Simulating the Constant Cost Trade Model

Measuring energy usage in the forestry trade is a topic of great significance. In this article, we use the World Input–Output Database and the multiregional input–output model to establish an embodied energy competition network and assess the influence of global value chain (GVC) integration on competition. The results show that (1) the intensity of competition for embodied energy in forestry is higher for exports compared with imports. Additionally, the import competition network exhibits lower connectivity and overall efficiency. (2) The core regions of the competitive network are primarily found in Europe, Asia, and the Americas. The United States consistently maintains a competitive advantage. However, forestry policies have led to a decline in the status of the United States, (3) The hierarchical structure of export competition is more pronounced. When the weighting degree exceeds 200, this phenomenon becomes more pronounced. (4) From the perspective of GVC, positive embedding in the GVC is negatively correlated with import competition. Backward GVC embedding is positively correlated with import and export competition. On the basis of the above results, this article proposes that countries where backward embedding is the main method should actively participate in building appropriate export international associations, participating in international organizations, and building a relatively harmonious and stable export competition market, thereby helping to maintain economic development and energy environment management.

Trade balances and global value chains: Is there a link?

This paper presents the adjustment process of the WIOD (World Input-Output Database) tables of Turkey to national accounts data coming from the TurkStat (Turkish Statistical Institute). The database covers 27 EU countries and 13 other major countries in the world for the period 1995 to 2011. The main aim of the paper is to construct a series of balanced input-output tables (IOTs) for Turkey’s Interindustry Analysis Model (Turina). TURINA is an Interdyme type (Interindustry dynamic macroeconomic) model developed by INFORUM (Interindustry Forecasting at University of Maryland). The Inforum model requires one or more IO tables with three blocks: i. Total intermediate (domestic plus import) interindustry flow matrix, FM ii. Final demand block, FD, iii. And Value added block, VA. A time series of 35-sector annual IO tables for the Turkish economy has been constructed by the WIOD. The format of national input-output tables in WIOD is different from the normal format of national input-output tables which can be directly used in building an INFORUM model. The WIOD structure consists of six blocks: i. Intermediate flow matrix which only shows domestically produced inputs. ii. Final demand goods produced by domestic industries. iii. An import matrix which shows import components of intermediate inputs into domestic industries. iv. Imports components of final demand categories. v. Value added block at the bottom rows of the whole table. vi. Some elements of value added rows inside the final demand block. In the adjustment process three major steps are taken. The first step requires the addition of import rows to domestic rows in order to obtain the total intermediate and final demand figures. The second step requires the adjustment of the sum of final demand categories to national account totals at aggregate level. The third step requires the adjustment of value added totals to national account income figures provided by national statistical office. After all these steps any imbalances which are almost always the case an RAS procedure is applied to balance the whole system at sectoral level. At the present stage I have checked the WIOD table for 2011. Starting from the final demand side, I observed that there are no deviations for Government expenditures and Gross domestic fixed investment between the WIOD and the TurkStat figures. For other variables of final demand block (Consumption, Changes in stocks, Exports, Imports,) some slight differences were observed. Therefore initially, the GDP figure in the TurkStat sources exceeded the WIOD figure by 3.2 percent. Finally, with a series of balancing adjustments both at macro and sectoral level the WIOD table for 2011 is made consistent with the TurkStat data.

This article provides guidance to prudent use of the World Input–Output Database (WIOD) in analyses of international trade. The WIOD contains annual time‐series of world input–output tables and factor requirements covering the period from 1995 to 2011. Underlying concepts, construction methods and data sources are introduced, pointing out particular strengths and weaknesses. We illustrate its usefulness by analyzing the geographical and factorial distribution of value added in global automotive production and show increasing fragmentation, both within and across regions. Possible improvements and extensions to the data are discussed.

Recent trade literature highlights production sharing among economies [Johnson, R and G Noguera (2012). Accounting for intermediates: Production sharing and trade in value added. Journal of International Economics, 86(2), 224–236), and some studies report that 20–25% of CO2 emissions can be attributed to international trade [Peters, G, J Minx, C Weber and O Edenhofer (2011). Growth in emission transfers via international trade from 1990 to 2008. Proceedings the National Academy of Sciences USA, 108(21), 8903–8908.]. However, the mechanism explaining how and to what extent production sharing affects CO2 emissions remains unclear. This study, as an extension of [Meng, B, J Xue, K Feng, D Guan and X Fu (2013a). China’s interregional spillover of carbon emissions and domestic supply chains. Energy Policy, 61, 1305–1321.], adopts the perspective of demand spillovers to provide new insights regarding the position of Chinese domestic-regions’ production in Global Value Chains (GVCs) and their associated CO2 emissions. To this end, we employed a new type of World Input-Output Database (WIOD) in which China’s domestic interregional input–output table for 2007 is endogenously embedded. The pattern of China’s regional demand spillovers across both domestic regions and countries is revealed by employing this new database. These results were then connected to endowments theory, which helps to make sense of the empirical results. It is found that China’s regions are located relatively upstream in GVCs, and had CO2 emissions in net exports, which were entirely predicted by the environmental extended Heckscher–Ohlin–Vanek (HOV) model. Our study points to micro policy instruments to combat climate change: for example, tax reform for energy inputs that helps to change the production pattern, which then has an impact on trade patterns and so forth.

ABSTRACTThis paper illustrates the importance of taking into account re-exports. It shows that not taking into account re-exports causes estimates from the gravity model to be biased. It also considers the implications of re-exports for two current policy events. It is shown that the United States actually ran a net trade surplus in the North American Free Trade Agreement (NAFTA). Second, it is argued there may be additional costs for the UK economy from Brexit that are not addressed in earlier studies. This paper derives bilateral trade flows corrected for re-exports for a large number of countries at a detailed product level, using the World Input–Output Database (WIOD). Through a constrained non-linear optimization procedure, complete origin–destination matrices of re-exports are determined. Trade is subsequently restored to its most likely origin and destination.

The worldwide increase in consumption levels is a major cause of the dramatic rise in greenhouse gas (GHG) emissions. A thorough understanding of the dynamics of consumption-based carbon emissions and the factors influencing it would facilitate the design of climate policies. This article employs data in the multi-regional input-output tables and on sectoral carbon emissions from the World Input-Output Database (WIOD) to develop a multi-regional input-out (MRIO) model, setting up a consumption-based carbon emission accounting inventory and analyzing global consumption-based carbon emissions and the spillover effects of international carbon emissions. The results show that global consumption- based carbon emissions in 2009 were 28850 Mt, of which about 20 percent were embodied in international trade. A large part of these emissions derived from production in and exports from China and the region comprising Brazil, Russia, India, Indonesia, Australia and Turkey (BRIIAT), production and exports which were consumed in NAFTA and the Eurozone. If the factor of international trade is taken into consideration, the inter-regional gap in carbon emission intensity narrows, ranging from 2.4 t (BRIIAT) to 14.7 t (NAFTA) consumption-based emissions per capita. Whereas embodied imported carbon accounted for 33 percent and 17 percent in NAFTA and the Eurozone respectively, 29 percent of China’s carbon emissions were caused by the consumption of other countries. Therefore, setting up a consumption-based carbon emission accounting inventory has become increasingly important for international climate negotiations. Moreover, allocating responsibility for carbon emissions between the producer and the consumer will help change the existing mode of consumption and promote emission reduction.

Structural decompositions of energy consumption between 1995 and 2009: Evidence from WIOD

Intraregional trade shares for goods‐producing industries: RPC estimates using EU data

China is switching from economic growth based on extremely rapid capital accumulation to economic growth based on structural reforms and accelerated total factor productivity growth. Meanwhile, China will also face a serious excess saving problem as capital accumulation slows and, hence, needs to reduce its private saving rate. Based on this analysis, we estimated the economic impact of China's growth slowdown and hypothetical economic transformation on Japan, the USA and Germany using the world input–output database. We compared the following three scenarios for China's final demand in 2020 and economic growth from 2015 to 2020: (i) an optimistic scenario (GDP growth rate = 6.2%, investment/GDP = 0.501); (ii) a slowdown scenario (GDP growth rate = 4%, investment/GDP = 0.501); and (iii) a structural reform scenario (GDP growth rate = 6.2%, investment/GDP = 0.3). Our analysis suggests that Japan and Germany would suffer more from structural reforms in China than from a slowdown in growth. Meanwhile, for the USA, the employment decline triggered by structural reforms would be much smaller than the employment decline caused by a slowdown in growth.

In the current international trade characterized by global value chains (GVCs), to improve the trade interests of China’s manufacturing industry and change the unfavorable situation of “big but not strong,” industrial upgrading is an important issue that needs to be solved urgently. Based on the analysis of the impact of embedding in GVCs on the acquisition of trade benefits, the paper empirically tests the impact of embedding GVCs on manufacture upgrading by using industry segmentation data of China’s manufacturing industry from the year 2000 to 2014 in the world input–output database. The research shows that 1) from 2000 to 2014, forward and backward participation increased from 11.2% and 15.2% to 14.6% and 15.9%, respectively; China’s manufacturing industry mainly participates in the GVC in a backward way, which significantly improves trade interests; 2) both forward participation and backward participation in the GVC are conducive to the increase of trade benefits and are positive at the 5% level, which has a significant driving effect on the upgrading of the manufacturing industry; and 3) heterogeneity testing shows that capital-intensive, technology-intensive, and high-tech industries gain significant trade benefits, and embedding GVCs is more conducive to upgrading. Therefore, integrating into the GVC at a higher level is the direction to promote the upgrading of China’s manufacturing industry.

This paper analyzes the impact of fiscal spending shocks in a dynamic, multi-country model with international production networks. We first derive a decomposition of the effects of a fiscal spending shock on the GDP of any country. This decomposition defines the response as the sum of a Direct, Income, and Price effect. The Direct Effect depends only on structural parameters and is independent of assumptions about monetary policy, wage setting, or capital mobility, while the Price Effect is zero in the aggregate across countries. We apply this decomposition to an analysis of fiscal spillovers in the Eurozone, using the production network structure from the World Input Output Database (WIOD). We find that fiscal spillovers from Germany and some other large Eurozone countries may be large, and within the range of empirical estimates. Without international production network linkages, spillovers would be only a third as large as predicted by the baseline model. Finally, we explore the diffusion of identified government spending shocks at the sectoral level, both within and across countries, using an empirical measure of the response, based on the theoretical decomposition. The empirical estimates are strongly consistent with the theoretical model.

Driving forces of Spain׳s CO2 emissions: A LMDI decomposition approach

This study examines the home bias in trade in goods and services within the European Union. Using the newest release of the World Input Output database, available for the years 2000-2014, the effect is estimated using gravity regressions. The trade-reducing effect of borders is found to be sizeable. It is greater for trade in services than for goods, though the former declined more markedly throughout the period. The paper extends current literature by demonstrating and analysing the variation in the bias across Europe. The border effect is larger in Central and Eastern Europe than in other parts of the continent. The differences in the effect can be largely explained by the depth of a country's integration with the European Union. The number of years passed since a country joined the EU has a significant impact on the bias. The longer a country has been in the EU, the lower its home bias, with the first years of membership having the largest (in absolute terms) effect.

In spite of ambitious modernization plans of the government, structural change in Russia is not proceeding in the direction of highly developed economies. Part of the lag in the tertiarization process can be explained by the fact that, as during the Soviet period, the role of services in the economy is still ignored, particularly regarding innovation. This paper aims to contribute to the analysis of the evolution of services in Russia since the mid-1990s and its future prospects by compiling data from the World Bank, the International Labor Organization, Rosstat, and the World Input–Output Database. Two complementary and novel perspectives are adopted: a production system perspective and a spatial perspective. Regarding services in the Russian production system, comparison of interindustry linkages reveals that, in addition to traditional relevant activities like wholesale/retail trade and transport and communications, business services are acquiring great importance as production process inputs. Concerning the spatial perspective, we observe a greater presence of non-market services in less densely populated federal districts, while strategic service activities are highly concentrated in the most dynamic ones. Analysis of major Russian cities confirmed the trend of business services concentrating in densely populated and highly innovative cities. In brief, services, and in particular business services, can be a means to boost innovation and growth in Russia, but more attention from political leaders is necessary for these activities. The modernization process should abandon its current “high-technology industry myopia” and take into consideration the innovative, and especially, the knowledge-diffuser role, that services can exert.