Adjustment Costs and Trade Liberalization PDF Download
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Languages : en
Pages : 0
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Languages : en
Pages : 0
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Author: Elin Baldárrago
Publisher: International Monetary Fund
ISBN: 1475585934
Category : Business & Economics
Languages : en
Pages : 26
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Book Description
While trade integration has been an engine of global growth and prosperity, as suggested by theory, some sectors have been negatively affected by increased import competition. We test if this negative effect is significant in a context of high intranational migration, as theory indicates that labor mobility could reduce it. We focus on the 2004-14 period of trade liberalization in Peru (a major beneficiary of trade integration), which allows for methodological improvements relative to similar studies. We find that districts competing with liberalized imports experienced significantly lower growth in consumption per capita despite some emigration in response to increased import competition. This underscores the need to support the “losers of trade liberalization” even amidst high labor mobility.
Author: Steven J. Matusz
Publisher:
ISBN:
Category :
Languages : en
Pages : 60
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A survey of more than 50 empirical papers shows that the adjustment costs of trade liberalization are small relative to the benefits. Moreover, manufacturing employment typically increases with trade liberalization. The limited data suggest that trade liberalization reduces poverty.Virtually all of the studies that quantify the adjustment costs of trade liberalization relative to the benefits point to the conclusion that adjustment costs are small in relation to the benefits of trade liberalization.The explanation for low adjustment costs is that: These costs are typically short term and end when workers find a job, but the benefits grow as the economy does. Unemployment doesn't last long, especially where workers' pay was not substantial in the original job. Normal labor turnover often exceeds job displacement from trade liberalization.Moreover, studies that examine the impact of trade liberalization on employment in developing countries find there is little decline - and usually an increase - in manufacturing employment in developing countries a year after trade liberalization, for three reasons: Developing countries tend to have comparative advantage in labor-intensive industries, and trade liberalization tends to favor labor. Interindustry shifts occur after trade liberalization, which minimizes the dislocation of factors of production. In many industries normal labor turnover exceeds dislocation from trade liberalization, so downsizing, when necessary, can be accomplished without much forced unemployment. Matusz and Tarr recommend a uniform tariff to minimize special-interest lobbying for protection since it diffuses the benefits of protection.This paper - a product of Trade, Development Research Group - is part of larger effort in the group to examine how trade liberalization affects growth and poverty reduction. David Tarr may be contacted at dtarr @worldbank.org.
Author: Abeer Mohamed Elshennawy
Publisher:
ISBN:
Category :
Languages : en
Pages : 328
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Author: Steven Joseph Matusz
Publisher: World Bank Publications
ISBN:
Category : Comercio - Paises en desarrollo
Languages : en
Pages : 63
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A survey of more than 50 empirical papers shows that the adjustment costs of trade liberalization are small relative to the benefits. Moreover, manufacturing employment typically increases with trade liberalization. The limited data suggests that trade liberalization reduces poverty.
Author: Eric W. Bond
Publisher:
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Category :
Languages : en
Pages : 0
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A common feature of trade agreements between countries is that the integration of markets proceeds in stages. This paper examines conceptually the role played by adjustment costs in determining the best way to structure an agreement between two countries when there are multiple sectors to be liberalized. Adjustment costs to liberalization of industries might influence the timing of liberalization, with the analysis bearing similarity to why tariff reductions tend to be phased in over time. When two industries have no spillover effects, trade agreements with sequential liberalization will be less costly to sustain. However, if the liberalization of one industry influences permanently the flow of benefits from liberalizing the other industry, simultaneous liberalization may be easier to sustain.
Author: Marc Bacchetta
Publisher:
ISBN:
Category : Commercial policy
Languages : en
Pages : 76
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Book Description
This publication identifies tools at the disposal of governments to smooth adjustment, to minimize an economy's adjustment costs and to alleviate the burden of those who suffer most.--Publisher's description.
Author: Akhmed Akhmedov
Publisher:
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Category :
Languages : en
Pages :
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Book Description
The paper investigates adjustment costs of trade liberalization in Russia by estimating various labor market elasticities with respect to indicators of trade liberalization in the 90-ies. In particular, the influence of tariff reduction on demand for labor is estimated, inter-sectoral employment flows in recent years and their determinants are studied, as well as determinants of sectoral wage premiums and of wage differentials between skilled and unskilled labor. The estimated elasticities of labor demand and wages show to be of very moderate size implying a modest adjustment cost in the labor market.
Author: Basudeb Biswus
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ISBN:
Category : Dairy products industry
Languages : en
Pages : 10
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Author: Michael Mussa
Publisher:
ISBN:
Category : Commercial policy
Languages : en
Pages : 118
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Book Description
This paper examines the appropriate time path of the tariff rate for a small open economy that has decided to move from protection of import competing industries to free trade. Adjustment costs for moving resources to alternative uses do not provide a rationale for gradual adjustment of the tariff rate because in the absence of distortions, rational optimizing agents will make socially appropriate investment decisions with respect to adjustment when they are qiven correct price signals. Some distortions of the adjustment process imply the desirability of gradual adjustment of the tariff rate to slow adjustment, but other distortions imply the desirability of subsidizing imports in the short run in order to speed movement of resources out of previously protected industries. Concern with the income redistribution effects of reductions in the tariff rate(which usually injure owners of factors in previously protected industries) does provide a general rationale for a gradual move to free trade. The influence of the unemployment consequences of tariff reduction on the appropriate path of commercial policy depends on the nature and shape of the respone of the rate of resource reallocation to the level of unemployment in previously protected industries.
