Duration and Duration Uncertainty of Trade Agreements
Duration and Duration Uncertainty of Trade Agreements

Author: Boniface Bounoung

Publisher:

Published: 2017

Total Pages: 18

ISBN-13:

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The purpose of this paper is to examine all the kinds of temporal uncertainties that AGOA creates on the eligible countries and the theoretical relationship between these temporal uncertainties and its efficiency. The paper attempts to answer the critical question: does temporal uncertainty of AGOA affect its efficiency?The paper uses a dynamic model in presence of technologic transfers and irreversibility of investments. This paper found that long-run uncertainty has a negative impact not only on investment decisions, but also on wages and on others sides of economy. In addition, when we coupled short-run and long-run uncertainties, we found that these effects are more horrendous. This study implies that AGOA can be more efficient if the short-run uncertainty is suppressed.

Uncertainty and Trade Agreements
Uncertainty and Trade Agreements

Author: Nuno Limão

Publisher:

Published: 2013

Total Pages: 43

ISBN-13:

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In this paper we explore the potential gains that a trade agreement (TA) can provide by regulating trade-policy uncertainty, in addition to the more standard gains from reducing the mean levels of trade barriers. We show that in a standard trade model with income-risk neutrality there tends to be an uncertainty- increasing motive for a TA. With income-risk aversion, on the other hand, the uncertainty-managing motive for a TA is determined by interesting trade-offs. For a given degree of risk aversion, an uncertainty- reducing motive for a TA is more likely to be present when the economy is more open, the export supply elasticity is lower and the economy is more specialized. Governments have stronger incentives to sign a TA when the trading environment is more uncertain. As exogenous trade costs decline, the gains from decreasing trade-policy uncertainty tend to become more important relative to the gains from reducing average trade barriers. We also derive simple "sufficient statistics" to determine the direction of the uncertainty motive for a TA and the associated welfare gains, and we apply them to the trading relationship between US and Cuba before 1934. Finally, we examine how the uncertainty motive for a TA is affected by the presence of ex-ante investments, and examine conditions under which an uncertainty-reducing TA will increase investment in the export sector.

Risk, Uncertainty and Profit
Risk, Uncertainty and Profit

Author: Frank H. Knight

Publisher: Cosimo, Inc.

Published: 2006-11-01

Total Pages: 401

ISBN-13: 1602060053

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A timeless classic of economic theory that remains fascinating and pertinent today, this is Frank Knight's famous explanation of why perfect competition cannot eliminate profits, the important differences between "risk" and "uncertainty," and the vital role of the entrepreneur in profitmaking. Based on Knight's PhD dissertation, this 1921 work, balancing theory with fact to come to stunning insights, is a distinct pleasure to read. FRANK H. KNIGHT (1885-1972) is considered by some the greatest American scholar of economics of the 20th century. An economics professor at the University of Chicago from 1927 until 1955, he was one of the founders of the Chicago school of economics, which influenced Milton Friedman and George Stigler.

Trade Agreements at the Crossroads
Trade Agreements at the Crossroads

Author: Susy Frankel

Publisher: Routledge

Published: 2013-11-20

Total Pages: 280

ISBN-13: 1317964551

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The book examines trade agreements in the context of the current world economic crisis and the uncompleted World Trade Organization (WTO) Doha Round of trade negotiations. With economies shrinking and protectionism on the rise, many fear a protracted global recession. This raises important questions as to what role trade agreements – multilateral, plurilateral, and bilateral – should be playing in the current climate of uncertainty, and how best to plan for a more stable economic future. Previous assumptions are now being questioned, making this an opportune time to critically examine the WTO, free trade agreements, bilateral investment treaties, and other international economic law instruments. Furthermore, participants in international agreements are concerned with emerging issues that have the potential to strengthen or weaken the global trading system, including matters of treaty interpretation; terms of new agreements; and effects of existing provisions. This book provides a timely addition to the international economic law literature, as its submissions have been prepared during a time of unusual uncertainty and economic change; individuals interested in international economic law will seek scholarship that recognizes the current international economic climate. This book should be of interest to a wide range of academics and student researchers, as well as policymakers and practitioners.

The Impact of Trade Agreements
The Impact of Trade Agreements

Author: Swarnali Ahmed Hannan

Publisher: International Monetary Fund

Published: 2016-06-10

Total Pages: 32

ISBN-13: 1484386523

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The Trans-Pacific Partnership (TPP) has reinvigorated research on the ex-ante impact of trade agreements. The results from these ex-ante models are subject to considerable uncertainties, and needs to be complimented by ex-post studies. The paper fills this gap in recent literature by employing synthetic control methods (SCM) – currently extremely popular in micro and macro studies – to understand the impact of trade agreements in the period 1983–1995 for 104 country pairs. The key advantage of using SCM to address selection bias – one of the persisting issues in trade literature – is that it allows the effect of unobserved confounder to vary with time, as opposed to traditional econometric methods that can deal with time-invariant unobserved country characteristics. Using SCM approach, the paper finds that trade agreements can generate substantial gains, on average an increase of exports by 80 percentage points over ten years. The export gains are higher when emerging markets have trade agreements with advanced markets. The paper shows that all the countries in NAFTA have substantially gained due to NAFTA. Finally, there is some evidence that trade agreements can potentially lead to slight import diversion, but not export diversion.

The Heterogeneous Effects of Uncertainty on Trade
The Heterogeneous Effects of Uncertainty on Trade

Author: Ibrahim Nana

Publisher: International Monetary Fund

Published: 2024-07-09

Total Pages: 45

ISBN-13:

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This paper empirically investigates the relationship between uncertainty and trade. We use a gravity model for 143 countries over the 1980-2021 period to assess the impact of uncertainty on bilateral trade. We confirm that, in general, uncertainty has a negative impact on trade. The findings suggest that a one standard deviation increase in global uncertainty is associated with a decline in bilateral trade by 4.5 percent, with fuel and industrial products trade being the most impacted. This negative impact is observed for uncertainty on both sides of the border, with a higher impact of uncertainty from the importing country. The article goes deeper into the analysis and shows that deeper trade integration (horizontal integration) mitigates the negative impact of uncertainty on trade. In contrast, higher participation in global value chains (vertical integration) amplifies the negative effect of uncertainty on trade. We find that geopolitical tensions amplify the deterrent effect of uncertainty on trade. Finally, the result is heterogeneous across income levels, regions, and resource endowment: (a) uncertainty has a negative impact on bilateral trade between Emerging Markets and Developing Economies and Advanced Economies; however, (b) at the regional level, Africa and Europe’s intraregional trade decrease as uncertainty surges. (c) Evidence shows that non-resources-rich countries are more at risk.

Uncertainties and Risk Assessment in Trade Relations
Uncertainties and Risk Assessment in Trade Relations

Author: Ojo, Marianne

Publisher: IGI Global

Published: 2017-11-30

Total Pages: 436

ISBN-13: 1522541322

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Country’s affairs are greatly impacted by shifts in government; thus, the availability of research on current happenings within governmental policy and relations is imperative to keep citizens informed. Uncertainties and Risk Assessment in Trade Relations presents an innovative examination of the ambiguities of foreign importing and exporting and its impact on governmental aspects such as global relations and financial stability. Featuring coverage on a range of topics including border adjustment, tax reforms, and liquidity regulation, this publication is targeted towards academicians, researchers, and students interested in the recent happenings and opinions of international trade.

Policy Externalities And International Trade Agreements
Policy Externalities And International Trade Agreements

Author: Limao Nuno

Publisher: World Scientific

Published: 2018-09-19

Total Pages: 440

ISBN-13: 9813147997

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The book Policy Externalities and International Trade Agreements is a selection of published articles examining how policy externalities motivate and can be addressed by international trading institutions. The studies provide groundbreaking evidence of the role of international market power and policy uncertainty as motives for trade agreements and on the potential clash between preferential trade liberalization (e.g. European Union, NAFTA) and multilateral agreements (WTO). The studies presented in this book not only identify and estimate how different policies interact with each other and across agreements, but also examine how international trading institutions can be used to limit redistribution towards special interest groups and enforce better cooperation across issues, such as labor and the environment, and between developing and developed countries.