a column by Carlo Altomonte, Laura Bonacorsi and Italo Colantone for VOX: CEPR’s Policy Portal
Amid Brexit and protectionist moves by President Trump, many observers are warning about the negative effects that a rise in trade barriers could have on growth.
This column first highlights the important role acquired by deep-water ports as main hubs for trade during 1995-2007 and how they have allowed countries to gain from trade.
It then shows that becoming embedded in global value chains is a powerful determinant of growth, even if it implies that a growing share of gross exports represents value added that has been produced in foreign countries.
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Showing posts with label GVCs. Show all posts
Showing posts with label GVCs. Show all posts
Tuesday, 19 February 2019
Saturday, 5 May 2018
The natural geography of regional trade agreements and why it is changing over time
a column by Lionel Fontagné and Gianluca Santoni for VOX: CEPR’s Policy Portal
Country-pairs self-select in regional trade agreements, and this endogeneity biases the estimation of the impact of such agreements within a gravity framework. This column uses a framework for predicting which countries should engage in RTAs based solely on economic determinants, including global value chains, and compares this ‘natural’ geography of agreements with the actual geography. The results suggest that the endogenous geography of RTAs is shaped by the development of GVCs.
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Country-pairs self-select in regional trade agreements, and this endogeneity biases the estimation of the impact of such agreements within a gravity framework. This column uses a framework for predicting which countries should engage in RTAs based solely on economic determinants, including global value chains, and compares this ‘natural’ geography of agreements with the actual geography. The results suggest that the endogenous geography of RTAs is shaped by the development of GVCs.
Continue reading
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