了一定层次的论证。     

东亚区域内最终产品需求的影响因素分析——基于面板数据的引力模型研究

本文利用东亚十国(或地区)1991～2010年间数据,运用引力模型,分析影响东亚区域内最终产品需求的因素。研究结果表明:区域性贸易协定(RTA)、经济总量、2008年金融危机和人均GDP差额绝对值,对区域内最终产品需求起显著促进作用;人口规模、地理距离对区域内最终产品需求起显著阻碍作用。1997年金融危机也对区域内最终产品需求起阻碍作用,但不显著。从行业差别来看,除了距离变量之外,各解释变量对资本品需求的影响均大于对消费品需求的影响。因此,为扩大东亚区域内的最终产品需求,区域内各经济体应该降低物流成本、发展区域性贸易合作组织、稳定汇率、扩大各自经济规模。     

反倾销政策与研发竞争

借助异质产品的Bertrand双寡头模型,本文分析了一国反倾销政策对该国企业和外国企业的研发、产品价格及社会福利的影响。研究结论表明:与自由贸易相比,当产品的差异度较小时,受反倾销政策保护的企业会策略性地利用反倾销政策而退出国外市场,减少研发投入,进而提高产品价格,而遭受反倾销政策约束的外国企业由于其研发投入的边际收入增加,因而会增加研发投入,降低产品价格。此外,反倾销政策的存在还有可能促进各国社会福利的提升。     

The role of production fragmentation in international business cycle synchronization in East Asia

This paper analyzes factors contributing to the observed increase in international business cycle synchronization between eight East Asian developing countries and the major developed economies of Japan and the United States. To this end, a two-country dynamic general equilibrium (DGE) model is proposed which focuses on the role of production fragmentation among these countries. A key feature of the model is that it includes the trade in differentiated capital goods, which are added to the capital stock for production, and the technology embodied in these capital goods. The parameters of the model are calibrated using actual data of the countries included. Model simulations are conducted for two periods (1993–1997 and 1999–2005), before and after the Asian financial crisis, showing that the increase in business cycle synchronization can be attributed mainly to the growing fragmentation of production activities.     

Immigrant Specificity and the Relationship between Trade and Immigration: Theory and Evidence

Studies routinely document that immigrant employment concentrates in non‐traded goods sectors and that many immigrants have low inter‐sectoral mobility. We consider these observed characteristics of immigrant employment with regard to the question of how immigration affects a nation's pattern of production and trade. We model an economy producing three goods; one is non‐traded. Domestic labor and capital are domestically mobile but internationally immobile. Allowing that some new immigrants will become specific to the non‐traded goods sector, the model indicates that the effects of immigration on output and trade depend importantly on the sectoral pattern of employment of both new and existing immigrants. Empirical investigation in a panel data set of OECD countries supports the model's prediction that immigration raises the output of non‐traded goods. Consistent with the model, we also find that immigration and trade are complements. Given its empirical support, the model's implications for immigration policy are then discussed.     

Promise,trust, and betrayal: Costs of breaching an implicit contract

We study the cost of breaching an implicit contract in a goods market. Young and Levy (2014) document an implicit contract between the Coca‐Cola Company and its consumers. This implicit contract included a promise of constant quality. We offer two types of evidence of the costs of breach. First, we document a case in 1930 when the Coca‐Cola Company chose to avoid quality adjustment by incurring a permanently higher marginal cost of production, instead of a one‐time increase in the fixed cost. Second, we explore the consequences of the company's 1985 introduction of “New Coke” to replace the original beverage. Using the Hirschman's (1970) model of Exit, Voice, and Loyalty, we argue that the public outcry that followed New Coke's introduction was a response to the implicit contract breach.     

世界经济周期的贸易传导机制

贸易究竟如何影响经济波动在世界范围内的传递?对这一问题的回答,必须结合与贸易有关的其他经济变量加以研究。实证研究证实了“贸易发展与经济周期的协动性具有正向关系”的结论,并且更深入地指出影响协动性的关键是贸易强度,而非受贸易模式影响的产业结构和贸易结构。在理论上,学者们在基础模型的基础上不断地加入了一些新元素,如不可贸易品、南北贸易模式等,试图对贸易传导机制进行更详细的描述,并力图解决两国模型中产生的“数量异常”和“价格异常”。     

Monopolistic competition with cross-country technological differences and international trade

We develop a two-factor, three-sector model of international trade in which there are cross-country technological differences in the monopolistically competitive sector. Firms in one country have a technology with high fixed costs and low marginal costs; firms in the other country have a technology with low fixed but high marginal costs. Under this model, although not under the monopolistically competitive model with identical technologies, trade patterns are determined by the interaction between the distribution of factor endowments (i.e., the Heckscher–Ohlin aspect) and technological differences in the monopolistically competitive sector (i.e., the Chamberlinian–Ricardian aspect). Furthermore, we show that autarky commodity prices are not very useful for predicting trade patterns, which is counterintuitive and again contrary to findings under the monopolistically competitive model with identical technologies.     

Collusive intra-industry trade in identical commodities

Collusive Intra-Industry Trade in Identical Commodities. — A homogenous-goods Cournot model with two countries and two firms is analyzed. Firms may collude by monopolizing their domestic markets, but they may also engage in collusive intra-industry trade. It turns out that, though such trade is costly because of transportation costs, firms might indeed trade since this enlarges the scope of successful collusion. Hence, intra-industry trade in homogenous goods is not a reliable indicator of competition.