Trade Costs and Current Accounts

Nedoncelle, Clément

Document type :

Compte-rendu et recension critique d'ouvrage

DOI :

10.1111/twec.12318

Title :

Trade Costs and Current Accounts

Author(s) :

Nedoncelle, Clément [Auteur]
Lille économie management - UMR 9221 [LEM]

Journal title :

The World Economy

Pages :

1653--1672

Publication date :

2015-09

English keyword(s) :

trade cost reductions
account imbalances
production patterns

HAL domain(s) :

Sciences de l'Homme et Société/Economies et finances

English abstract : [en]

Are trade cost reductions a plausible explanation for growing global current account imbalances? I advocate that changes in trade costs affect trade and production structures, which is likely to affect national savings and ...
Show more >Are trade cost reductions a plausible explanation for growing global current account imbalances? I advocate that changes in trade costs affect trade and production structures, which is likely to affect national savings and investment. Explicitly adding trade costs à la Markusen and Venables into Jin's framework, this augmented model predicts that trade cost reductions affect the current account through changes in the industrial structure. Empirical evidence confirms that the interaction of trade costs and capital intensity drives current account balances. I also provide evidence that the response of current accounts to changes in trade costs depends on the capital intensity of production and on the depth of regional agreements on trade and factor mobility. Aside from the direct effect generally emphasised in standard macro-level analysis, changes in production patterns could therefore be an additional channel of impact of regional integration on current accounts.Show less >

Language :

Anglais

Popular science :

Non

Collections :