Government Policies in a Granular Global Economy
Government Policies in a Granular Global Economy

Author: Cécile Gaubert

Publisher:

Published: 2021

Total Pages: 35

ISBN-13:

DOWNLOAD EBOOK

We use the granular model of international trade developed in Gaubert and Itskhoki (2020) to study the rationale and implications of three types of government interventions typically targeted at large individual firms -- antitrust, trade and industrial policies. We find that in antitrust regulation, governments face an incentive to be overly lenient in accepting mergers of large domestic firms, which acts akin to beggar-thy-neighbor trade policy in sectors with strong comparative advantage. In trade policy, targeting large individual foreign exporters rather than entire sectors is desirable from the point of view of a national government. Doing so minimizes the pass-through of import tariffs into domestic consumer prices, placing a greater portion of the burden on foreign producers. Finally, we show that subsidizing `national champions' is generally suboptimal in closed economies as it leads to an excessive build-up of market power, but it may become unilaterally welfare improving in open economies. We contrast unilaterally optimal policies with the coordinated global optimal policy and emphasize the need for international policy cooperation in these domains.

Government Policies in a Granular Global Economy
Government Policies in a Granular Global Economy

Author: Cecile Gaubert

Publisher:

Published: 2021

Total Pages: 0

ISBN-13:

DOWNLOAD EBOOK

We use the granular model of international trade developed in Gaubert and Itskhoki (2020) to study the rationale and implications of three types of government interventions typically targeted at large individual firms -- antitrust, trade and industrial policies. We find that in antitrust regulation, governments face an incentive to be overly lenient in accepting mergers of large domestic firms, which acts akin to beggar-thy-neighbor trade policy in sectors with strong comparative advantage. In trade policy, targeting large individual foreign exporters rather than entire sectors is desirable from the point of view of a national government. Doing so minimizes the pass-through of import tariffs into domestic consumer prices, placing a greater portion of the burden on foreign producers. Finally, we show that subsidizing `national champions' is generally suboptimal in closed economies as it leads to an excessive build-up of market power, but it may become unilaterally welfare improving in open economies. We contrast unilaterally optimal policies with the coordinated global optimal policy and emphasize the need for international policy cooperation in these domains.

National Policy in a Global Economy
National Policy in a Global Economy

Author: I. Budge

Publisher: Springer

Published: 2014-11-21

Total Pages: 120

ISBN-13: 1137473053

DOWNLOAD EBOOK

This study offers an analysis of the UK's current economic policy options and a plan for improving life for ordinary citizens via a sensible and realistic understanding of governments' limited ability to manage economic performance. It provides a manifesto which political parties could immediately adopt to make life better for all.

Global Economic Prospects, June 2021
Global Economic Prospects, June 2021

Author: World Bank

Publisher: World Bank Publications

Published: 2021-08-03

Total Pages: 339

ISBN-13: 1464816662

DOWNLOAD EBOOK

The world economy is experiencing a very strong but uneven recovery, with many emerging market and developing economies facing obstacles to vaccination. The global outlook remains uncertain, with major risks around the path of the pandemic and the possibility of financial stress amid large debt loads. Policy makers face a difficult balancing act as they seek to nurture the recovery while safeguarding price stability and fiscal sustainability. A comprehensive set of policies will be required to promote a strong recovery that mitigates inequality and enhances environmental sustainability, ultimately putting economies on a path of green, resilient, and inclusive development. Prominent among the necessary policies are efforts to lower trade costs so that trade can once again become a robust engine of growth. This year marks the 30th anniversary of the Global Economic Prospects. The Global Economic Prospects is a World Bank Group Flagship Report that examines global economic developments and prospects, with a special focus on emerging market and developing economies, on a semiannual basis (in January and June). Each edition includes analytical pieces on topical policy challenges faced by these economies.

Retooling Global Development and Governance
Retooling Global Development and Governance

Author: Rob Vos

Publisher: Bloomsbury Academic

Published: 2014-01-02

Total Pages: 0

ISBN-13: 9781780932316

DOWNLOAD EBOOK

This book is available as open access through the Bloomsbury Open Access programme and is available on bloomsburycollections.com. In Retooling Global Development and Governance a team of UN experts debate new ideas about how to overcome deficiencies in the ongoing process of globalization and in the existing mechanisms for global economic governance. They do not claim to offer a blueprint, rather a set of ideas that could become the basis for a coherent "toolbox" designed to guide development policies and international cooperation. Promising directions for reform discussed in the book include: - Strengthening government capacities for formulating and implementing national development strategies - New strategies for ensuring that official development assistance is aligned with national priorities - Enhancing international trade and financial systems so that countries with limited capabilities can successfully integrate into the global economy - Creating new mechanisms for dealing with deficiencies, such as specialized multilateral frameworks through which to govern international migration and labour mobility, international financial regulation, multinational corporations and global value chains regulation and sovereign debt workouts. Above all, the book highlights the need for a strong mechanism for global economic coordination to establish coherence across all areas of global economic governance.

Dominant Currency Paradigm: A New Model for Small Open Economies
Dominant Currency Paradigm: A New Model for Small Open Economies

Author: Camila Casas

Publisher: International Monetary Fund

Published: 2017-11-22

Total Pages: 62

ISBN-13: 1484330609

DOWNLOAD EBOOK

Most trade is invoiced in very few currencies. Despite this, the Mundell-Fleming benchmark and its variants focus on pricing in the producer’s currency or in local currency. We model instead a ‘dominant currency paradigm’ for small open economies characterized by three features: pricing in a dominant currency; pricing complementarities, and imported input use in production. Under this paradigm: (a) the terms-of-trade is stable; (b) dominant currency exchange rate pass-through into export and import prices is high regardless of destination or origin of goods; (c) exchange rate pass-through of non-dominant currencies is small; (d) expenditure switching occurs mostly via imports, driven by the dollar exchange rate while exports respond weakly, if at all; (e) strengthening of the dominant currency relative to non-dominant ones can negatively impact global trade; (f) optimal monetary policy targets deviations from the law of one price arising from dominant currency fluctuations, in addition to the inflation and output gap. Using data from Colombia we document strong support for the dominant currency paradigm.

Global Waves of Debt
Global Waves of Debt

Author: M. Ayhan Kose

Publisher: World Bank Publications

Published: 2021-03-03

Total Pages: 403

ISBN-13: 1464815453

DOWNLOAD EBOOK

The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.

World Development Report 2020
World Development Report 2020

Author: World Bank

Publisher: World Bank Publications

Published: 2019-11-19

Total Pages: 511

ISBN-13: 1464814953

DOWNLOAD EBOOK

Global value chains (GVCs) powered the surge of international trade after 1990 and now account for almost half of all trade. This shift enabled an unprecedented economic convergence: poor countries grew rapidly and began to catch up with richer countries. Since the 2008 global financial crisis, however, the growth of trade has been sluggish and the expansion of GVCs has stalled. Meanwhile, serious threats have emerged to the model of trade-led growth. New technologies could draw production closer to the consumer and reduce the demand for labor. And trade conflicts among large countries could lead to a retrenchment or a segmentation of GVCs. World Development Report 2020: Trading for Development in the Age of Global Value Chains examines whether there is still a path to development through GVCs and trade. It concludes that technological change is, at this stage, more a boon than a curse. GVCs can continue to boost growth, create better jobs, and reduce poverty provided that developing countries implement deeper reforms to promote GVC participation; industrial countries pursue open, predictable policies; and all countries revive multilateral cooperation.