Bilateral trade effects of fiscal devaluation: Evidence from OECD countries

This paper empirically examines the effects of a fiscal devaluation on bilateral trade. To this end, employers’ social contribution (ESC) and value-added tax (VAT), which stand as the factors that represent typical fiscal devaluation, are embodied within the framework of a gravity model. Fixed effects vector decomposition (FEVD) technique is applied to the empirical models specified within this framework, employing panel data from 22 OECD countries over the 1980–2014 periods. The findings show that the effectiveness of the fiscal devaluation policy seems to alter with respect to how ESC and VAT are measured. Considering the fiscal devaluation policy implemented unilaterally, the policy turns out to be effective in nine countries in the sample.     

固定资产减值引起新会计问题的思考

2001年,财政部颁布实施的《企业会计制度》首次将减值会计应用到固定资产的期末计量.为配合企业会计制度的具体实施,2002年财政部又发布了《企业会计准则--固定资产》,对固定资产减值会计作了详细的规定,要求企业在期末对固定资产进行检查,发现固定资产发生诸如实体性贬值、功能性贬值或经济性贬值等有形或无形损耗时,应当计算固定资产的可收回金额,以确定固定资产是否发生减值.固定资产减值的运用,对我国传统会计观念造成很大冲击,现就引发的一些新会计问题,提出几点思考.     

Trade law and trade flows

This paper develops and estimates a model to study the effect of improving the quality of commercial trade law on trade flows. We focus on improvements aimed to privately resolve disputes among trading partners: international commercial arbitration and conciliation. The main novelty of the model is to explicit the balance between the contractual quality of importer and exporter (contractual distance) in an environment with informational frictions (contractual noise). Using a structural gravity estimation with high-dimensional fixed effects, the main contribution of the empirical exercise is to confirm previous results and unravel new traits that align with our theoretical results. Arbitration has a moderate and positive effect on exports that increases (decreases) with the contractual quality of the exporter (importer) and the remoteness of markets. The effects of conciliation are similarly positive, but only for similar trading partners with high levels of income. Results also suggest both domestic trade law reform and international treaties have a positive effect on trade, with a stronger effect of the latter.     

Time,uncertainty and trade flows

This paper quantifies the impact of international transport time on bilateral trade flows in goods using previously unexploited information drawn from a large data set on international parcel delivery times. In line with previous work, we find that an extra day spent in international transit reduces bilateral trade by just under 1% at the sample median. In addition, and for the first time in the literature, we examine the impact of time-related uncertainty, which requires traders to hold costly inventories or build costly redundancies into supply chains. We find that a one day increase in international transport time uncertainty reduces bilateral trade flows by just over 1%. Splitting the sample into developing and developed countries shows that international transit time matters primarily for south–south trade, whereas uncertainty is relatively more important for north–north trade. Using new data on trade in intermediate versus final goods, we also find some evidence that time and uncertainty both matter more for movements of intermediates of the type that takes place within global value chains.     

EMU and trade: A PPML re-assessment with intra-national trade flows

This paper examines the EMU effect on trade for the eleven early joiners and Greece relying for the first time on data that include both international and intra-national trade flows, in line with all the microfoundations of the structural gravity model of trade. We find that the overall EMU impact on trade is positive between its members and, specially, for trade between members and non-members. Interestingly, we further show that the effect of the EMU on bilateral trade remarkably differs across countries. For Ireland, Belgium–Luxembourg, Spain, Portugal and Austria, we find robust evidence that EMU has boosted trade both with other members and with third countries, while for Finland, France, Germany, Italy and the Netherlands, the results suggest that only trade with third countries has been enhanced by the EMU. Greece is the only country that shows a negative impact in trade with other EMU members and no effect in trade with non-members. Finally, the results across countries according to the direction of the trade flows (exports versus imports) do not show significant differences in any case.     

Environmental controls,trade and resource flows

In the October issue of INTERECONOMICS the author already published an article on “Environmental issues and the Developing Economies“. The present continuation deals with the effects which the adoption of environmental controls in the developed countries may have on the developing economies.     

Welfare implications of trade liberalization and fiscal reform: A quantitative experiment

This paper studies the welfare implications of revenue-neutral trade liberalization and fiscal reform programs for developing economies using a multi-sector dynamic general equilibrium model of a small open economy. We analyze how different combinations of tariffs – on imported consumption goods, intermediate inputs, and capital goods – and taxes – on consumption, labor income and capital income – affect the transitional and long-run welfare. We report three main findings. First, trade liberalization programs financed by consumption and labor income taxes tend to result in substantial welfare gains, but financing the lost tariff revenue through capital income taxes can have an adverse impact on welfare. Second, a significant fraction of welfare changes is due to transitional effects stemming from the allocation of resources in response to changes in tariffs and taxes. Third, trade liberalization and fiscal reform programs often translate into much larger welfare gains in countries that are more open to international financial markets.     

Estimating the effects of free trade agreements on international trade flows using matching econometrics

This paper provides the first cross-section estimates of long-run treatment effects of free trade agreements on members' bilateral international trade flows using (nonparametric) matching econometrics. Our nonparametric cross-section estimates of ex post long-run treatment effects are much more stable across years and have more economically plausible values than corresponding OLS cross-section estimates from typical gravity equations. We provide plausible estimates of the long-run effects of membership in the original European Economic Community (EEC) and the Central American Common Market (CACM) between 1960 and 2000 and the estimates confirm anecdotal reports of these agreements' effectiveness.     

The middle east and the EEC: An analysis of trade flows

The Middle East has become the largest external supplier of imports to the European Community, and is also the EC's largest export market. Rising oll prices have not only affected the value of EC imports from the Middle East, but have also ultimately determined the ability of the Middle Eastern states to pay for Community exports. What are the prospects for the continuing growth of trade between the Community and the Middle East? What would be the effect of a fall in oil prices or of a decline in the EC's dependence on Middle Eastern oil?     

Exchange-rate variability and industry trade flows between Malaysia and Japan

This research investigates the exchange-rate risk sensitivity of Malaysian bilateral trade flows with its important trading partner, Japan. To this end, bounds testing approach to co-integration is applied using industry level data over the monthly period 2000–2013. Findings suggest that above the one-third of the total co-integrated export (43.86%) and import (34.54%), industries experiences the ringgit/yen variability effect in the short run. However, this effect sustains in relatively less number of export (14.03%) and import (32.73%) industries in the long run. It is interesting to note that exchange-rate risk boosts trade flows in the majority of these affected industries.     

Why some countries trade more,some trade less,some trade almost nothing: The effect of the governance environment on trade flows

We examine the effect of a country's governance environment on its propensity to trade. Using an updated framework of governance environment, we classify countries based on the dominant mode of governance into three types: (1) rule-based (strong public rule of law), (2) relation-based (weak rule of law and strong informal network based on private relations), and (3) family-based (absence of both public rules and private network). We then examine how different governance types affect trade patterns among 44 countries representing 89% of world trade. We find that overall, rule-based countries trade more than relation-based or family-based countries. A large positive effect on trade flows exists between two highly rule-based countries and between two relation-based countries. Any trade relationship involving a family-based country negatively affects trade flows, even between two family-based countries. Our study contributes to the trade literature by examining the effects of different types of governance environment on trade flows and more successfully explaining why some countries still trade almost nothing even after scholars and policy makers have convincingly proven that freer trade leads to higher welfare for a country.     

Contractionary effects of devaluation

A simple model is developed to illustrate a number of contractionary effects of currency devaluation, some of which have been noted previously. In a Keynesian model, it is shown that depreciation can lead to a reduction in national output if (i) imports initially exceed exports: (ii) there are differences in consumption propensities from profits and wages; (iii) government revenues are increased by devaluation, e.g. when there are significant export taxes. Similar effects are also shown to exist in monetarist models, via reductions in both real balances and the nominal money supply. A numerical example illustrates the results for an economy ‘typical’ of semi-industrialized countries.     

Skill classification does matter: estimating the relationship between trade flows and wage inequality

Empirical work must pay careful attention to how it measures the relative skill abundance of countries and the relative skill intensity embodied in trade flows. This paper compiles a new data set, using income levels, average education, manufacturing wages, and an index of these three variables, to classify countries and trade flows as relatively high skill or low skill. Then, in order to show the importance of skill classification, it uses a reduced-form fixed-effects model to estimate the relationship between trade flows and wage inequality. This specification not only controls for any time-invariant omitted variables, but also permits the inclusion of a large number of diverse countries. When more accurate skill rankings are utilized, results suggest that, in high-skill abundant countries, increased trade with lower-skill countries is correlated with an increase in wage inequality. This relationship is significant and highly robust and is driven by the negative relationship between trade and low-skill wages (instead of a positive relationship between trade and high-skill wages.) Results, however, are highly dependent on the skill classification utilized.     

关于资产减值的会计核算方法

为了真实地反映企业资产的质量,为信息使用者提供客观的会计信息,企业应当于资产负债表日对发生减值的资产计提资产减值准备.为了保持应有的谨慎.企业还应当合理地预计各项资产可能发生的损失,对可能发生的各项资产损失计提资产减值准备,并作相应的会计处理.就资产减值确认计量及其财务处理等进行分析.     

关于资产减值的会计核算方法

为了真实地反映企业资产的质量,为信息使用者提供客观的会计信息,企业应当于资产负债表日对发生减值的资产计提资产减值准备.为了保持应有的谨慎,企业还应当合理地预计各项资产可能发生的损失,对可能发生的各项资产损失计提资产减值准备,并作相应的会计处理.就资产减值确认计量及其财务处理等进行分析.     

Effect of exchange rate volatility on industry trade flows between Malaysia and China

This paper investigates the impact of ringgit/yuan volatility on Malaysian trade with her largest trading partner, China. The short- and long-run impacts are estimated using bounds testing approach to cointegration analysis and disaggregated bilateral trade data by industry over the period of 1985–2010. Specifically, we considered a total of 151 importing and 24 exporting industries in Malaysia that traded with China. Our finding indicates that cointegration existed in 94 Malaysian import industry models and 16 Malaysian export industry models. Among these cases, exchange rate volatility has short-run effects on majority of the models. However, the short-run effects shift into the long-run effects in 46 out of 69 industries in import models and 5 out of 10 industries in export models. Results indicate that the exchange rate uncertainty has positive effects on majority of these industries.     

Flexible exchange rates and international trade: An empirical investigation of bilateral flows

This paper investigates the alleged adverse effect of floating exchange rates on international trade. A simple model is constructed to test the relationship between exchange rate variability and bilateral trade flows between the United States and three of its major trading partners: Canada, Japan and Germany. Using data from 1960 to 1983 to encompass both “stable” and floating rate regimes, it is shown that while exchange rate variability is considerably higher in the floating period, there is no evidence that this greater variability has had a negative impact on trade flows.