Economic Booms, Trade Deficits, and Economic Policy

Many economic booms have been accompanied by real exchange rate appreciations, large trade defcits -which have sometimes persisted after the return to the initial exchange rate parity- and a deteriorating traded sector. Those circumstances have typically raised the question of the de-sirability of some stabilization policy. We show that the dynamics induced by an expected productivity shock in an economy where the capital stock is non-mobile across sectors, match those circumstances. Furthermore, we obtain that credit market imperfections tend to exacerbate trade deficits, and to cause an inefficient capacity reduction in the traded sector. Some stabilization policies are explored.

Economic booms, trade deficits and economic policy

Many economic booms have been accompanied by realexchange rate appreciations, large trade defcits -whichhave sometimes persisted after the return to the initialexchange rate parity- and a deteriorating traded sector.Those circumstances have typically raised the questionof the de-sirability of some stabilization policy. We show that the dynamics induced by an expectedproductivity shock in an economy where the capital stockis non-mobile across sectors, match those circumstances.Furthermore, we obtain that credit market imperfectionstend to exacerbate trade deficits, and to cause aninefficient capacity reduction in the traded sector.Some stabilization policies are explored.

Trade deficit : hearing before the Subcommittee on International Trade of the Committee on Finance, United States Senate, Ninety-eighth Congress, second session, March 23, 1984.

Item 1038-A, 1038-B (microfiche)

The knowledge gap: A perspective on trade, industry, technology and policy from pre-war Australian music technology manufacturing (1903-30)

Australia struggles to achieve economic competitiveness, prevent expansion of the trade deficit and develop value-added production despite applications of policy strategies from protectionism to trade liberalisation. This article argues that these problems were emerging at the turn of the century, and that an investigation of music technology manufacturing in the first two decades of this century reveals fundamental problems in the conduct of relevant policy analysis. Analysis has focused on the trade or technology gap which is only symptomatic of an underlying knowledge gap. The article calls for a knowledge policy approach which can allow protection without the negative effects of isolation from global markets and without having to resort to unworkable utopian free-trade dogma. A shift of focus from a 'goods traded' view to a knowledge transaction (or diffusion) perspective is advocated.

A partial success of trade cooperation within the ‘16+1’ formula: the case of food exports to China. OSW COMMENTARY #189, 2015-10-29

When in 2012 China approached the countries of Central and Eastern Europe (CEE) with a proposal of cooperation in the ‘16+1’ formula, it declared it was willing to meet the needs of CEE countries. Beijing had been aware of the political importance of the problem of trade deficit (which has been ongoing for years) and launched cooperation with the governments of 16 CEE countries to boost imports from these states. The years 2011–2014 brought an improvement in the balance of trade between China and: Hungary, Latvia, the Czech Republic, Romania, Bulgaria and Croatia. The remaining ten CEE countries recorded an increase in their trade deficits. Changes in CEE countries’ balance of trade with China resulted only slightly from political actions. Instead, they were due to the macroeconomic situation and to a deterioration of the debt crisis in the EU which, for example, caused a decline in the import of Chinese goods in some of these countries. Multilateral trade cooperation was successfully developed in the entire region only in the agricultural and food production sector – the area of greatest interest to China. The pace of bilateral cooperation with specific countries varied, with the fastest being Poland, Latvia, Romania, Hungary and Bulgaria. Actions by governments of CEE countries resulted in Chinese market opening up to hundreds of local companies which, in turn, translated into an increase in the volume of foodstuffs sold by ‘the 16’ to China from US$ 137 million in 2011 to US$ 400 million in 2014. The success achieved in the agricultural and food production sector has demonstrated the effectiveness of trade cooperation in the ‘16+1’ formula. It is, however, insufficient to generate a significant improvement of the trade balance. At present, the sector’s share in the total volume of goods sold to China by CEE states is a mere 3.7%, and any reduction of the trade deficit would require long-term and more comprehensive solutions still to be implemented by the governments of individual CEE states.

Impact of U.S.-China trade relations on workers, wages, and employment : pilot study report /

"June 30, 2001."

Information Society in Croatia, Landsc@pes of Knowledge for Development

Sabbatical Studies Report

Geração do conhecimento através da especificação de produtos químicos

Technological innovation connects competitiveness and knowledge. In Brazil, knowledge is mainly concentrated in the universities which undertake R&D. This article aims to show the importance of Brazilian university extension activities, which transfer knowledge to society, contributing, in the case of the chemical sector, to a reduction in the country's total trade deficit of around US$8.5 billion, which is result of the importation of innumerable products. On the other hand, developed countries are resorting to technical barriers, which impose documentation and regulations based on testing products for conformity with standards. This demands a technical and scientific infrastructure, concentrated in the universities.

Polissacarídeos da biodiversidade brasileira: uma oportunidade de transformar conhecimento em valor econômico

A brief comment about general characteristics of polysaccharide was presented. Brazilian trade of polysaccharides was obtained from the "Ministério de Desenvolvimento, Indústria e Comércio Exterior" - Brazil. A list of these products was prepared and their price and amount analyzed in the period of 1998-2007. Some chemical properties and application of polysaccharides from our biodiversity was described. In this review they were classified by origin, in vegetal (exudate, seed, fruit, seaweed), animal and bacteria source. There is a trade deficit that can be reverted if part of the accumulated scientific knowledge was used to promote the national economic development in the field.

De aromas e perfumes, o mercado da indústria do "cheiro"

Several flavors and fragrances (F&F) companies hold the economic leadership in the market, although not always have also the leadership in patent applications. The ranking of technological production in the fragrance area still remains with industries while scientific knowledge is equally shared between industries and academia. Contextualizing Brazil in this scene, despite all scientific expertise gained over the years, brazilian technological park is still at the beginning of the production of technologies applied directly to the F&F industries. The dependence on foreign technologies is remarkable as indicated by the great trade deficit in this sector.

Políticas productivas y competitividad industrial: El caso de Argentina y Brasil

This article aims, on the one hand, to analyze the increase of productive asymmetries between Argentina and Brazil that have been evidencing during the last two decades, and are currently reveled in the structural trade deficit of industrial products that affects Argentina in the bilateral relationship. On the other hand, it intends to contribute to understanding the roots of these asymmetries based on the differences in the public policies implemented by both countries during the period extending from the implementation of the Mercosur, in the early 1990s, until 2008. The focus is set on the technological pattern of industrial production and trade structures, considering a non neutral impact over the long term development.