{"title":"Networks in trade — Evidence from the legacy of the Hanseatic league","authors":"Max Marczinek , Stephan Maurer , Ferdinand Rauch","doi":"10.1016/j.jinteco.2025.104102","DOIUrl":"10.1016/j.jinteco.2025.104102","url":null,"abstract":"<div><div>We study trade networks following the decline of the Hanseatic League, using a novel trade data set that covers cities and captains in Northern Europe over 190 years. By the time of its dissolution in 1669, trade on former Hansa routes is within predictions from a gravity framework. However, the Hansa continue to shape the composition of trade: Trade between cities in the Hanseatic network continues to be facilitated by Hanseatic captains for centuries. Our paper highlights the long-run stability of commercial and social networks, which persist when other economic effects do not.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"157 ","pages":"Article 104102"},"PeriodicalIF":3.8,"publicationDate":"2025-06-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144240637","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":"The role of currencies in external balance sheets","authors":"Cían Allen , Luciana Juvenal","doi":"10.1016/j.jinteco.2025.104105","DOIUrl":"10.1016/j.jinteco.2025.104105","url":null,"abstract":"<div><div>This paper constructs a dataset on the currency composition of external balance sheets for 50 countries from 1990 to 2020. Our findings reveal the persistent dominance of the US dollar and euro in global external positions, while many emerging markets have shifted from <em>short</em> to <em>long</em> foreign-currency exposures. This transformation, marking a departure from the “original sin” phenomenon, reflects reduced foreign-currency debt liabilities and increased foreign-currency assets. We introduce financial exchange rate indices to measure valuation effects, documenting that substantial wealth transfers across countries mitigated global imbalances during the 2008 financial crisis, yet exacerbated them during the COVID-19 shock.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"157 ","pages":"Article 104105"},"PeriodicalIF":3.8,"publicationDate":"2025-05-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144204764","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":"Low interest rates, capital misallocation and welfare","authors":"Anastasios Dosis","doi":"10.1016/j.jinteco.2025.104096","DOIUrl":"10.1016/j.jinteco.2025.104096","url":null,"abstract":"<div><div>This paper studies how the real interest rate affects the (mis)allocation of capital in a small open economy characterized by asymmetric information in the financial market. Low interest rates allow low-productivity firms to enter the pool of borrowers, imposing an information externality that negatively impacts highly productive firms and forces them to reduce their investments. This suggests that, in some cases, although lowering the interest rate can increase total investment and output, it does not necessarily improve welfare. The results align with recent empirical evidence highlighting the adverse effects of low interest rates in southern European countries.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"157 ","pages":"Article 104096"},"PeriodicalIF":3.8,"publicationDate":"2025-05-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144108028","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":"Overborrowing and systemic externalities in the business cycle under imperfect information","authors":"Juan Herreño , Carlos Rondón-Moreno","doi":"10.1016/j.jinteco.2025.104103","DOIUrl":"10.1016/j.jinteco.2025.104103","url":null,"abstract":"<div><div>We study the interaction between imperfect information and financial frictions and their role in financial crises in small open economies. We use a model where households observe income growth but cannot distinguish whether the underlying income shocks are permanent or transitory, and borrowing is subject to a collateral constraint. We show that the combination of imperfect information and a borrowing constraint is a significant source of economic instability. Optimal macroprudential policy helps stabilize the economy by actively taxing debt. Furthermore, the interaction between the collateral constraint and the information friction reshapes the correlation between the optimal tax and the underlying components of income.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"157 ","pages":"Article 104103"},"PeriodicalIF":3.8,"publicationDate":"2025-05-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144138700","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":"Regional content requirements and market power: Lessons from CUSFTA","authors":"Wanyu Chung , Carlo Perroni","doi":"10.1016/j.jinteco.2025.104097","DOIUrl":"10.1016/j.jinteco.2025.104097","url":null,"abstract":"<div><div>Focusing on the 1989 Canada-United States Free Trade Agreement (CUSFTA), we examine how regional content requirements in Free Trade Areas (FTAs) affect competition and prices in intermediate goods markets. Content requirements in FTAs shelter firms from competition more than an equivalent trade-protection tariff would. We document patterns in US industry-level census data and Canadian product-level export data that align with theoretical predictions: stricter and binding content requirements are linked to higher prices and more firm entry. These results underscore the role of content requirements in shaping market structure and market power, with implications for the choice of preferential trade arrangements.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"157 ","pages":"Article 104097"},"PeriodicalIF":3.8,"publicationDate":"2025-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144147369","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":"Banks’ market capital and the international risk taking channel of US monetary policy","authors":"Stefan Avdjiev , Jose Maria Serena","doi":"10.1016/j.jinteco.2025.104099","DOIUrl":"10.1016/j.jinteco.2025.104099","url":null,"abstract":"<div><div>We demonstrate that banks’ market capital is a key determinant of the strength of the international risk-taking channel of US monetary policy. The impact of US monetary policy on international risk-taking is greater for banks with low market capital. The effect of market capital exists in addition to the previously documented effect of regulatory capital, which works in the opposite direction. As a result, the international risk-taking channel of monetary policy is most powerful for banks that have a combination of high regulatory capital and low market capital.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"157 ","pages":"Article 104099"},"PeriodicalIF":3.8,"publicationDate":"2025-05-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144167167","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":"Why hours worked decline less after technology shocks?","authors":"Olivier Cardi , Romain Restout","doi":"10.1016/j.jinteco.2025.104095","DOIUrl":"10.1016/j.jinteco.2025.104095","url":null,"abstract":"<div><div>The contractionary effect of technology shocks on hours gradually vanishes over time in OECD countries. To rationalize the decline in hours and its disappearance, we use a VAR-based decomposition of technology shocks into symmetric and asymmetric technology improvements. While hours decline dramatically when technology improves at the same rate across sectors, hours significantly increase when technology improvements occur at different rates. Because they are primarily driven by symmetric technology improvements, permanent technology shocks drive down total hours. Such a decline progressively vanishes due to the growing importance of asymmetric technology shocks. To reach these two conclusions, we simulate a two-sector model which can reproduce the contractionary effect on hours once the economy is internationally open and we allow for production factors’ mobility costs, factor-biased technological change, and home bias. To account for the vanishing decline in hours, we have to let the share of asymmetric technology shocks increase over time.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"157 ","pages":"Article 104095"},"PeriodicalIF":3.8,"publicationDate":"2025-05-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144083778","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":"Seniority and sovereign default: The role of official multilateral lenders","authors":"Adrien Wicht","doi":"10.1016/j.jinteco.2025.104098","DOIUrl":"10.1016/j.jinteco.2025.104098","url":null,"abstract":"<div><div>This paper studies official multilateral lending in the sovereign debt market. Official multilateral debt receives priority in repayment, even though this is not legally required. It represents an important portion of total sovereign debt and increases both before and during a default. Defaults on official multilateral debt are infrequent, last relatively longer and are associated with greater private lenders losses. I develop a model with private and official multilateral lenders where the latter benefits from a greater enforcement power in repayment. This allows the model to rationalize the aforementioned empirical facts and generates non-monotonicity in the private bond price. In small amount, official multilateral debt has a positive catalytic effect which is quantitatively strong but short lived. Sovereign borrowers value the use of official multilateral debt and would not necessarily prefer other seniority regimes.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"155 ","pages":"Article 104098"},"PeriodicalIF":3.8,"publicationDate":"2025-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143895639","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":"Lobbying, trade, and misallocation","authors":"Jaedo Choi","doi":"10.1016/j.jinteco.2025.104086","DOIUrl":"10.1016/j.jinteco.2025.104086","url":null,"abstract":"<div><div>This paper studies how lobbying affects welfare gains from trade in a second-best world. I develop an open economy model of heterogeneous firms that can lobby to influence firm-specific distortions. As trade costs decline, exporters increase lobbying due to the complementarity between market size and lobbying benefits, impacting allocative efficiency, firm entry, and consequently gains from trade. I estimate the model using an IV strategy and indirect inference with US firm-level data. Gains from trade are 4% higher with lobbying, driven by larger improvements in allocative efficiency as more productive exporters increase lobbying, mitigating their initially unfavorable exogenous distortions. However, when selection is driven by exogenous distortions, trade may cause welfare losses exacerbated by lobbying. These findings suggest that firms’ micro-level adjustments matter for gains from trade.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"155 ","pages":"Article 104086"},"PeriodicalIF":3.8,"publicationDate":"2025-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143885942","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":"Default and development","authors":"Lei Li , Gabriel Mihalache","doi":"10.1016/j.jinteco.2025.104089","DOIUrl":"10.1016/j.jinteco.2025.104089","url":null,"abstract":"<div><div>We develop a quantitative theory of the long-run frequency of sovereign default, in which the government’s willingness to risk crises reflects the sectoral composition of the economy. Development and structural transformation alter the trade-offs faced by the government, with the implication that default is largely a lower income country phenomenon, as in the data. Default impacts adversely the balance sheets of financial intermediaries, who then offer unfavorable rates on working capital loans to producers. The resulting contraction in activity is asymmetric across sectors, based on their financing requirements, and tax revenues fall. Governments find it unappealing to risk default if the economy is more vulnerable to financial distress, due to a larger share of value added from manufacturing and services, even for the same Debt to GDP ratio. This mechanism supports the notion of countries eventually “graduating” from sovereign default crises.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"155 ","pages":"Article 104089"},"PeriodicalIF":3.8,"publicationDate":"2025-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143904147","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}