Robert C. Shelburne

Trade and Inequality: The Role of Vertical Specialization and Outsourcing

This article considers how the process of outsourcing results in economic changes in factor usage and productivity in developed countries. Some scholars have incorrectly interpreted these observed changes as being the result of biased skilled-labor using technological change. This article examines the size and significance of vertical specialization, and describes how outsourcing contributes to increased inequality in developed nations. The effects of outsourcing on labor market outcomes in the developing world are also explored. The author describes the potential implications and significance of outsourcing services. The major conclusion is that the downward pressure on the wages of the unskilled is likely to continue.

Government Export Promotion Expenditures: Some Cost Estimates and Practical Considerations

This article describes U.S. government expenditures for export promotion activity. The theoretical justifications for these programs are discussed and some problems in evaluating their cost effectiveness are examined.

The macroeconomics of commercial policy and the trade balance: A policy perspective

Is commercial policy a viable tool for correcting trade imbalances? Using the macroeconomic identity where the trade deficit is equal to net national savings, the theoretical channels through which commercial policy could impact the trade balance are investigated. Although there are numerous possible channels, there is presently little theoretical consensus or empirical evidence to suggest that commercial policy can have a permanent and significant impact on national savings or the trade balance. In macroeconomic models with unemployment, commercial policy has more potential in this regard; however, the practical policy relevance of this finding is of limited importance. The desirability of correcting a trade imbalance considering the alternatives and consequences is discussed.

The Role of Intra-Industry Trade in the Service Sector

Internationalization of the world economy has made trade a key factor in the growth potential of nearly every nation’s economy. Hence, economists have become increasingly interested in the determinants of international trade and competitiveness. Empirical Methods in International Trade captures the many aspects of this trend in globalization through practical techniques well-founded in economic theory. The authors, comprising some of the most influential applied international economists of their generation, use cutting-edge models to develop empirical approaches to critical aspects of economic interchange. These approaches are developed and explained carefully with the goal of making them accessible to a wide audience.

The effects of relative country size and endowment similarity in influencing trade volume and composition in general equilibrium monopolistically competitive markets

In order to explain two-way trade, the standard H-O model has recently been modified by assuming a market structure with monopolistic competition. The factors that affect the volume of total trade and its intra-industry component have been previously specified. This paper attempts to generalize these results to the N-good, M-country case. Although endowment similarity increases the intra-industry component in the 2×2 case, this proposition does not strictly hold for bilateral trade in the N × M case. Similarity of relative income size (GNP) does increase intra-industry trade in the 2×2 case, but does not increase the intra-industry share as assumed by several authors. In the N × M case, similarity of relative income size does not affect the bilateral volume of intra-industry trade nor its intra-industry share. This article thus shows that ceteris paribus comparative static changes in a 2-country model are not equivalent to changes in that variable across a cross-section of a multicountry model.

Long-Run Economic Growth: Stagnations, Explosions and the Middle Income Trap

Abstract This paper explores the empirics of long-run economic growth by studying the pattern of growth for every country in the world between 1950 and 2015. Special emphasis is placed on ascertaining how the pattern of growth has changed over the last 65 years and how growth is related to the level of development. The analysis identifies historical time periods when growth stagnated or exploded and the levels of development where growth has a tendency to either stagnate or explode. Studying these growth episodes provides a number of insights into the question as to whether or not there is such a thing as a middle income trap. Although there are economies at every level of development that have stagnated for long periods, this study finds no evidence that this is systematically or uniquely related to middle income economies. An additional point of emphasis of this study is to highlight how the inclusion or exclusion of the former planned economies of Eastern Europe and the Soviet Union affect these results; and likewise how China’s exceptional performance affects these results. Generally it is found that because of the size and extraordinary performance (both good and bad) of China and the Economies in Transition (EiT), that excluding them from the sample has a quite significant effect on estimates of global long-run growth and trends regarding growth over time and by income level.

THE UNITED STATES' FTAS WITH CHILE AND SINGAPORE

This paper examines the U.S. Free Trade Agreements with Chile and Singapore. The structures of the agreements are explained, the existing economic conditions of the countries are examined, the bilateral trade pattern between these nations and the United States is provided, a summary of the major existing trade barriers facing each country is detailed, and the likely economic and employment impacts are explored. These agreements not only liberalise trade, but also open service sectors, strengthen intellectual properly and foreign investment protections, liberalise immigration, and introduce labour and environmental standards. These agreements are compared to the earlier FTA with Jordan and the NAFTA with Mexico.