Essays On The Dynamic Response Of Trade To Trade Liberalization With Financial And Labor Market Frictions

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Essays on the Dynamic Response of Trade to Trade Liberalization with Financial and Labor Market Frictions

Author : Jae Wook Jung
Publisher :
ISBN 13 : 9781369311846
Total Pages : pages
Book Rating : 4.3/5 (118 download)

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Book Synopsis Essays on the Dynamic Response of Trade to Trade Liberalization with Financial and Labor Market Frictions by : Jae Wook Jung

Download or read book Essays on the Dynamic Response of Trade to Trade Liberalization with Financial and Labor Market Frictions written by Jae Wook Jung and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation studies the dynamic effect of trade liberalization on trade, especially during a transition period of trade liberalization. This research is new to the literature which has focused on the static and permanent effect of trade liberalization so far. The first and the second chapters examine the dynamics of how trade responds to trade liberalization before its actual implementation. The third chapter emphasizes the changes in several aspects of trade due to trade liberalization after its implementation. The first chapter finds that exporters enter into an export market prior to the actual implementation of a trade liberalization episode (the “early entry decision”) only if the financial market of an origin country is sufficiently developed. An empirical study of free trade agreements shows that the amount of early entry into export markets, measured as the extensive margin of trade during periods before the tariff is reduced, is positively correlated with the measure of the financial development of exporting countries. This new stylized fact can reconcile apparently contradictory findings in the existing literature about the effect of trade liberalization over time. I demonstrate that this discrepancy disappears when a measure of financial development, the relative size of private credit by banks and other financial intermediaries to GDP, is included in the regression and interacted with FTA time dummy variables.Based on this empirical finding, the second chapter provides the theoretical background of how the early entry decision of potential exporters during trade liberalization episode depends on an origin country’s financial market condition. Two essential ingredients are incorporated in a typical dynamic international trade model, which are a financial market friction as a type of borrowing constraints in the credit market and a congestion externality in the export entry resource market. The model describes how the financial market friction deters potential exporters’ entry decision even if they have incentives to enter earlier than the actual implementation of trade liberalization because of the congestion externality. The simulation result with a reasonable calibration mimics the empirical evidence of earlier entry of a financially developed exporting country. The third chapter discovers three empirical regularities: (1) As an exporting country's either labor market friction measure or financial market friction measure increases, the size of real exports after trade liberalization implementation increases more gradually when other conditions are controlled; (2) Financial market friction is more likely to deter the entry of firms into exporting markets in the transition episode (extensive margin), while labor market friction is more likely to affect the size of exports (intensive margin); (3) The impact of financial market development on exports tends to be realized earlier than the labor market frictions effect on exports. These findings shed light on the importance of both market frictions in analyzing international trade dynamics, in contrast to the existing literature that focuses on either financial market or labor market conditions.

Essays on Trade Liberalization and Labor Market Outcomes

Author : Zhe Jiang
Publisher :
ISBN 13 :
Total Pages : 159 pages
Book Rating : 4.:/5 (119 download)

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Book Synopsis Essays on Trade Liberalization and Labor Market Outcomes by : Zhe Jiang

Download or read book Essays on Trade Liberalization and Labor Market Outcomes written by Zhe Jiang and published by . This book was released on 2020 with total page 159 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation studies trade liberalization and labor market outcomes. The first two chapters examine the impact of China's trade liberalization on the adjustment of U.S. labor market for skilled and unskilled workers in a dynamic general equilibrium framework with firm heterogeneity and factor proportions. In the first chapter, I most specifically look into the effect of trade cost reduction on U.S. skill premium in an environment which I abstract from labor market friction. Featuring labor market search and matching frictions, the second chapter is part of a broader agenda on the labor market effect of China's trade liberalization and U.S. firms' offshoring decisions, with a greater focus on the dynamics of unemployment of skilled and unskilled workers. The third chapter investigates the impact of the China's increased trade openness on its local labor market. It examines the effects of China's domestic migration policy change and trade liberalization on wage inequality in China using a dynamic general equilibrium model of international trade and internal migration across regions. This dissertation showcases some of the ways trade policy can interact with firms' endogenous offshoring and entry decisions, workers' mobility choices, and labor markets frictions in a dynamic fashion. More specifically, the first chapter studies how wage inequality between skilled and unskilled workers interact with multinational firms' decisions and countries' different factor endowments using a two-country dynamic stochastic model featuring task-offshoring, heterogeneous firms and factor proportions. It shows that besides the traditional Stolper-Samuelson mechanism that shifts factors of production towards a country's comparative advantage sectors, there also exist other firm-level adjustment mechanisms that widen the wage gap after trade liberalization. It finds that in the short run, offshoring widens wage inequality between skilled and unskilled workers through increasing high-skilled wage and lowering low-skilled wage. Such effect is more announced in the beginning phase of the adjustment, and slows down over time as low-skilled wage rises faster than the cool-down of high-skilled wage increase. The intensive margin and the extensive margin are both active in shaping rising wage gap in the home country, with the latter playing a more important role in the short to medium run compared to the beginning stage following the shock. The second chapter studies the dynamic effects of offshoring on the unemployment rates and wage inequality across the high-skilled and low-skilled workers through the dynamics of firms' production location and entry decisions in general equilibrium. First, I examine the dynamic effects of offshoring cost reduction due to China's trade liberalization. Estimates from vector autoregressions (VARs) show that a decrease in offshoring costs is associated with a short-lived increase in low-skilled unemployment, but a persistent decline in high-skilled unemployment and a less persistent expansion of wage gap in the source country. Second, I build a two-country trade-in-task model with firm heterogeneity, endogenous selection into entry and offshoring as well as search and matching frictions to study the channels through which offshoring cost reductions affect the labor market outcomes for different skill groups over time. The model successfully reproduces the VAR evidence and highlights the importance of endogenous firm entry and labor market frictions in generating the empirical dynamic responses of wage and unemployment across different skill groups. The third chapter investigates China's labor market's responses to its own trade liberalization, which is a relatively less explored topic compared to the relationship between the China shock and labor market changes in other countries. Using data from CHIP (Chinese Household Income Project), this chapter aims to fill this gap by estimating the effects of trade liberalization on Chinese local labor markets. In addition, it investigates changes in urban to rural wage inequality and skill premium in urban and rural areas separately with the availability of surveys conducted in urban and rural households. In the model, a dynamic general equilibrium framework with heterogeneous firms, heterogeneous workers and internal migration is employed to study the impact of policy-generated trade cost reduction and easing of migration restrictions on Chinese wage inequality. I focus on the role of labor mobility that characterizes the large rural-to-urban migration in the midst of trade liberalization in shaping skill premium and urban to rural wage inequality. Calibrating the changes in policy-generated migration cost reduction and trade cost decline, as well as productivity increase in the tradable sector, this paper analyzes the responses of different measures of wage inequality and other macroeconomics variables following these shocks. This dissertation highlights the role of interaction of firm dynamics, factor endowments and labor market frictions in shaping the labor market adjustments. The positive effects of offshoring on the labor market for workers regardless of skill levels suggest that more trade frictions designed to restrict offshoring is likely to hinder firm entry, which is a key driver that contributes to higher wages and lower unemployment rates of both skilled and unskilled workers over time. It also points to the importance of labor market reforms by showing that easing of migration restriction and search and matching frictions are both beneficial to exports and wages of all workers, with consequences of rising wage inequality though.

Essays on International Trade, Financial Liberalization and the Labor Market

Author : Bonghoon Kim
Publisher :
ISBN 13 :
Total Pages : 176 pages
Book Rating : 4.:/5 (88 download)

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Book Synopsis Essays on International Trade, Financial Liberalization and the Labor Market by : Bonghoon Kim

Download or read book Essays on International Trade, Financial Liberalization and the Labor Market written by Bonghoon Kim and published by . This book was released on 2004 with total page 176 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Trade Liberalization and Unemployment

Author : Pierre-Richard Agénor
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 40 pages
Book Rating : 4.:/5 (318 download)

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Book Synopsis Trade Liberalization and Unemployment by : Pierre-Richard Agénor

Download or read book Trade Liberalization and Unemployment written by Pierre-Richard Agénor and published by International Monetary Fund. This book was released on 1995-02 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the effect of trade reform on wages and unemployment in a two-sector, three-good economy in which labor is imperfectly mobile across sectors. Wages in the export sector are set so as to minimize turnover costs. The analysis shows that a reduction in tariffs, coupled with an adjustment in lump-sum taxes to equilibrate the government budget, lowers wages in all production sectors in the short and the medium run but has an ambiguous effect on unemployment. Although employment and production of exportables expand in the medium run, the unemployment rate may rise or fall depending on whether the elasticity of wages in the export sector with respect to wages in the nontraded goods sector is lower or greater than unity. Potentially adverse effects may be mitigated in the long run, however, as a result of induced shifts in the structure of production activities.

International Trade and Labor Markets

Author : Carl Davidson
Publisher : W.E. Upjohn Institute
ISBN 13 : 0880992743
Total Pages : 156 pages
Book Rating : 4.8/5 (89 download)

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Book Synopsis International Trade and Labor Markets by : Carl Davidson

Download or read book International Trade and Labor Markets written by Carl Davidson and published by W.E. Upjohn Institute. This book was released on 2004 with total page 156 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Exports to Jobs

Author : Erhan Artuc
Publisher : World Bank Publications
ISBN 13 : 1464812497
Total Pages : 215 pages
Book Rating : 4.4/5 (648 download)

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Book Synopsis Exports to Jobs by : Erhan Artuc

Download or read book Exports to Jobs written by Erhan Artuc and published by World Bank Publications. This book was released on 2019-02-25 with total page 215 pages. Available in PDF, EPUB and Kindle. Book excerpt: South Asia has grown rapidly with significant reductions in poverty, but it has not been able to match the fast-growing working age population, leading to lingering concerns about jobless growth and poor job quality. Could export growth in South Asia result in better labor market outcomes? The answer is yes, according to our study, which rigorously estimates—using a new methodology—the potential impact from higher South Asian exports per worker on wages and employment over a 10-year period. Our study shows the positive side of trade. It finds that increasing exports per worker would result in higher wages—mainly for better-off groups, like more educated workers, males, and more-experienced workers—although less-skilled workers would see the largest reduction in informality. How can the benefits be spread more widely? Our study suggests that scaling up exports in labor-intensive industries could significantly lower informality for groups like rural and less-educated workers in the region. Also, increasing skills, and participation of women and young workers in the labor force could make an even bigger dent in informal employment. The region could achieve these gains by: (i) boosting and connecting exports to people (e.g., removing trade barriers and investment in infrastructure); (ii) eliminating distortions in production (e.g., by more efficient allocation of inputs); and (iii) protecting workers (e.g., by investing in education and skills).

The Globalization Paradox

Author : Dani Rodrik
Publisher : OUP Oxford
ISBN 13 : 0191634255
Total Pages : 442 pages
Book Rating : 4.1/5 (916 download)

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Book Synopsis The Globalization Paradox by : Dani Rodrik

Download or read book The Globalization Paradox written by Dani Rodrik and published by OUP Oxford. This book was released on 2012-05-17 with total page 442 pages. Available in PDF, EPUB and Kindle. Book excerpt: For a century, economists have driven forward the cause of globalization in financial institutions, labour markets, and trade. Yet there have been consistent warning signs that a global economy and free trade might not always be advantageous. Where are the pressure points? What could be done about them? Dani Rodrik examines the back-story from its seventeenth-century origins through the milestones of the gold standard, the Bretton Woods Agreement, and the Washington Consensus, to the present day. Although economic globalization has enabled unprecedented levels of prosperity in advanced countries and has been a boon to hundreds of millions of poor workers in China and elsewhere in Asia, it is a concept that rests on shaky pillars, he contends. Its long-term sustainability is not a given. The heart of Rodrik’s argument is a fundamental 'trilemma': that we cannot simultaneously pursue democracy, national self-determination, and economic globalization. Give too much power to governments, and you have protectionism. Give markets too much freedom, and you have an unstable world economy with little social and political support from those it is supposed to help. Rodrik argues for smart globalization, not maximum globalization.

Global Trends 2040

Author : National Intelligence Council
Publisher : Cosimo Reports
ISBN 13 : 9781646794973
Total Pages : 158 pages
Book Rating : 4.7/5 (949 download)

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Book Synopsis Global Trends 2040 by : National Intelligence Council

Download or read book Global Trends 2040 written by National Intelligence Council and published by Cosimo Reports. This book was released on 2021-03 with total page 158 pages. Available in PDF, EPUB and Kindle. Book excerpt: "The ongoing COVID-19 pandemic marks the most significant, singular global disruption since World War II, with health, economic, political, and security implications that will ripple for years to come." -Global Trends 2040 (2021) Global Trends 2040-A More Contested World (2021), released by the US National Intelligence Council, is the latest report in its series of reports starting in 1997 about megatrends and the world's future. This report, strongly influenced by the COVID-19 pandemic, paints a bleak picture of the future and describes a contested, fragmented and turbulent world. It specifically discusses the four main trends that will shape tomorrow's world: - Demographics-by 2040, 1.4 billion people will be added mostly in Africa and South Asia. - Economics-increased government debt and concentrated economic power will escalate problems for the poor and middleclass. - Climate-a hotter world will increase water, food, and health insecurity. - Technology-the emergence of new technologies could both solve and cause problems for human life. Students of trends, policymakers, entrepreneurs, academics, journalists and anyone eager for a glimpse into the next decades, will find this report, with colored graphs, essential reading.

The Long Shadow of Informality

Author : Franziska Ohnsorge
Publisher : World Bank Publications
ISBN 13 : 1464817545
Total Pages : 397 pages
Book Rating : 4.4/5 (648 download)

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Book Synopsis The Long Shadow of Informality by : Franziska Ohnsorge

Download or read book The Long Shadow of Informality written by Franziska Ohnsorge and published by World Bank Publications. This book was released on 2022-02-09 with total page 397 pages. Available in PDF, EPUB and Kindle. Book excerpt: A large percentage of workers and firms operate in the informal economy, outside the line of sight of governments in emerging market and developing economies. This may hold back the recovery in these economies from the deep recessions caused by the COVID-19 pandemic--unless governments adopt a broad set of policies to address the challenges of widespread informality. This study is the first comprehensive analysis of the extent of informality and its implications for a durable economic recovery and for long-term development. It finds that pervasive informality is associated with significantly weaker economic outcomes--including lower government resources to combat recessions, lower per capita incomes, greater poverty, less financial development, and weaker investment and productivity.

Trade and Employment

Author : Marion Jansen
Publisher :
ISBN 13 : 9789221253211
Total Pages : 0 pages
Book Rating : 4.2/5 (532 download)

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Book Synopsis Trade and Employment by : Marion Jansen

Download or read book Trade and Employment written by Marion Jansen and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Finance and Growth

Author : Ross Levine
Publisher :
ISBN 13 :
Total Pages : 130 pages
Book Rating : 4.:/5 (318 download)

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Book Synopsis Finance and Growth by : Ross Levine

Download or read book Finance and Growth written by Ross Levine and published by . This book was released on 2004 with total page 130 pages. Available in PDF, EPUB and Kindle. Book excerpt: "This paper reviews, appraises, and critiques theoretical and empirical research on the connections between the operation of the financial system and economic growth. While subject to ample qualifications and countervailing views, the preponderance of evidence suggests that both financial intermediaries and markets matter for growth and that reverse causality alone is not driving this relationship. Furthermore, theory and evidence imply that better developed financial systems ease external financing constraints facing firms, which illuminates one mechanism through which financial development influences economic growth. The paper highlights many areas needing additional research"--NBER website

Financial Crises Explanations, Types, and Implications

Author : Mr.Stijn Claessens
Publisher : International Monetary Fund
ISBN 13 : 1475561008
Total Pages : 66 pages
Book Rating : 4.4/5 (755 download)

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Book Synopsis Financial Crises Explanations, Types, and Implications by : Mr.Stijn Claessens

Download or read book Financial Crises Explanations, Types, and Implications written by Mr.Stijn Claessens and published by International Monetary Fund. This book was released on 2013-01-30 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.

Fiscal Policy and Long-Term Growth

Author : International Monetary Fund
Publisher : International Monetary Fund
ISBN 13 : 1498344658
Total Pages : 257 pages
Book Rating : 4.4/5 (983 download)

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Book Synopsis Fiscal Policy and Long-Term Growth by : International Monetary Fund

Download or read book Fiscal Policy and Long-Term Growth written by International Monetary Fund and published by International Monetary Fund. This book was released on 2015-04-20 with total page 257 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores how fiscal policy can affect medium- to long-term growth. It identifies the main channels through which fiscal policy can influence growth and distills practical lessons for policymakers. The particular mix of policy measures, however, will depend on country-specific conditions, capacities, and preferences. The paper draws on the Fund’s extensive technical assistance on fiscal reforms as well as several analytical studies, including a novel approach for country studies, a statistical analysis of growth accelerations following fiscal reforms, and simulations of an endogenous growth model.

Emerging Capital Markets and Globalization

Author : Augusto de la Torre
Publisher : World Bank Publications
ISBN 13 : 0821365444
Total Pages : 232 pages
Book Rating : 4.8/5 (213 download)

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Book Synopsis Emerging Capital Markets and Globalization by : Augusto de la Torre

Download or read book Emerging Capital Markets and Globalization written by Augusto de la Torre and published by World Bank Publications. This book was released on 2006-10-20 with total page 232 pages. Available in PDF, EPUB and Kindle. Book excerpt: Back in the early 1990s, economists and policy makers had high expectations about the prospects for domestic capital market development in emerging economies, particularly in Latin America. Unfortunately, they are now faced with disheartening results. Stock and bond markets remain illiquid and segmented. Debt is concentrated at the short end of the maturity spectrum and denominated in foreign currency, exposing countries to maturity and currency risk. Capital markets in Latin America look particularly underdeveloped when considering the many efforts undertaken to improve the macroeconomic environment and to reform the institutions believed to foster capital market development. The disappointing performance has made conventional policy recommendations questionable, at best. 'Emerging Capital Markets and Globalization' analyzes where we stand and where we are heading on capital market development. First, it takes stock of the state and evolution of Latin American capital markets and related reforms over time and relative to other countries. Second, it analyzes the factors related to the development of capital markets, with particular interest on measuring the impact of reforms. And third, in light of this analysis, it discusses the prospects for capital market development in Latin America and emerging economies and the implications for the reform agenda.

Globalization, Trade and Poverty in Ghana

Author : Charles Ackah
Publisher : IDRC
ISBN 13 : 9988647360
Total Pages : 258 pages
Book Rating : 4.9/5 (886 download)

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Book Synopsis Globalization, Trade and Poverty in Ghana by : Charles Ackah

Download or read book Globalization, Trade and Poverty in Ghana written by Charles Ackah and published by IDRC. This book was released on 2012 with total page 258 pages. Available in PDF, EPUB and Kindle. Book excerpt: Citing a paucity of empirical evidence on the poverty and distributional impacts of trade policy reform in Ghana as the main motivation for this volume, the editors (both of the Institute of Statistical, Social and Economic Research at the U. of Ghana) present eleven papers that combine theory and econometric analysis in an effort to assess linkages between globalization, trade, and poverty (including gendered aspects). Specific topics examined include manufacturing employment and wage effects of trade liberalization; the influence of education on trade liberalization impacts on household welfare; trade liberalization and manufacturing firm productivity; the impact of elimination of trade taxes on poverty and income distribution; food prices, tax reforms, and consumer welfare under trade liberalization; impacts on tariff revenues; and impacts on cash cropping, gender, and household welfare; Distributed in the US by Stylus. Annotation ©2012 Book News, Inc., Portland, OR (booknews.com).

Trade Liberalization in the Western Hemisphere

Author :
Publisher :
ISBN 13 :
Total Pages : 526 pages
Book Rating : 4.:/5 (318 download)

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Book Synopsis Trade Liberalization in the Western Hemisphere by :

Download or read book Trade Liberalization in the Western Hemisphere written by and published by . This book was released on 1995 with total page 526 pages. Available in PDF, EPUB and Kindle. Book excerpt:

On the Impact of Structural Reforms on Output and Employment

Author : Luiza Antoun de Almeida
Publisher : International Monetary Fund
ISBN 13 : 1484351770
Total Pages : 35 pages
Book Rating : 4.4/5 (843 download)

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Book Synopsis On the Impact of Structural Reforms on Output and Employment by : Luiza Antoun de Almeida

Download or read book On the Impact of Structural Reforms on Output and Employment written by Luiza Antoun de Almeida and published by International Monetary Fund. This book was released on 2018-04-06 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the effects of selected structural reforms on output and employment in the short and medium term. It uses a comprehensive cross-country firm-level dataset covering both advanced and emerging market economies over the period 2003-2014. In line with previous studies, it finds that structural reforms have in general a positive impact on output and employment in the medium term. Furthermore, the paper also assesses whether the impact of structural reforms varies with firm-specific characteristics, such as size, leverage, profitability, and sector. We find evidence that firm characteristics do influence the effectiveness of structural reforms. These findings have relevant policy implications as they help policymakers tailor the design of structural reforms to maximize their payoffs, taking into account their heterogeneous impact on firms.