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12. Does Asymmetric Nonlinear Approach Explain the Relationship Between Exchange Rate and Trade of Iran?
- Author:
- Mahdi Ghodsi, Mohammad Sharif Karimi, and Robert Stehrer
- Publication Date:
- 09-2020
- Content Type:
- Working Paper
- Institution:
- The Vienna Institute for International Economic Studies (WIIW)
- Abstract:
- Until 2012, the Central Bank of Iran (CBI) used its policy rate to stabilise the rial’s exchange rate and, given a persistent current-account surplus, had accumulated sizeable currency reserves. In 2012, however, international sanctions against Iran intensified and the value of the rial halved against the US dollar. Since then Iran has followed a dual interest rate policy, with both a market rate and an official rate applied by the CBI to major imports. In recent years, as sanctions have cut access to foreign reserves, the gap between the two rates has widened substantially. Given these important changes in the exchange rate regime, this paper investigates the impact of the real exchange rate on the trade balance in Iran over the period 1997-2017. For this purpose, an asymmetric model is used, as the speed of the effects of changes in the exchange rate can be asymmetric. The results of the nonlinear autoregressive distributed lag model (NARDL) indicate that this is indeed the case. Results are generally consistent with the Marshall-Lerner condition: an exchange rate depreciation improves the trade balance, whereas an appreciation worsens it. However, the trade balance reacts more strongly in the short run to depreciations of the rial than to appreciations. Although the government could easily improve the trade balance in the short run through currency depreciation, policymakers should in the longer run promote non-oil exports to reduce dependency on oil and to diversify the economy.
- Topic:
- Economics, International Political Economy, International Trade and Finance, Exchange Rate Policy, Central Bank, and Models
- Political Geography:
- Europe and Iran
13. Refugees’ Integration into the Austrian Labour Market: Dynamics of Occupational Mobility and Job-Skills Mismatch
- Author:
- Mahdi Ghodsi and Robert Stehrer
- Publication Date:
- 10-2020
- Content Type:
- Working Paper
- Institution:
- The Vienna Institute for International Economic Studies (WIIW)
- Abstract:
- Eight multilateral rounds of negotiations under the General Agreement on Tariffs and Trade (GATT) and international agreements under the World Trade Organisation (WTO) have contributed significantly to the reduction of tariffs among WTO members. However, over the years legitimate reasons for the imposition of non-tariff measures (NTMs) within regulations have triggered their extensive use. Among these measures, technical barriers to trade (TBTs) and sanitary and phytosanitary (SPS) measures allow countries to impose restrictions on the import of low-quality products suspected of harming domestic consumers’ health, plant life or the environment. Such trade policy instruments may lead to higher standards in the import market, in addition to improving market efficiency through information requirements such as mandatory labelling. This paper analyses two types of regulative and standard-like NTMs – TBTs and SPS measures – and the quality improvement of traded products that is driven by their imposition, which might be a general underlying motive for the adoption of such regulations. Based on a model framework involving both the supply and the demand side of trade and using four types of measures of these NTMs, this paper assesses the impact of TBTs and SPS measures on the quality of traded products. A dummy variable measuring the existence of these NTMs and a count variable indicating their stringency are used in the analysis. Moreover, two other variables indicate flows of NTMs imposed in each year and stocks of these NTMs accumulated over years. The results indicate that TBTs and SPS measures do indeed imply a higher quality of traded products, which is also consistent with the model when NTMs enter as a specific trade cost. Stringent TBTs with more regulations imposed in each year (i.e. flows of count TBTs) have the largest impact on the quality of traded products. However, for SPS measures only the existence of a regulation (i.e. the dummy variable on flows of SPS measures) on a traded product has the strongest impact on its quality.
- Topic:
- Economics, International Political Economy, International Trade and Finance, WTO, Non-Tariff Measures, and GATT
- Political Geography:
- Europe and Global Focus
14. Implications of Foreign Direct Investment, Capital Formation and its Structure for Global Value Chains
- Author:
- Amat Adarov and Robert Stehrer
- Publication Date:
- 11-2019
- Content Type:
- Working Paper
- Institution:
- The Vienna Institute for International Economic Studies (WIIW)
- Abstract:
- In the age of globalisation, international trade and foreign direct investment (FDI) have become integral elements of cross-country production sharing. In this paper we empirically assess the impact of FDI, as well as capital dynamics and structure, on the formation of global value chains (GVC) and trade in value added at country and sectoral levels based on a database constructed for a sample of European countries over the period 2000-2014. The analysis reveals that inward FDI is especially conducive to the formation of backward linkages while outward FDI facilitates forward GVC participation, especially in high-tech manufacturing sectors. A particularly robust influence of FDI and capital accumulation on GVC integration is identified in the textile and clothing industry. While capital accumulation in general intensifies GVC linkages for most sectors, ICT capital appears to be especially instrumental for backward integration of electrical and transportation equipment sectors.
- Topic:
- Globalization, International Trade and Finance, Foreign Direct Investment, Trade, and Global Value Chains
- Political Geography:
- United States, Japan, and Europe
15. The Future Development of EU Exports in a Global Context
- Author:
- Robert Stehrer, Roman Stöllinger, and Sandra Leitner
- Publication Date:
- 11-2017
- Content Type:
- Working Paper
- Institution:
- Center for Social and Economic Research - CASE
- Abstract:
- Global trade patterns are changing rapidly. Emerging economies are increasing their share of exports overall and intensifying competition in nearly all sectors. Using a gravity-based approach, this report examines the future profile of European Union (EU) world market shares at the aggregate and sectoral level. It further points towards the changing patterns of trade within the EU. Based on the results, some conclusions on EU industrial policy are drawn.
- Topic:
- Industrial Policy, International Trade and Finance, Global Markets, Economic Growth, and Trade
- Political Geography:
- Europe, Global Focus, and European Union