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11. Construction of an Extended Environmental and Economic Social Accounting Matrix from a Practitioner’s Perspective

Author:
Onil Banerjee, Martin Cicowiez, Renato Vargas, and Mark Horridge
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
In 2014, the United Nations published the first International Standard for environmental economic statistics, known as the System of Environmental-Economic Accounting (SEEA).. As more countries adopt and implement the SEEA, the availability of consistent environmental and economic information increases the need for analytical tools that can use this data to respond to policy relevant questions. In this paper, we present a workflow to develop an environmentally extended social accounting matrix, which can serve as the basic database for the development of environmentally-extended computable general equilibrium models. To illustrate, and given its comprehensive implementation of the SEEA, we apply this workflow to the Guatemalan case and the Integrated Economic-Environmental Modeling (IEEM) Platform.
Topic:
Economics, United Nations, Basic Data, Accountability, Economic Policy, and Statistics
Political Geography:
South America, Latin America, Central America, Guatemala, and Global Focus

12. The Spillover Effects of Regional Trade Agreements on Trade

Author:
Dakshina G. De Silva, Soon-Cheul Lee, Robert P. McComb, and Maurizio Zanardi
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The purpose of this paper is to examine whether or not there is a spillover effect of third countries’ regional trade agreements (RTAs) on their bilateral trade relationships. To identify the RTA spillover effects, we expand a gravity model into a third-country framework using a dataset of bilateral trade and RTAs for 62 country-pairs over the period 2002-2013. We construct a weighted third-countries’ RTA contiguity matrix as well as a spatially-weighted matrix to identify both the spillover and spatial effects of RTA on trade flows. The results show that the spillover effects of RTAs on trade are positive while the spatial effects of RTA are negative and imply that third parties’ RTAs have complementary effects on bilateral trade while the existence of neighbors in the RTA between the two trade partners reduces their bilateral trade. As a result, the proliferation of RTAs expand international trade through spillover effects as well as trade creation and trade diversion.
Topic:
Bilateral Relations, Regional Integration, Economic Policy, and Trade
Political Geography:
Global Focus

13. Sources of Comparative Advantage in Services: Institution vs. Social Capital

Author:
Nakgyoon Choi and Soonchan Park
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Previous studies that have identified the impacts of institutions or cultural traits on comparative advantage focused on goods trade, but not services trade. In contrast to the rapid increase in trade in services, empirical examina-tion on sources of comparative advantage in services trade remains limited. This paper attempts to fill this gap by investigating empirically the impacts of institution as well as social capital on comparative advantage in services trade. Services are exposed to relatively more pre-choice risks than goods, because it is difficult to obtain information on the quality of services before the con-sumer decides to purchase. In addition, trade in services involved in global value chains possibly takes on the risks of contract breach by other firms along the same value chains. As a result, the transaction risks for trade in ser-vices are higher than for trade in goods. Using the World Input Output Da-tabase, we estimate the importance of social capital for comparative ad-vantage in services. We find that countries with more social capital tend to specialize in the production of contract-intensive services. We also find that social capital rather than institution matters for comparative advantage in ser-vices.
Topic:
Economic Policy, Institutions, Services, Trade, and Social Capital
Political Geography:
Global Focus

14. Exchange Rates and Firm Exports: The Role of Foreign Ownership and Subsidiaries

Author:
Hyelin Choi and Hyo Sang Kim
Publication Date:
08-2018
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Exchange rates have been changed unusually large these days. From 2011 to 2016, the Euro and the Japanese Yen have depreciated against the US Dollar by more than 25 percent. According to a theory, since competitively valued exchange rate helps to boost export growth, we should have observed a sub-stantial increase in export in the EU and Japan. However, the effectiveness of the exchange rates on exports appears to be weak across countries. This anomaly is one of the central puzzles in international macroeconomics: why large movements in the exchange rate have modest effects on the aggregate variables such as import prices, consumer prices, and quantity of exports. In this paper, we examines the role of global production linkages on ex-change rate elasticities by using Korean firm-level data. At firm-level, foreign-owned firms or firms with foreign subsidiaries participated in the Global Value Chains (GVC) play an important role in weakening the effect of ex-change rate movements on firm exports. The empirical results show that the exchange rate elasticity of total export is about -0.64, which implies that 10% appreciation of Korean Won would make a drop in total export by 6.4%. However, the exchange rate elasticities of firms are not the homogeneous across firms. We find that the exchange rate elasticities of firm exports are significant and negative for domestic-owned firms and firms without foreign subsidiary whereas those are insignificant for foreign-owned firms and firms with foreign subsidiaries. After controlling exports to foreign affiliates, we still find that the estimated exchange rate elasticities of exports are statistically insignificant, but become negative and relatively larger for firms with global production linkages. More-over, firms with higher GVC integration measure or more imported inter-mediate inputs have the significantly lower exchange rate elasticities of firm exports. It suggests that developments of global production linkages via firm ownership, within-industry or within-firm in the last decade play an essential role in alleviating the effect of exchange rate movements on the firm exports.
Topic:
Exchange Rate Policy, Economic Policy, Exports, Macroeconomics, and Global Value Chains
Political Geography:
Global Focus

15. Towards a More Inclusive Globalization: An Anti-Social Dumping Scheme

Author:
Dani Rodrik
Publication Date:
12-2018
Content Type:
Policy Brief
Institution:
Economics for Inclusive Prosperity (EfIP)
Abstract:
Theory and empirics both suggest that international trade has sharp distributional implications. Furthermore, redistribution caused by trade is often viewed by the general public as more harmful or disruptive than other domestic market shocks. I discuss conditions under which there may be a legitimate case for restricting trade to promote domestic social inclusion, and propose a specific policy – a social safeguards clause – targeting those circumstances.
Topic:
Economics, Globalization, International Trade and Finance, Economic Policy, Economic Theory, and Trade Liberalization
Political Geography:
Global Focus

16. Taxing multinational corporations in the 21st century

Author:
Gabriel Zucman
Publication Date:
09-2018
Content Type:
Policy Brief
Institution:
Economics for Inclusive Prosperity (EfIP)
Abstract:
Globalization and the rise of intangible capital have increased tax avoidance opportunities for large firms dramatically. 40% of multinational profits are shifted to tax havens each year globally and the United States loses about 15% of its corporate income tax revenue because of this shifting. I discuss the evidence on the redistributive effects of international tax competition. I then present a proposal to reform the corporate tax that would remove any incentive for firms to shift profits or move real activity to lowtax places. Contrary to a widespread view, it is possible to tax multinational companies (potentially at high rates) in a globalized world, even in the absence of international policy coordination.
Topic:
Economics, Globalization, Regulation, Multinational Corporations, Tax Systems, Economic Policy, and Economic Theory
Political Geography:
Global Focus

17. Macroeconomic Impact of Capital Flight in Sub-Saharan Africa

Author:
John Weeks
Publication Date:
09-2014
Content Type:
Working Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
This paper assesses the impact of capital flight on growth in thirty-one sub-Saharan African countries. It first considers the “macro fundamentals” hypothesis that capital flight would be lower in a country whose government adhered to “sound” macroeconomic policies. Analytical considerations fail to support this hypothesis. Second, it develops a growth estimating equation derived from the Harrod-Domar framework. The growth estimations support the conclusion that capital flight had a major impact on growth over the last three decades, 1980–2010. The negative impact was greatest for the petroleum-exporting countries and those affected by internal conflict, but it was also substantial for the other countries, with a few exceptions.
Topic:
Economics, Markets, Global Markets, Economic growth, Economic Policy, Macroeconomics, and Capital Flight
Political Geography:
Africa, Sudan, Nigeria, Angola, Chad, Cameroon, Global Focus, Gabon, and Republic of Congo

18. When will the global economy return to rapid growth?

Author:
Marek Dabrowski
Publication Date:
12-2013
Content Type:
Policy Brief
Institution:
Center for Social and Economic Research - CASE
Abstract:
More than six years have passed since the subprime mortgage crisis began in the US in the summer of 2007. In the following year, it spread to the entire world economy. Its consequences have not been fully overcome yet. Thus it’s not surprising that economists’ attention has been largely devoted to short-term, crisis-related issues like financial deleveraging and repairing the balance sheets of governments, corporations and households. For the macroeconomic policy debate, this means concentrating on demand management by using monetary and fiscal policy tools in order to return to a pre-crisis growth path. Rarely has the question been asked of whether or not this is a realistic goal, i.e., whether post-crisis growth can return to pre-crisis levels. An analysis of growth perspectives in the medium-to-longterm calls for using the neo-classical growth theory, according to which there are three factors at play: labor, capital and total factor productivity (TFP). In this brief we will try to figure out what their expected dynamics are and how much each of them can contribute to economic growth in the foreseeable future.
Topic:
Economic growth, Global Financial Crisis, Economic Policy, Macroeconomics, and Fiscal Policy
Political Geography:
Global Focus and Global Markets

19. Reducing Global Poverty: Engaging the Global Enterprise

Author:
Research and Policy Committee of the Committee for Economic Development
Publication Date:
07-2003
Content Type:
Policy Brief
Institution:
The Conference Board
Abstract:
This report is the first update to the 2002 CED report A Shared Future: Reducing Global Poverty. In this report, CED recommends that U.S.-based enterprises strive to maintain the same high standards of corporate engagement in all countries in which they operate, making no distinction between operations in the United States and abroad, yet recognizing that specific actions need to take into account national customs and traditions.
Topic:
Poverty, Business, Economic Policy, and Economic Development
Political Geography:
Global Focus