We use the HOSV model of trade to find out a link between corruption and the pattern of trade, not just its effect on the volume of trade. We prove that greater corruption in labor-abundant countries will restrict the volume of world trade while corrupt capital-abundant countries promote trade. This is caused by intermediaries who are engaged in mitigating the transaction cost of corruption. Re...

Development economists argue that trade protection reduces industrial sector efficiency, mainly through the distortion in relative prices, increased market power, x-inefficiency and inefficient scales of production. Nevertheless there is no convincing evidence on the link between trade reforms and improvement in economic performance. This work examines the case of Uruguay, an economy that intro...

A framework was devised for policy-makers to assess direct bilateral cap-and-trade linkages. A systematic analysis of the economic, political and regulatory implications indicates potential benefits along with a number of potentially negative side effects. Theoretically, economic benefits are expected from quasi-static short-term and dynamic efficiency gains. However, a careful review of these ...

This study investigates the relationship between consumer search costs, inflation, and firm markups in retail trade by employing actual measures of consumer search cost gathered by way of an online consumer survey. Consistent with theory, results indicate that markups can be higher if consumer search costs are higher. Results from panel data also show that increases in inflation lead to increas...

The article ‘From cigarette smuggling to illicit tobacco trade’ exposes the modus operandi in illicit trade that highlights the need for global cooperation in eliminating the illicit trade of tobacco products (see page 230). It must be emphasised as well that the protocol can only be as strong as the weakest link in the chain of states that will participate in it. Ideally, all countries current...

This paper explores a possible link between financial development and trade in manufactures. The theoretical model focuses on the role of financial intermediaries in facilitating large-scale, high-return projects and shows that economies with better-developed financial sectors have a comparative advantage in manufacturing industries. We provide evidence for this hypothesis, first proposed by Kl...

The first Ministerial Conference of the World Trade Organization (WTO), held in Singapore during 9-13 December 1996, had a rough start. The United States (US) had wanted to create a WTO working group on labour standards, which developing countries bitterly opposed. In the end, developing countries prevailed and the US effectively agreed to delegate the subject to the International Labour Organi...