{"title":"Capital controls and firm performance","authors":"Eugenia Andreasen , Sofía Bauducco , Evangelina Dardati","doi":"10.1016/j.jinteco.2024.103897","DOIUrl":"10.1016/j.jinteco.2024.103897","url":null,"abstract":"<div><p>This paper studies the differential effects of capital controls (CCs) on firms’ performance depending on the firm’s production technology and export status. We empirically characterize the firm’s responses to the introduction of a CC using the Chilean encaje implemented between 1991 and 1998. Motivated by the empirical insights, we build a general equilibrium model with heterogeneous firms, financial constraints and international trade and calibrate it to the Chilean economy. We find that CCs have heterogeneous effects on firms. Exporting firms operating in more capital-intensive sectors are more negatively affected than exporting firms operating in less capital-intensive sectors. Non-exporting firms in capital-intensive sectors experience more negative effects on capital than firms in less-capital intensive sectors, but the opposite is true for domestic sales. These results are a consequence of the increase in financing costs, the depreciation of the real exchange rate, and compositional effects on the mass of exporters and non-exporters.</p></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"150 ","pages":"Article 103897"},"PeriodicalIF":3.3,"publicationDate":"2024-02-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139920462","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"A theory of economic sanctions as terms-of-trade manipulation","authors":"John Sturm Becko","doi":"10.1016/j.jinteco.2024.103898","DOIUrl":"https://doi.org/10.1016/j.jinteco.2024.103898","url":null,"abstract":"<div><p>How can a country design economic sanctions to maximize their economic cost to the sanctioned country at the lowest cost to the sanctioner? I consider this problem from the perspective of international trade and draw a close connection between trade restrictions as economic sanctions and trade restrictions as terms-of-trade manipulation. This connection has useful implications for the design of trade taxes as sanctions: Small sanctions increase welfare in the sanctioning country. Sanctions target the same goods as terms-of-trade manipulation. Sanctions ignore elasticities of demand and supply in the sanctioning country.</p></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"150 ","pages":"Article 103898"},"PeriodicalIF":3.3,"publicationDate":"2024-02-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139732774","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Opening up in the 21st century: A quantitative accounting of Chinese export growth","authors":"Loren Brandt, Kevin Lim","doi":"10.1016/j.jinteco.2024.103895","DOIUrl":"https://doi.org/10.1016/j.jinteco.2024.103895","url":null,"abstract":"<div><p>China’s rapid export growth has spurred extensive research investigating its effects on other economies. The exact causes of the boom as well as the slowdown in Chinese exporting after 2007 are less well-understood. We quantify the drivers of Chinese export growth using a general equilibrium model estimated with detailed trade and production data that capture rich heterogeneity across destinations, firm ownership types, production locations, and sectors. We find that the three key drivers of Chinese export growth overall are rising foreign demand, improvements in access to imported intermediates, and factor productivity growth within China. Weakening foreign demand and a lack of further improvements in imported inputs access largely explain the slowdown in exporting after 2007. Furthermore, important differences especially across sectors and firms of different ownership types caution against any single narrative.</p></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"150 ","pages":"Article 103895"},"PeriodicalIF":3.3,"publicationDate":"2024-02-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0022199624000199/pdfft?md5=5d2f5defbded0fad8a692032079fff31&pid=1-s2.0-S0022199624000199-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139732773","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The international dimension of trend inflation","authors":"Guido Ascari , Luca Fosso","doi":"10.1016/j.jinteco.2024.103896","DOIUrl":"https://doi.org/10.1016/j.jinteco.2024.103896","url":null,"abstract":"<div><p>A trend-cycle BVAR decomposition investigates the role of different slow-moving trends – i.e., globalization, expectations, automation, labor demand and supply – in shaping the slow-moving dynamics of trend inflation. Despite well-anchored expectations, slow-moving imported “cost-push” factors induced disinflationary pressure keeping trend inflation below target. The cycle block provides evidence of inflation volatility increasingly driven by international factors. These results can explain why, from 2000 in the U.S. and before the recent surge, inflation remained both below target and silent to domestic slack.</p></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"148 ","pages":"Article 103896"},"PeriodicalIF":3.3,"publicationDate":"2024-02-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0022199624000205/pdfft?md5=c3b039a6a4b0e494f573d0b352d0920e&pid=1-s2.0-S0022199624000205-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139718342","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Sudden Stops and optimal policy in a two-agent economy","authors":"Nina Biljanovska , Alexandros P. Vardoulakis","doi":"10.1016/j.jinteco.2024.103894","DOIUrl":"10.1016/j.jinteco.2024.103894","url":null,"abstract":"<div><p>We introduce heterogeneity between workers and entrepreneurs in a standard Fisherian model to study Sudden Stop dynamics and optimal policy. The distinction between workers and entrepreneurs introduces a redistributive motive that meaningfully interacts with Fisherian deflation. While in tranquil times redistribution is driven by the relative marginal utilities of consumption, the planner additionally favors entrepreneurs during Sudden Stops to mitigate Fisherian deflation. We show how heterogeneity adds to the understanding of how ex ante and ex post policies can be best designed to alleviate the negative effects of Sudden Stops.</p></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"148 ","pages":"Article 103894"},"PeriodicalIF":3.3,"publicationDate":"2024-02-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139678384","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Sovereign debt crises and low interest rates","authors":"Gaetano Bloise , Yiannis Vailakis","doi":"10.1016/j.jinteco.2024.103893","DOIUrl":"https://doi.org/10.1016/j.jinteco.2024.103893","url":null,"abstract":"<div><p>We revisit the occurrence of self-fulfilling crises in sovereign debt markets under time-varying interest rates and growth in Eaton and Gersovitz (1981)’s model. We show that, when long-term interest rates exceed growth, insolvency is solely caused by the exhaustion of the sovereign’s debt repayment capacity subject to limited commitment. Indeed, high interest rates impose discipline on market sentiments, because creditors necessarily become more optimistic about solvency when the sovereign reduces debt exposure. Creditors’ beliefs respond instead ambiguously under low interest rates fluctuating around growth. As long as interest rates exceed growth, debt reduction alleviates the fiscal burden. However, the sovereign also benefits from the prospect of rolling over outstanding debt as long as interest rates remain below growth. Thus, creditors’ sentiments might adjust adversely to fiscal consolidation. When the default punishment is not disproportionately severe, this mechanism sustains belief-driven debt crises even when fundamentals would otherwise ensure solvency.</p></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"150 ","pages":"Article 103893"},"PeriodicalIF":3.3,"publicationDate":"2024-02-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0022199624000175/pdfft?md5=1880bd5418bb4e05bb69dbd47b4fefd2&pid=1-s2.0-S0022199624000175-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139732772","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Offshoring and job polarisation between firms","authors":"Hartmut Egger , Udo Kreickemeier , Christoph Moser , Jens Wrona","doi":"10.1016/j.jinteco.2024.103892","DOIUrl":"10.1016/j.jinteco.2024.103892","url":null,"abstract":"<div><p>Using linked employer–employee data for Germany, we provide evidence for job polarisation between firms and identify offshoring as an important determinant of these employment changes. To accommodate these findings, we set up a model in which offshoring to a low-wage country can lead to job polarisation in the high-wage country due to a reallocation of labour across firms that differ in productivity and pay wages that are positively linked to their profits. Offshoring is chosen only by the most productive firms, and only for those tasks with the lowest variable offshoring costs. A reduction in those variable costs increases offshoring at the intensive and at the extensive margin. Well in line with our evidence, this causes domestic employment shifts from the newly offshoring firms in the middle of the productivity distribution to firms at the tails of this distribution, paying either very low or very high wages.</p></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"148 ","pages":"Article 103892"},"PeriodicalIF":3.3,"publicationDate":"2024-01-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0022199624000163/pdfft?md5=5329895222dc60571330126d7370f891&pid=1-s2.0-S0022199624000163-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139646435","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The internal geography of firms","authors":"Dominick Bartelme , Oren Ziv","doi":"10.1016/j.jinteco.2024.103889","DOIUrl":"10.1016/j.jinteco.2024.103889","url":null,"abstract":"<div><p>We document that plants belonging to small and mid-sized firms are geographically concentrated, while large firms are much more dispersed. These differences are sizable; firms with 2 plants have a dispersion that is 5 log points lower than predicted by industry location patterns, while the corresponding figure is less than 2 log points for firms with 40 plants and less than a half log point for firms with 100 or more plants. These patterns are qualitatively robust across industries, time periods, and alternative specifications. We also find that plants that are farther from the firm headquarters employ less workers than closer plants within the same firm, and that this relationship is attenuated in large firms. We interpret these findings through the lens of a model of plant location in which more productive firms endogenously choose to lower their cost of geographic expansion.</p></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"148 ","pages":"Article 103889"},"PeriodicalIF":3.3,"publicationDate":"2024-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139514774","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Did Trump’s trade war impact the 2018 election?","authors":"Emily J. Blanchard , Chad P. Bown , Davin Chor","doi":"10.1016/j.jinteco.2024.103891","DOIUrl":"10.1016/j.jinteco.2024.103891","url":null,"abstract":"<div><p>We uncover evidence that the US–China trade war was consequential for voting outcomes in the 2018 congressional midterm election. Republican House candidates lost support in counties more exposed to tariff retaliation, but saw no appreciable gains in counties that received more direct US tariff protection. The electoral losses were only modestly mitigated by the US agricultural subsidies announced in summer 2018. Republicans also fared worse in counties that had seen recent gains in health insurance coverage (where efforts to repeal the Affordable Care Act may have been more consequential), and where a new federal cap on state and local tax (SALT) deductions disadvantaged more taxpayers. Counterfactual calculations suggest that Republicans would have lost ten fewer House seats absent the trade war, in a similar range to either health care or SALT policies in the number of lost seats it can account for.</p></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"148 ","pages":"Article 103891"},"PeriodicalIF":3.3,"publicationDate":"2024-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139517118","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Sudden stop with local currency debt","authors":"Siming Liu , Chang Ma , Hewei Shen","doi":"10.1016/j.jinteco.2024.103888","DOIUrl":"https://doi.org/10.1016/j.jinteco.2024.103888","url":null,"abstract":"<div><p>Over the past two decades, emerging market economies have improved their liability structures by increasing the share of their debt denominated in local currency. This paper introduces a local currency debt (i.e., in units of aggregate consumption) into a sudden stop model and explores how this alternative structure sheds new perspectives on financial regulations. Decentralized agents do not internalize the effects of their portfolio decisions on financial amplification and undervalue the insurance benefit of using local currency debt. However, due to debt-deflation incentives and the cost of buying insurance, a discretionary planner is reluctant to issue local currency debts, and capital controls are primarily used to restrict credit volumes. In contrast, a social planner with commitment would promise a higher future payoff to obtain a more favorable bond price. The capital control under commitment encourages borrowing in local currency, mitigates the severity of crises, and improves welfare relative to laissez-faire.</p></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"148 ","pages":"Article 103888"},"PeriodicalIF":3.3,"publicationDate":"2024-01-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139503935","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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