Trade Costs and Current Accounts

Abstract : Are trade cost reductions a plausible explanation for growing global current account imbalances? I advocate that changes in trade costs affect trade and production structures, which is likely to affect national savings and investment. Explicitly adding trade costs à la Markusen and Venables into Jin's framework, this augmented model predicts that trade cost reductions affect the current account through changes in the industrial structure. Empirical evidence confirms that the interaction of trade costs and capital intensity drives current account balances. I also provide evidence that the response of current accounts to changes in trade costs depends on the capital intensity of production and on the depth of regional agreements on trade and factor mobility. Aside from the direct effect generally emphasised in standard macro-level analysis, changes in production patterns could therefore be an additional channel of impact of regional integration on current accounts.
Type de document :
Article dans une revue
The World Economy, 2015, 39 (10), pp.1653--1672. 〈10.1111/twec.12318〉
Liste complète des métadonnées

https://hal.archives-ouvertes.fr/hal-01533547
Contributeur : Romain Boisselet <>
Soumis le : mardi 6 juin 2017 - 15:44:22
Dernière modification le : mardi 3 juillet 2018 - 11:23:51

Lien texte intégral

Identifiants

Collections

Citation

Clément Nedoncelle. Trade Costs and Current Accounts. The World Economy, 2015, 39 (10), pp.1653--1672. 〈10.1111/twec.12318〉. 〈hal-01533547〉

Partager

Métriques

Consultations de la notice

82