World Economics

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Global Trade Data
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World Economics, December 2019
There are serious problems with official trade statistics since according to the IMF in 2016 the world imported US$339 billion more than it exported. The Ricardian concept of comparative advantage in final goods is no longer fully relevant to explain trade between countries and the solution is to operate a paradigm shift in the packaging and interpretation of trade data. The accuracy and reliability of data is affected by a number of key biases separate from data quality issues and misreporting. The main problems are trade data asymmetries; the Rotterdam Effect and the impact of global value chains. Until this happens international trade statistics will be used as evidence of global trade imbalances and form the basis of potentially misguided policies aimed at their correction.
Risk Exposures in International and Sectoral Balance Sheet Data
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Philip R. Lane, World Economics, December 2015
This paper outlines the opportunities and pitfalls for risk analysts in interpreting the information embedded in international and sectoral balance sheets. It places an emphasis on the different risks posed by net financial stock imbalances and the cross-holding of large stocks of gross financial assets and gross financial liabilities. It argues that it is important to supplement sectoral-level data with more disaggregated levels of data, in view of the importance of intra-sectoral financial linkages and the heterogeneity in portfolios and funding mechanisms within sectors. Finally, the growing internationalisation of financial balance sheets means that it is important to take a unified approach to the joint analysis of international and sectoral balance sheets.
Global Value Chains, International Trade Statistics and Policymaking in a Flattening World
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Alejandro Jara & Hubert Escaith, World Economics, December 2012
The raise of global production networks since the 1980s changed the way we understand international trade and has profound repercussions on development policies and the conduct of global governance. New comparative advantages allow large developing countries to leap-frog through their industrialization process while smaller economies without large internal market or mining resources are now able to build an industrial base. Offshoring also gave the possibility to firms from industrialised countries to remain competitive in front of fast-expanding firms from emerging countries. But in the process, the relative demand for low and medium skilled workers in industrialised countries contracted, and this employment and income effect became a political issue and fuelled demand for protectionism. Unfortunately, the debate lacks accurate data as traditional statistics give only a blurred picture of what is known as ‘trade in tasks’. Before revising the trade and governance implications, the article calls for a new measurement of international trade based on its value-added content in order to have a better understanding of the actual issues.
Editorial: Official Trade Data: Still Fit for Purpose?
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World Economics, December 2012
There is no summary available for this paper.
Why is the Chinese Saving Rate so High?
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Guonan Ma & Wang Yi, World Economics, March 2011
China’s saving rate is high from many perspectives – historical experience, international standards and model predictions. Furthermore, the average saving rate has been rising over time, with much of the increase taking place in the 2000s. What sets China apart from the rest of the world is that its rising aggregate saving has reflected high savings rates in all three sectors: corporate, household and government. Our evidence casts doubt on the proposition that distortions and subsidies account for China’s high saving rate. Instead, we argue that tough corporate restructuring (including pension and home ownership reforms), a marked Lewismodel transformation process (where the average wage exceeds the marginal product of labour in the subsistence sector) and rapid ageing process have all played more important roles. Such structural factors suggest that the Chinese saving rate may peak over the coming years.

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