To what extent can exporters cushion the impact of currency appreciation shocks by using imported intermediates? We apply a partial equilibrium model with heterogeneous firms. Producers can serve the domestic market, export final goods, or import inputs. In the model, an exogenous exchange rate shock simultaneously affects the variable costs and revenues associated with exports and imports. The...

Domestic institutions can have profound effects on international trade. This chapter reviews the theoretical and empirical underpinnings of this insight. Particular attention is paid to contracting institutions and to comparative advantage, where the bulk of the research has been concentrated. We also consider the reverse causation running from comparative advantage to domestic institutions.

South Africa adopted the GATS Basic Agreement on Telecommunications and the regulatory principles in 1998. Obligations undertaken by South Africa mirrored the framework for the gradual telecommunications reform process that was begun in 1996. In the light of two threatened actions for anti-competitive practices in violation of the Agreement, this paper reviews the nature of the commitments unde...

This paper investigates the consequences of designing domestic incentive regulation under asymmetric information in the general equilibrium context of an open economy. We discuss the implications of such incentive regulation for international specialization and the conditions for trade openness to be still welfare-improving. More specifically, we append to an otherwise standard 2× 2 Heckscher-O...

In this study, a dynamically recursive general equilibrium model of Morocco is used to examine alternative trade and domestic policy scenarios involving the implementation of the EU Association Agreement for the period 1998-2012. The model has a detailed treatment of the agricultural and rural economy in Morocco. The results for the trade liberalization scenarios indicate that tariff unificatio...

Domestic innovations and technology imports play important roles in boosting relative demand for skilled labor force. These factors are in turn influenced by domestic R&D investments and international trade. Using a translog cost function, this paper studies the effect of technology imports and other factors including output level and physical capital stock on the shares of skilled labor force ...

MARKET STRUCTURE, TRADE LIBERALIZATION AND THE GATS J.F. Francois and I. Wooton Abstract: In this paper we consider the impact of improved domestic market access for a foreign service provider. We emphasize the interaction between the different modes of market access commitments in services (cross-border and establishment) market structure, and regulation. We work with a model where the domesti...

During recent decades there has been substantial momentum for trade liberalization. At the same time, multinational production has become increasingly important in international competition. In this paper we show that these phenomena may be linked through environmental policy. When the national governments cannot use direct trade policy measures, environmental policy is distorted towards enhanc...

This paper investigates the causes of China’s output and trade balance fluctuations in the period of 1985–2000, with special attention to the role of the real exchange rate. The effects of four types of shock – the foreign supply shock, the domestic supply shock, the relative demand shock and the nominal shock – are examined, employing a near -VAR that embodies the long-run properties of a ‘dep...