Neighborhood effects in economic growth

One of the most striking features of the world economy is that wealthy countries are clustered together. This paper theoretically and empirically explains a mechanism for this clustering by extending the Acemoglu and Ventura model so that it takes real geography into account. Countries close to fast growing economies experience faster growth in aggregate demand for their exports, stimulating faster domestic growth. As a result, a poor country that is surrounded by other poor countries finds it more difficult to grow because its terms of trade shift against it. When this model is estimated on data for 1965 to 1985, we find statistically and economically significant effects. If the typical European country were located in Africa, these terms of trade effects would have lowered its growth rate by almost 1 percentage point per year. The results strongly suggest that it is very difficult to raise income in poor countries without dealing with regional problems. [resumen de autor

The effect of foreign service on trade volumes and trade partners

It has been emphasized that international promotion activities such as state visits or the presence of embassies, consulates and export promotion agencies help foster trade when there are search costs and/or uncertainty. In this paper we try to disentangle the differential effect that foreign service (embassies and consulates) has on both the establishment of trade links with countries, and the effect on trade volumes with already existing trading partners (the extensive and intensive margins at the country level). Using the estimation procedure suggested by Helpman, Melitz and Rubinstein (2007) and a cross-section of 21 exporters and 162 importers as in Rose (2005), we find that the presence of a foreign service office in a given country increases the probability of trading with that partner between 11% and 18%, but that it has no effect on the volume of trade with already existing trading partners. We then proceed to evaluate the importance of the extensive margin at the sectoral level, finding that these probabilities are substantially larger for more differentiated sector

Proximidad, comercio internacional y crecimiento económico

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Uncertainty and entry into export markets

It has been emphasized that international promotion activities such as state visits or the presence of embassies, consulates and export promotion agencies help foster trade when there are search costs and/or uncertainty. In this paper we try to disentangle the differential effect that foreign service (embassies and consulates) has on both the establishment of trade links with countries, and the effect on trade volumes with already existing trading partners (the extensive and intensive margins at the country level). Using the estimation procedure suggested by Helpman, Melitz and Rubinstein (2007) and a cross-section of 21 exporters and 162 importers as in Rose (2005), we find that the presence of a foreign service office in a given country increases the probability of trading with that partner between 11% and 18%, but that it has no effect on the volume of trade with already existing trading partners. We then proceed to evaluate the importance of the extensive margin at the sectoral level, finding that these probabilities are substantially larger for more differentiated sector

The wise use of dummies in gravity models : export potentials in the Euromed region

In this paper, we estimate a gravity equation properly accounting for omitted exporter and importer’s overall trade resistance, through country yearly dummies for exporter and importer countries. We find that the omission of time varying multilateral trade resistance terms in the estimation of a gravity equation introduces important biases in the results, although correcting them means we can only compute differences between actual and predicted export shares, instead of levels, as usually done. An application to the calculation of trade potentials in the Euromed region (Southern and Eastern Mediterranean countries) shows that the omission of time varying multilateral trade resistance terms greatly influences the computation of export potentials as well as the estimated effect of signing a free trade agreement. Overall, we find that, except for Algeria, Jordan and Lebanon, Euromed countries’ share of exports to the EU as a whole is at, or slightly above, those predicted by a correctly specified gravity model, although the share of exports to some individual EU countries is significantly below the predictions of the gravity model. Except for those three countries, we find significant opportunities for export growth to the US, instea

International recycling of petrodollars

The continued rise in oil prices since 2002 has resulted in a significant increase in export revenue for oil exporting countries. This increase in the price of oil and other commodities means that OPEC countries and Russia have received, between 2003 and 2006, a windfall of 1.3 trillon dollars with respect to their export level in 2002. This paper analyzes, using the limited data avalaible, the recycling of these resources back to the world economy through the trade channel, via higher imports, or the financial channel, via an increase in the net external asset position of these countries. Our results show that around 50 % of the windfall revenue has been used to increase imports, while the rest has been directed towards international reserva accumulation and other improvements in the net asset position of these countries. Comparing the current oil price increase with previous ones, such as those resulting from the tightening of oil supply in the 70's, we find that the trade channel has been more important in the current episode than in previous ones. This can be attributed to (i)the perception of a more permanent increase in the price of oil in the context of rising demand, and (ii)the gradualism of the current oil price increase, wich has allowed a stronger response from imports. [resumen de autor

Trade patterns, trade balances and idiosyncratic shocks

International Macroeconomics has long sought an explanation for current account fluctuations that matches the data. The approaches have typically focused on better models and new macroeconomic variables. We demonstrate the limitations of this approach by showing that idiosyncratic shocks are an important cause of macroeconomic volatility even for large countries. When explaining these fluctuations, standard macroeconomic models generally assume that firms are small and that their microeconomic shocks cancel out. We show that the high degree of concentration of bilateral trade flows means that idiosyncratic shocks can have a significant impact on aggregate economic fluctuations. We theoretically develop a descomposition components. Taking the model to data on bilateral trade flows from 1970 to 1997, we find that the most comprehensive macroeconomic model can only account for at most half of the observed variance in trade account volumes of each country. Thus, this paper highlights the importance of considering disaggregated data when modeling the current accoun

Mapa de exposición internacional de la economía española

Este estudio analiza los niveles de interdependencia y riesgo que se dan en las relaciones económicas entre España y un gran número de países. Para ello se utilizan datos bilaterales sobre vínculos comerciales y financieros de España con el resto del mundo para construir, mediante el análisis de componentes principales, un índice de interdependencia de España con cada país. Asimismo, la agregación mediante la misma técnica de diversas medidas de riesgo, como las calificaciones crediticias soberanas y otras más genéricas, permite construir un índice de riesgo para cada país. Combinando la información de ambos índices, se encuentra que las mayores interdependencias de la economía española se dan con países asociados a niveles reducidos de riesgo (esencialmente países de la OCDE), mientras que las principales interdependencias asociadas a niveles intermedios de riesgo se dan en relación a países de América Latina y países exportadores de productos energético

Canales de reciclaje internacional de los petrodólares

La subida del precio del crudo desde 2002 ha conllevado un significativo aumento de los ingresos en los países exportadores de petróleo. Así, los países de la OPEP y Rusia recibieron entre 2003 y 2006, unos 1,3 billones de dólares adicionales respecto a su nivel de exportaciones en el año 2002 gracias al aumento del precio del crudo y del resto de materias primas. Este documento analiza, a la luz de los escasos datos disponibles, el reciclaje de estos recursos hacia la economía mundial a través de dos canales: el comercial, vía mayores importaciones, y el financiero, a través de un aumento de los activos netos de estos países en el resto del mundo. Nuestros resultados indican que, aproximadamente, el 50% de los recursos adicionales por exportaciones se han destinado a un aumento de las importaciones y el resto se ha destinado a la acumulación de reservas internacionales y otras mejoras de los activos netos de estos países. Comparando este episodio con otros de subida del precio del petróleo como, por ejemplo, los resultantes de la restricción de oferta que siguió a la formación de la OPEP en los años setenta, encontramos que la importancia del canal comercial ha sido mayor en este episodio que en los anteriores. Esto puede ser atribuido a (i) la percepción de una mayor permanencia de la presente subida en un contexto de demanda creciente, y (ii) el mayor gradualismo con que se ha producido el presente aumento de precio, que habría permitido el aumento escalonado de las importaciones. [resumen de autor

Potenciales de exportación en los países del norte de África y Oriente Próximo

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