Found 308 article(s) in category 'Trade Policy'

How Africa can negotiate an effective continental free trade area agreement

How Africa can negotiate an effective continental free trade area agreement. Calestous Juma, November 14, 2017, Opinion, “African countries are forging ahead to complete negotiations for a continental free trade area between 55 countries by early next year. The idea, adopted by the African Union in 2012, is to create a single market which includes the free movement of goods, services and people. The integrated African market covers 1.2 billion people and a combined GDP of over USD$3.5 trillion.Link

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Banking, Trade, and the Making of a Dominant Currency

Banking, Trade, and the Making of a Dominant Currency. Gita Gopinath, Jeremy Stein, November 11, 2017, Paper, “We explore the interplay between trade invoicing patterns and the pricing of safe assets in different currencies. Our theory highlights the following points: 1) a currency’s role as a unit of account for invoicing decisions is complementary to its role as a safe store of value; 2) this complementarity can lead to the emergence of a single dominant currency in trade invoicing and global banking, even when multiple large candidate countries share similar economic fundamentals; 3) firms in emerging-market countries endogenously take on currency mismatches by borrowing in the dominant currency; 4) the expected return on dominantcurrency safe assets is lower than that on similarly safe assets denominated in other currencies, thereby bestowing an “exorbitant privilege” on the dominant currency. the theory thus provides a unified explanation for why a dominant currency is so heavily used in both trade invoicing and in global finance.Link

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Global Trade and the Dollar

Global Trade and the Dollar. Gita Gopinath, November 2017, Paper, “We document that the U.S. dollar exchange rate drives global trade prices and volumes. Using a newly constructed data set of bilateral price and volume indices for more than 2,500 country pairs, we establish the following facts: 1) the dollar exchange rate quantitatively dominates the bilateral exchange rate in price pass-through and trade elasticity regressions. U.S. monetary policy induced dollar fluctuations have high pass-through into bilateral import prices. 2) Bilateral noncommodities terms of trade are essentially uncorrelated with bilateral exchange rates. 3) Œe strength of the U.S. dollar is a key predictor of rest-of-world aggregate trade volume and consumer/producer price inflation.” Link

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Lessons Learned from Cap-and-Trade Experience

Lessons Learned from Cap-and-Trade Experience. Robert Stavins, 2017, Paper, “Article 6 of the Paris Agreement provides for cooperation among Parties to meet their collective GHG emissions-reduction targets, including through linkage. The simplest way for this to occur is by linking cap-and-trade systems, although linkage of heterogeneous policies, including carbon taxes and performance standards, is also possible in principle.1 Linkages between well-designed national (or subnational) cap-and-trade systems can lower global mitigation costs and improve the functioning of national markets.Link

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The Political Economy of Carbon Pricing Policy Design

The Political Economy of Carbon Pricing Policy Design. Joseph Aldy, October 2017, Paper, “The goal of the Harvard Project on Climate Agreements, which was established in 2007, is to identify and advance scientifically sound, economically sensible, and politically pragmatic public policy options for addressing global climate change. Drawing upon leading thinkers from around the world, the Project conducts research on policy architecture, key design elements, and institutional dimensions of international and domestic climate-change policy. The Project is directed by Robert N. Stavins, A. J. Meyer Professor of Energy and Economic Development, Harvard Kennedy School. For more information, see the Project’s website…Link

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China’s Export Restrictions and the Limits of WTO Law

China’s Export Restrictions and the Limits of WTO Law. Mark Wu, October 2017, Paper, “In recent years, China has enacted export restrictions on a range of minerals and other raw materials. They include export quotas, export duties, export licenses, and other administrative actions. Although such export restrictions have already been found to be inconsistent with China’s WTO obligations, the practice persists. This article advances an explanation for why this is the case. It argues that the problem lies with the lack of retrospective remedies in WTO dispute settlement. Consequently, China is able to breach its WTO obligations temporarily with minimal consequence. Although such restrictions may have negative consequences for upstream extraction firms, China is able to implement the restrictions because several upstream firms are state-owned enterprises.” Link

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Rethinking Macroeconomic Policy: International Economy Issues

Rethinking Macroeconomic Policy: International Economy Issues. Gita Gopinath, October 10, 2017, Paper, “In this paper I make the following ten remarks on the topics of exchange rate policy, capital flow management, protectionism, and global cooperation: 1) The gains to exchange rate flexibility are worse than you think; 2) The ‘Trilemma’ lives on; 3) The U.S. dollar exchange rate drives global trade prices and volumes; 4) Gross capital flows matter as much as net flows, and global banks have internationalized U.S. monetary policy. 5) Emerging markets tilt away from foreign currency to local currency debt reduces their exposure to global risk factors; 6) Low interest rate environments can lead to misallocation of resources and lower productivity; 7) The relationship between global imbalances, reserve accumulation, and currency manipulation is not well identified. 8) Uniform border taxes are not neutral; 9) Trade is not the main driver of earnings inequality, but at the same time policy has failed to address its redistributive consequences. 10) Global coordination of financial regulation is essential alongside country level macroprudential polices. Reserve accumulation and currency swap lines do not substitute for the lender of last resort role of the IMF.” Link

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Directions for International Tax Reform:, Hearing Before the U.S. Senate Committee on Finance, Hearing on International Tax Reform

Directions for International Tax Reform:, Hearing Before the U.S. Senate Committee on Finance, Hearing on International Tax Reform. Stephen Shay, October 3, 2017, Paper, “Testimony before the U.S. Senate Committee on Finance Hearing on International Tax Reform, October 3, 2017. Objectives for Tax Reform. Tax reform should maintain or enhance our tax system’s current level of progressivity in distributing tax burdens and benefits. The most significant social welfare fact today is that the income of middle and lower income workers has stagnated in recent decades and a disproportionate share of income growth has accrued to those with highest incomes—the top 1%. While we have recovered from the recession and middle and lower income workers have made some gains, the disparity between high-income and middle- and lower-income has grown substantially and income mobility is more constrained than for prior generations. The taxation of cross-border income of U.S. MNCs should be analyzed under the same fairness standards that apply to any other income.Link

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The Social Implications of Sugar: Living Costs, Real Incomes and Inequality in Jamaica c1774

The Social Implications of Sugar: Living Costs, Real Incomes and Inequality in Jamaica c1774. Jeffery Williamson, October 2017, Paper, “This paper provides the first quantitative assessment of Jamaican standards of living and income inequality around 1774. To this purpose we compute welfare ratios for a range of occupations and build a social table. We find that the slave colony had extremely high living costs, which rose steeply during the American War of Independence, and low standards of living, particularly for its enslaved population. Our results also show that due to its extreme poverty surrounding extreme wealth Jamaica was the most unequal place in the pre-modern world. Furthermore, all of these characteristics applied to the free population alone.Link

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