Przemyslaw Kowalski

Dynamic Gains from Trade

The post world war II era has been characterized by unprecedented growth in the world economy and progressive reduction in barriers to international trade and investment. The objective of this study is to assess to what extent the observed growth and deepening international economic integration are related. It begins by discussing the concept of dynamic gains from trade. Narrowly defined, dynamic gains are traderelated changes in the long-run rate of productivity growth. Although there is no conclusive evidence that...

South-South Trade In Goods

The empirical analysis presented in this paper indicates that trade between developing countries (South-South trade) offers a wide scope for specialisation and efficiency gains. The first part of the paper takes an ex-post perspective and employs the gravity methodology to contribute to understanding past trends in world goods trade with a special focus on South-South trade. Analysis shows that far from experiencing a ?death of distance?, South-South trade is still severely...

Harrod-Balassa-Samuelson Effect in Selected Countries of Central and Eastern Europe

This study investigates the HBS effect in a panel of nine CEECs during 1993:Q1-2003:Q4 (unbalanced panel). Prior to estimating the model, we analyze several key assumptions of the model (e.g. wage equalisation, PPP and sectoral division) and elaborate on possible consequences of their failure to hold. In the empirical part of the paper, we check the level of integration of the variables in our panel using the Pedroni panel-stationarity tests. We then investigate the internal and external version of the HBS effect with the Pedroni panel-cointegration tests as well as by means of group-mean FMOLS and PMGE estimations to conclude that there is a strong evidence in support of the internal HBS and ambiguous evidence regarding the external HBS. Our estimates of the size of inflation and real appreciation consistent with the HBS effect turned out generally within the range of previous estimates in the literature (0-3 % per annum). However, we warn against drawing automatic policy conclusions based on these figures due to very strong assumptions on which they rest (which may not be met in near future). Finally, following the hypotheses put forward in the literature, we elaborate and attempt to evaluate empirically the potential impact of exchange rate regimes on the magnitude of the HBS effect.

Impact of Changes in Tariffs on Developing Countries' Government Revenue

This paper addresses tariff revenue concerns that some countries have been expressing in the context of the current multilateral trade negotiations under the Doha Development Agenda. This paper: discusses methodological issues associated with estimating revenue impacts; provides impact estimates for a sample of developing countries; links the differences in impacts to cross-country differences in existing tariff regimes as well as properties of formulas for tariff cuts; and, discusses efficient tax replacement policies and past experiences. Additionally, the paper presents results of a simulation of the welfare effects of reducing tariffs and simultaneously replacing lost tariff revenues with revenues from consumption tax. It concludes with some policy implications.

India's Trade Integration, Realising the Potential

This study examines economic implications of India’s trade and trade policy reforms during the period from 1990 to 2007. It first describes India’s economic growth and the composition and performance of its trade at the product and broad sector level. Next, recent reforms and the current trade policy stance are assessed and recommendations for further policy reforms are discussed. The impact of India’s openness on its total factor productivity is also addressed. The analysis shows that India has gone a long way in reducing its tariffs on non-agricultural products as well as selected non-tariff barriers and that this had a positive impact on the economy. Nevertheless, moderate to high protection still persists and adds to the hurdles faced by Indian enterprises. Overall, India’s pattern of specialisation is still affected by the pre- 1990s policies; while certain services have recently performed very well, their high reliance on skilled labour and capital means they can only address a small portion of the Indian jobless growth problem. India’s endowment structure and the recent services-dominated export profile suggest that it needs to improve conditions for the development of its manufacturing sector, with a particular emphasis—at this stage—on labour-intensive activities. The remaining goods and services trade barriers combine with domestic red tape, infrastructure bottlenecks and factor markets rigidities that restrict new entry and competition to keep India’s competitiveness, particularly in agriculture and manufacturing, at relatively low levels. In an effort to offset the remaining protection, India has developed a complex system of duty exemption schemes, special investment and establishment rules and special economic zones (SEZs) that provide incentives particularly to exporting firms. The paper argues that, while such a policy can have important demonstration effects, across-the-board reduction of trade and business barriers could have more beneficial economy-wide and export effects.

Economic impacts of the phase-out in 2005 of quantitative restrictions under the Agreement on textiles and Clothing

this chapter explains teh differences between specialization, reorientation of markets adn relocation overseas.

Nominal and Real Convergence in Alternative Exchange Rate Regimes in Transition Countries: Implications for the EMU Accession

This paper discusses the processes of nominal and real convergence and their dependence on exchange rate regimes adopted in Central and Eastern European countries (CEECs) in the context of their future EMU accession. We focus our argument on the possibility of trade-off between the pace of disinflation and the maintenance of competitiveness and growth. Fixed nominal exchange rate shifts the burden of adjustment on to the tradable sector but whether this pressure results in faster restructuring and faster productivity growth or becomes a straightjacket for the economy is an open question. The paper implements a simple empirical assessment of convergence of inflation to EU levels and economic growth of 7 CEE economies which had adopted different exchange rate regimes in period 1993-2002. Results indicate that fixed exchange rates seem to have been a better tool of fighting inflation as compared to floating exchange rates or intermediate regimes. The presence of a fixed exchange rate has also been characterised by higher real GDP growth rates implying an absence of trade-off between nominal and real convergence in the investigated sample. Qualifications attached to these results are discussed.

Exchange Rate Regimes and the Real Sector: A Sectoral Analysis of CEE Countries

This paper analyses the impact of exchange rate regimes on the real sector. While most studies in this field have so far concentrated on aggregate variables, we pursue a sectoral approach distinguishing between the tradable and nontradable sectors. Firstly, we present a survey of the relevant theoretical and empirical literature. This demonstrates that evaluations of exchange rate regimes and their impact on the real economy are largely dependant on specific assumptions concerning, in particular, the parameters of a utility function, the nature of the price adjustment process and the characteristics of analysed shocks. Secondly, we conduct an empirical analysis of the behaviour of the tradable and nontradable sectors under different exchange rate regimes for seven Central and Eastern European countries. We find no firm evidence of a differential impact of given exchange rate regimes on the dynamics of output and prices in the two sectors. We proffer a conceptual and technical interpretation of this.

South Africa's Trade and Growth

This paper examines key trade and trade related issues facing South Africa. It describes South Africa‘s re-entry into the global trade architecture and its economic growth in the context of its trade performance, as well as the composition and performance of South African exports at the product and sector level in the period from the early 1990s to 2006. The study also assesses South Africa‘s comparative trade performance based on a gravity model of international trade and discusses some key historical and recent trade policy developments. Finally, the study provides an econometric assessment of the impact of South Africa‘s trade liberalisation during the period from 1988 to 2003 on labour and total factor productivity across its industrial sectors. It shows that while South African trade performance has been good in recent years there is significant room to liberalise further as an adjunct to labour market reforms. Further trade policy liberalisation would bring about important equity and efficiency gains. Multilateral trade liberalisation has the potential to maximise the gains and ease the transition to freer trade for South Africa but unilateral liberalisation also deserves consideration.

China's Trade and Growth

This paper examines Chinas emergence as a global player in international markets over the last few decades. It provides an overview of Chinas trade policy environment following the countrys process of market opening and joining the WTO. The report analyses China’s role in international processing activities and moving up the global value chain. It also examines China’s impact on world prices and the deterioration of its own terms of trade. The paper looks at Chinas two-pronged export...