This paper provides empirical evidence for the interaction between firm-level total factor productivity and trade liberalization as key determinants of firm-level job destruction caused by trade. We also test some key theoretical predictions from Melitz (2003), whose model is used to derive an explicit equation relating firm productivity and trade-induced labor layoff when a country liberalizes...

Computable general equilibrium (CGE) models of world trade, often presented as demonstrating the benefits of trade liberalization, now make much more modest forecasts than they did just a few years ago. The estimated benefits are not only small in the aggregate, but also skewed toward developed countries; the expected contribution of trade liberalization to economic development and poverty alle...

This paper quantifies the welfare impact of a permanent increase in the level of per capita income brought about by a temporary growth effect following financial liberalization. We find that a lion’s share of the welfare benefits from financial liberalization accrue over relatively short horizons, and in the early years after the policy is implemented. Evaluating welfare gains from liberalizati...

In many countries throughout the world, regulators are struggling to determine whether and how to introduce competition into regulated industries. This essay examines the complexities involved in the liberalization process. While stressing the importance of case-specific analyses, this essay distinguishes liberalization policies that generally are procompetitive from corresponding anticompetiti...

There has been an unprecedented trade liberalization which started in the mid1980s in a wide spectrum of developing countries. In the same period, there have also been considerable changes in the tax structures of countries. This paper uses panel data on 65 countries, including 16 Middle East and North Africa (MENA) countries, for the period 1980–1997 to examine how tax structures responded to ...

Research on the macroeconomic impact of capital account liberalization finds few, if any, robust effects of liberalization on real variables. In contrast to the prevailing wisdom, I argue that the textbook theory of liberalization holds up quite well to a critical reading of this literature. Most papers that find no effect of liberalization on real variables tell us nothing about the empirical ...

Financial liberalization has led to financial deepening and higher growth in several countries. However, it has also led to a greater incidence of financial crises. Here, we review the empirical evidence on these dual effects of financial liberalization across different groups of countries. We then present a conceptual framework that explains why there is a trade-off between growth and incidenc...

The majority of OECD countries has experienced a reduction in the volatility of output during the last two decades. This period is also characterized by the liberalization of the capital accounts of these countries. This paper examines whether capital markets liberalization can lead to lower macroeconomic volatility. We study a business cycle model with multiple countries and financial market f...

The well-known question whether regional trade agreements (RTAs) and the multilateral trading system (MTS) are “strangers, friends, or foes” (Bhagwati and Panagariya, 1996) has gained new importance with the widespread proliferation of RTAs in recent years. Based on an extensive data set which covers most of world trade over the past 60 years and about 240 regional trade agreements, we analyze ...

The well-known question whether regional trade agreements (RTAs) and the multilateral trading system (MTS) are “strangers, friends, or foes” (Bhagwati and Panagariya, 1996) has gained new importance with the widespread proliferation of RTAs in recent years. Based on an extensive data set which covers most of world trade over the past 60 years and about 240 regional trade agreements, we analyze ...