Trade disputes and macroeconomics

sizzledlickforkManagement

Oct 28, 2013 (3 years and 9 months ago)

69 views

JONG
-
EUN LEE


OECD,

Economi c Department



(
SEJONG UNIVERSITY,
Seoul,
KOREA
)

Trade disputes and
M
acroeconomics

Questions I want to answer


Macroeconomic factors matter in initiation of Trade
Disputes?



Protectionism vs. case
-
specific reason


High/Middle/Low income countries


World vs. national variables




Why is it interesting?


Provide a useful policy perspectives


(
not dragged by cliché

or bored with theories)




Deeper understanding for trade disputes



Coverage



History


Great Depression/ Smoot
-
Hawley Tariff Act


1970s oil crisis/creeping protectionism


1980s Argentina


Asian Financial Crisis


Democrat and Republican


Financial crisis in 2008/ tariff, anti
-
dumping,
subsidies and bailout packages


Time to re
-
embrace globalism

WTO Dispute Settlement Mechanism


Fairness and Enforcement


Two tiers


Sub
-
Saharan countries

High income


Middle income


Low income


Complainant countries

Total number

of

I
nitiations

Antigua and Barbuda[1],Australia[7],

Canada[29], Czech Republic[1],

EC[79],Hong Kong, China[1],

Hungary[5],Japan[13],Korea[13],

New Zealand[7],Norway[3],Singapore[1],

Switzerland[4],Chinese Taipei[3],

United States[90]

[257]

Argentina[14],Brazil[24],Chile[11],

Costa Rica[4],Malaysia[1], Mexico[19],

Panama[5],

Poland[3], Turkey[2],Uruguay[1],

Venezuela[1]

[85]

Bangladesh[1],China[3],Colombia[4],

Ecuador[3],Guatemala[6], Honduras[6],

India[18],Indonesia[4],

Nicaragua[1],Pakistan[3],Peru[2],Philippines[5],

Sri Lanka[1],Thailand[13]

[68]

International Macroeconomic Theory


The Mundell Fleming Model


The Dornbusch
-
Fischer Model


Computable General Equilibrium


Dynamic Stochastic General Equilibrium


-

New Keynesian DSGE


-

Real Business Cycle



Previous studies


Grossman and Helpman(1994): political
equilibrium where elected gov’t and interest
groups interact in trade policy
-
making


Gawande and Bandyopadhyay(2000)


Jallab(2007): Anti
-
dumping cases with industry
specific variables. Probit


Mah and Kim(2006)


Jensen(2007)


0
10
20
30
40
50
60
Number of trade dispute
initiations

0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
OECD
Real GDP Growth%

2

7

8

8

10

12

6

11

9

15

13

13

6

18

7

10

12

8

6

4

6

11

3

14

10

5

5

3

12

6

9

10

7

10

5

4

4

3

3

9

5

4

1

2

7

5

2

6

5

3

5

0

6

2

1995q1
1995q3
1996q1
1996q3
1997q1
1997q3
1998q1
1998q3
1999q1
1999q3
2000q1
2000q3
2001q1
2001q3
2002q1
2002q3
2003q1
2003q3
2004q1
2004q3
2005q1
2005q3
2006q1
2006q3
2007q1
2007q3
2008q1
Number of
trade dispute initiations

-0.2
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
OECD Real
GDP growth%

Probit


Conclusion


Macroeconomic environments matter.



High/Middle/Low show different patterns



Nation
-
wide macro variables more significant than
world
-
wide macro variables.