This study examines the 'interdependence' between financial openness and trade (real) openness, as well as the macroeconomic determinants of such relationship from a general equilibrium perspective (viz. the balance of payments constraint). The macroeconomics factors are national income, exchange rate, and interest rate. The data cover 124 countries over a period spanning between 1970 and 2019. The 'interdependence' between financial and trade openness is captured by a positive Pearson correlation in most of the countries (i.e. between 60% and 79% of the countries). However, a more precise measure of a bidirectional causality between both openness exists in only 35% (44 countries) of 124 countries. The empirical results show that exchange rate explains negatively the estimated correlation coefficients between financial and trade openness, as well as for low income countries. While, the interest rate increases the likelihood of their bidirectional causality results. This study provides policy insights related to both the financial and real markets.

We estimate the household consumption function using the Korean labor and income panel data (2001-2012) with the instrument of the housing supply to figure out the homeowner balance sheet channel of monetary policy in South Korea during the 2000s and the early 2010s. We find that monetary policy has a significant effect through both the wealth and collateral effects comprising the homeowner balance sheet transmission channel. Furthermore, the wealth effect shows a significant result across all income quantile groups, whereas the collateral effect is significant in the low- and middle-income quantile groups. This finding implies that the lower-income groups are more sensitive to changes in the value of real estate assets. Based on the analysis, we derive policy implication that socio-economic integration will be enhanced under the considerately targetted monetary policy, which is a lesson for the emerging or developing countries whose current economic situation is similar to the past South Korea.

The study examines the effects of firm trade participation on labor productivity, wages, and female employment using recent manufacturing enterprise survey data for Egypt. It finds positive labor productivity premium for both exporting and importing firms, being the highest for small-sized exporting firms reflecting their greater benefits from learning-by-exporting. Importing intermediate inputs enhances productivity the most for firms in medium-high and high technology intensive sectors. Moreover, both exporting and importing firms pay higher average wages than non-exporters and non-importers, where economies of scale and higher productivity of trading firms-rather than the skill characteristics or composition of labor force- work as the explanatory channels. Also, firm trade participation enhances gender labor outcomes through reducing the gender wage gap and employing a higher share of female workers especially in low technology export sectors. To translate these favorable impacts into an economywide labor market improvements in Egypt, more efforts should be done in reforming the business environment to enable a greater participation of small firms into export markets and an easier access of firms-especially those operating in technologically advanced sectors- to essential imported inputs that embody advanced foreign knowledge and/or are of higher quality than domestic alternatives.

We propose to examine how climate damage may transform Vietnam's long-run growth rate. Because of cross-country linkages forged by bilateral trade, there are two channels through which international damage spillovers may occur. First, the dynamics of partners' growth determine future trends in Vietnam's volume of exports. Second, since the domestic impact of climate change may be heterogeneous across countries, there will be a differentiated impact on export and import market shares. Both terms play a critical role in changing trade patterns that are likely to shift Vietnam's external constraint. This demand-side view of growth based on the balance-of-payments constraint is a powerful predictor of inter-country growth differences. Our study show that the consequences of climate change could equate to a 2.5% reduction in Vietnam's growth rate over the period 2020-2060. Our decomposition exercise by effect and by partner area shows that international damage spillovers result from very different individual behaviours.

This study investigates the effect of various types of trade impediments on Indonesia's trade flows. We categorize tariff measures, non-tariff measures (NTMs), and the lack of trade facilitation measures into at-the-border and behind-the-border barriers. A gravity model is applied to a panel dataset covering 177 of Indonesia's trade partners from 2007 to 2016. This study shows that Indonesia's trade protection remains high, particularly due to the increasing use of NTMs. Furthermore, the lack of trade facilitation also contributes to increasing trade costs, particularly those associated with trade logistics and administration. We also demonstrate why feasible generalized least square is preferable to ordinary least squares and pseudo-Poisson maximum likelihood when estimating a gravity model using panel data that are auto-correlated and contain a large number of zero observations.

This study examines the effect of U.S. Presidents and Secretaries of State visits to a country on institutional quality, particularly on economic freedom. Hence, the study develops a model that predicts the conditions under which official visits can enhance the quality of institutions. We compile variables on official visits from 1960 to 2019 from the archives of the U.S. State Department to test the predictions of our model. In addition, we use the endogenous treatment model estimation to deal with potential endogeneity. The estimation results show that the official visits have a statistically significant negative effect on economic freedom, particularly in non-democratic countries with less political freedom. The estimation results are robust with different types of visits and samples. The study presents multiple explanations for these results, including the possibility of the following: First, some American administrations adopt a pragmatic approach aimed at achieving strategic objectives while overlooking practices that do not enhance institutional quality. Second, these official visits may improve other aspects of institutional quality that are more observable to the international community than economic freedoms. Third, American policymakers care more about achieving short-term objectives from their visits that can be presented as accomplishments to their electorate rather than institutional reforms that will only yield benefits to the United States in the long run. Finally, economic freedoms are associated with political freedoms per the Hayek-Friedman hypothesis.

This study analyzes the evolution of Africa's degree of economic integration with China from 1993 to 2019. The study period encompasses a number of China-Africa bilateral economic treaties, which the literature claims are prolific and have significantly strengthened Africa's degree of economic integration with China. We develop a theoretical argument that, if this assertion holds, the integration indicator must reflect a long-run upward trend that is less obstructed by noise. To validate this argument, we use a wavelet approach and find no evidence necessitating failure to reject the null hypothesis of no periodicity, suggesting that the integration indicator was statistically noisy over the study period. This finding suggests that interpreting the evolution of China-Africa economic integration primarily through bilateral economic pacts can be deceptive. The interpretation should instead be exploratory in nature to unpack some hidden motivations associated with this integration. Our preliminary investigation revealed that the Angola Model is primarily driving China-Africa economic integration. Therefore, it is plausible to argue that China-Africa economic integration is perpetuated to exploit natural resources rather than to enhance hard infrastructure development in Africa, as purported in the literature.

International financial institutions have advised developing countries to implement a reform of their tax revenue structure to reduce their dependence on international trade tax revenue, for the benefit of domestic tax revenue. This study examines the effect of this type of tax reform on the real exchange rate through the trade openness channel. It defines tax reform (also known as "tax transition reform") as a process that involves the convergence of developing countries' tax structures toward the tax structure of developed countries (given the weak dependence of the latter's tax structure on international trade tax revenue). The analysis is conducted using an unbalanced panel dataset of 107 countries from 1980-2019, and the two-step system-generalized method of moments approach. The findings show that tax reform causes real exchange rate depreciation, with the magnitude of this effect being higher in developed countries than in developing countries. Furthermore, the real exchange rate depreciation effect of the tax reform is higher in countries with greater trade openness and a tax structure that is less dependent on international trade tax revenue.

The Indian Ocean Rim Association (IORA) is a regional association based on the principle of open regionalism to promote liberalization through trade and investment facilitation. This study compares two main scenarios with the ingredients of a deeper regional integration compared to the IORA's present open regionalism status. Scenario I evaluates the effects of gradual tariff cuts on IORA, while Scenario II combines the impact of tariff cuts, non-tariff measures (NTM) reduction, and trade facilitation. A recent recursive dynamic model, called Global Trade Analysis Project recursive dynamic model (GTAP-RD), was used to understand the adjustment path. The result shows welfare gain for all IORA countries when a trade liberalization involving tariff cuts is complemented with NTM reduction and trade facilitation. In addition, the "NTM spillover" effect on some non-IORA members (the rest of Gulf Cooperation Council, the rest of Greater Arab Free Trade Agreement, and the United Kingdom) was observed. The results suggest that IORA has more to gain if it involves a deeper regional integration than the present form of open regionalism.

The present evolutionary phase in international economic and political relations involves the analysis of a "new globalization" and the profound reshaping of multipolarity. This article examines the fundamental elements of the newly emerging globalization morphology from a critical standpoint on the key aspects of the Regional Comprehensive Economic Partnership (RCEP). It aims to discern why such free trade agreements are significant expressions and imprints of the unfolding new multipolarity. It focuses on crucial dimensions of such international socioeconomic agreements for deepened global cooperation and development. For the analysis, we distinguish between the structures of the previous globalization regime and some evolutionary dimensions of the gradual transition to a "new globalization" (e.g., the RCEP). We contend that such agreements enrich regional economic and social integration and can expand globalized transnational flows, thereby boosting efficient cooperation for reconstructing future dynamics of international economic development.