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90 posts on "International Economics"

November 06, 2019

Trade Policy Uncertainty May Affect the Organization of Firms’ Supply Chains



Trade Policy Uncertainty May Affect the Organization of Firms’ Supply Chains

Global trade policy uncertainty has increased significantly, largely because of a changing tariff regime between the United States and China. In this blog post, we argue that trade policy can have a significant effect on firms’ organization of supply chains. When the probability of a trade war rises, firms become less likely to form long-term, just-in-time relationships with foreign suppliers, which may lead to higher costs and welfare losses for consumers. Our research shows that even in the absence of actual tariff changes, an increased likelihood of a trade war can significantly distort U.S. imports.

Continue reading "Trade Policy Uncertainty May Affect the Organization of Firms’ Supply Chains" »

Posted by Blog Author at 7:00 AM in International Economics | Permalink | Comments (0)

August 14, 2019

Are U.S. Tariffs Turning Vietnam into an Export Powerhouse?



Are U.S. Tariffs Turning Vietnam into an Export Powerhouse?

The imposition of Section 301 tariffs on about half of China’s exports to the United States has coincided with a fall in imports from China and gains for other countries. The U.S.-China trade conflict also appears to be accelerating an ongoing shift in foreign direct investment (FDI) from China to other emerging markets, particularly in Asia. Within the region, Vietnam is often cited as a clear beneficiary of these trends, a rising economy that could displace China, to some extent, in global supply chains. In this note, we examine the data and conclude that Vietnam is indeed gaining market share, but is too small to replace China anytime soon.

Continue reading "Are U.S. Tariffs Turning Vietnam into an Export Powerhouse?" »

Posted by Blog Author at 7:00 AM in Exports, International Economics, Tariffs | Permalink | Comments (0)

August 07, 2019

Does a Data Quirk Inflate China’s Travel Services Deficit?



LSE_Does a Data Quirk Inflate China’s Travel Services Deficit?

Chinese residents are increasingly traveling to see the rest of the world, logging a total of 162 million foreign visits in 2018, up from 57 million in 2010. Increased travel spending by Chinese residents is acting to reduce the country's trade surplus because such spending is counted as a services import. However, there appears to be a quirk in the Chinese data that results in a significant understatement of the offsetting spending by visitors to China (a services export). According to other Chinese data, this understatement totaled $85 billion in 2018. If so, China's deficit in travel services is smaller than officially reported, and its trade surplus correspondingly larger.

Continue reading "Does a Data Quirk Inflate China’s Travel Services Deficit?" »

May 23, 2019

New China Tariffs Increase Costs to U.S. Households



New China Tariffs Increase Costs to U.S. Households

Tariffs on $200 billion of U.S. imports from China subject to earlier 10 percent levies increased to 25 percent beginning May 10, 2019, after a breakdown in trade negotiations. In this post, we consider the cost of these higher tariffs to the typical U.S. household.

Continue reading "New China Tariffs Increase Costs to U.S. Households" »

Posted by Blog Author at 7:00 AM in Household Finance, International Economics, Tariffs | Permalink | Comments (9)

May 20, 2019

How Has Germany’s Economy Been Affected by the Recent Surge in Immigration?



How Has Germany’s Economy Been Affected by the Recent Surge in Immigration?

Germany emerged as a leading destination for immigration around 2011, as the country’s labor market improved while unemployment climbed elsewhere in the European Union. A second wave began in 2015, with refugees from the Middle East adding to already heavy inflows from Eastern Europe. The demographic consequences of the surge in immigration include a renewed rise in Germany’s population and the stabilization of the country’s median age. The macroeconomic consequences are hard to measure but look promising, since per capita income growth has held up and unemployment has declined. Data on labor-market outcomes specific to immigrants are similarly favorable through 2015, but reveal challenges in how well the economy is adjusting to the second immigration wave.

Continue reading "How Has Germany’s Economy Been Affected by the Recent Surge in Immigration?" »

February 13, 2019

Could Rising Household Debt Undercut China’s Economy?



LSE_Could Rising Household Debt Undercut China’s Economy?

Although there has been a notable deceleration in the pace of credit growth recently, the run-up in debt in China has been eye-popping, accounting for more than 60 percent of all new credit created globally over the past ten years. Rising nonfinancial sector debt was driven initially by an increase in corporate borrowing, which surged in 2009 in response to the global financial crisis. The most recent leg of China’s credit boom has been due to an important shift toward household lending. To better understand the rise in household debt in China and its implications for financial stability and China’s economic performance, it is important to examine the expansion in household credit, how the rise in debt compares to international experience, and the associated risks.

Continue reading "Could Rising Household Debt Undercut China’s Economy?" »

Posted by Blog Author at 7:13 AM in Credit, Household Finance, International Economics | Permalink | Comments (2)

February 11, 2019

The U.S. Dollar’s Global Roles: Where Do Things Stand?



LSE_The U.S. Dollar’s Global Roles: Where Do Things Stand?

Previous
Liberty Street Economics analysis and New York Fed research addressed the potential implications for the United States if the dollar’s global role changed, noting that the currency might not retain its dominance forever. This post checks the status of the dollar, considering whether any erosion in the dollar’s international standing has occurred. The evidence to date is that the dollar remains the world’s dominant currency by broad margins. Alternatives have not gained extensive traction, albeit this does not rule out potential future pressures.

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Posted by Blog Author at 7:00 AM in Central Bank, International Economics | Permalink | Comments (0)

January 11, 2019

Highlights from the Fourth Bi-annual Global Research Forum on International Macroeconomics and Finance



LSE_Highlights from the Fourth Bi-annual Global Research Forum on International Macroeconomics and Finance

Achieving and maintaining global financial stability has been at the forefront of policy discussions in the decade after the eruption of the global financial crisis. With the purpose of exploring key issues in international finance and macroeconomics from the perspective of what has changed ten years after the crisis, the fourth bi-annual Global Research Forum on International Macroeconomics and Finance, organized by the European Central Bank (ECB), the Federal Reserve Board, and the Federal Reserve Bank of New York, was held at the ECB in Frankfurt am Main on November 29-30, 2018. Participants included a diverse group from academia, international policy institutions, national central banks, and financial markets. Among the topics of discussion: the international roles of the U.S. dollar, the evolution of global financial markets, and the safety of the global financial system.

Continue reading "Highlights from the Fourth Bi-annual Global Research Forum on International Macroeconomics and Finance" »

Posted by Blog Author at 7:00 AM in Financial Markets, International Economics | Permalink | Comments (0)

January 09, 2019

The Perplexing Co-Movement of the Dollar and Oil Prices



LSE_The Perplexing Co-Movement of the Dollar and Oil Prices


Oil prices and the exchange rate of the U.S. dollar against the euro have often moved together over the past decade or so, but it is not at all clear why they should. The standard interpretation of oil price movements as a response to global oil supply and demand shifts makes it unlikely that the correlation stems from the dollar’s effect on oil prices. In addition, the notorious difficulty in predicting currency moves makes it hard to believe that oil prices dictate the dollar’s value. Improbability aside, however, in this blog post we document the tendency for the value of the dollar to rise relative to European currencies when oil prices fall, and we consider a possible explanation for the correlation.

Continue reading "The Perplexing Co-Movement of the Dollar and Oil Prices" »

Posted by Blog Author at 7:00 AM in Exchange Rates, International Economics | Permalink | Comments (6)

January 04, 2019

The Impact of Import Tariffs on U.S. Domestic Prices



LSE_The Impact of Import Tariffs on U.S. Domestic Prices

The United States imposed new import tariffs on about $283 billion of U.S. imports in 2018, with rates ranging between 10 percent and 50 percent. In this post, we estimate the effect of these tariffs on the prices paid by U.S. producers and consumers. We find that the higher import tariffs had immediate impacts on U.S. domestic prices. Our results suggest that the aggregate consumer price index (CPI) is 0.3 percent higher than it would have been without the tariffs.

Continue reading "The Impact of Import Tariffs on U.S. Domestic Prices" »

Posted by Blog Author at 7:00 AM in Household Finance, International Economics, Tariffs | Permalink | Comments (5)
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