The Global Labor Market Impact of Emerging Giants: A Quantitative Assessment

Levchenko, Andrei A.; Zhang, Jing

doi:10.1057/imfer.2013.16

Cited by 11 publications

(5 citation statements)

References 47 publications

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“…() assert that, among all other regions, East and South Asian economies benefit the most (0.32%), whereas SSA and LAC countries benefit the least (0.08 and 0.09%, respectively). Only 9 out of 75 countries experience welfare losses from China's gains, which has also been confirmed by Levchenko and Zhang (), who argue that East and South Asia gain the most (0.7%), whereas Latin America and the Caribbean gain the least (0.16%) from the trade integration of China, India, and Central and Eastern Europe.…”

Section: Global Influencesupporting

confidence: 63%

“…() suggest that the increased variety and improved quality of Chinese and Indian exports can substantially promote world welfare. Levchenko and Zhang () analyse how the trade integration of emerging giants, namely, China, India, and Central and Eastern Europe, affects the aggregate and sectorial welfare gains of the world between 2005 and 2007. They reveal that the aggregate welfare gains to the rest of the world are 0.37%.…”

Section: Global Influencementioning

confidence: 99%

“…Labour‐intensive manufacturings, such as the textiles, clothing, and apparel industries in which China has comparative advantages are negatively affected the most by China's growth (IMF, ; Ghosh and Rao, ; Levchenko and Zhang, ). Levchenko and Zhang () simulations show that the trade integration of China, India, and Central and Eastern Europe to the world market will trigger absolute welfare losses (from 1.5 and 3.5%) for the leather and footwear, wearing apparel, furniture and textile industries. Similarly, Ghosh and Rao () indicate that Canada, the United States and Europe all suffer losses in their textile and apparel industries upon the removal of the MFA quota.…”

Section: Global Influencementioning

confidence: 99%

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China's Global Influence: A Survey through the Lens of International Trade

Qiu

Zhan

2016

Pacific Economic Review

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Abstract. One of the most impressive changes in the global economy in the past half-century has been China's high and sustained growth and its integration into the global economy. This phenomenal change not only brings huge benefits to the Chinese people, but also exerts a tremendous influence on the rest of the world. How large is China's influence on the global economy? How are various countries/regions affected differently? How are various industries in a country affected differently? Answering these questions is not simple. In this paper, we review the recent literature that attempts to answer these questions. The findings of the survey conducted in this study aim to provide a complete picture of China's global influence and to identify issues that require further analysis.

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Section: Global Influencesupporting

confidence: 63%

Section: Global Influencementioning

confidence: 99%

Section: Global Influencementioning

confidence: 99%

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China's Global Influence: A Survey through the Lens of International Trade

Qiu

Zhan

2016

Pacific Economic Review

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“…For example, Hsieh and Ossa (2011) study the spillover e¤ects of China's growth on other countries; di Giovanni, Levchenko, and Zhang (2014) study the global welfare impact of China's trade integration and technological change; Levchenko and Zhang (2013) investigate the impact of trade with emerging countries on labour markets; Burstein and Vogel (2012) and Parro (2013) study the e¤ect of international trade on the skill premium; Caliendo, Rossi-Hansberg, Parro, and Sarte (2013) study the impact of regional productivity changes on the U.S. economy, and so on. None of these applications, however, focuses on the impact of openness to trade on volatility.…”

Section: Introductionmentioning

confidence: 99%

Diversification through Trade

Caselli

Koren

Lisicky

et al. 2015

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A widely held view is that openness to international trade leads to higher GDP volatility, as trade increases specialization and hence exposure to sector-specific shocks. We revisit the common wisdom and argue that when country-wide shocks are important, openness to international trade can lower GDP volatility by reducing exposure to domestic shocks and allowing countries to diversify the sources of demand and supply across countries. Using a quantitative model of trade, we assess the importance of the two mechanisms (sectoral specialization and cross-country diversification) and provide a new answer to the question of whether and how international trade affects economic volatility. Francesco Caselli Department of Economics London School of Economics I IntroductionAn important question at the crossroads of macro-development and international economics is whether and how openness to trade a¤ects macroeconomic volatility. A widely held view in academic and policy discussions, which can be traced back at least to Newbery and Stiglitz (1984), is that openness to international trade leads to higher GDP volatility. The origins of this view are rooted in a large class of theories of international trade predicting that openness to trade increases specialization. Because specialization (or lack of diversi…cation) in production tends to increase a country's exposure to shocks speci…c to the sectors (or range of products) in which the country specializes, it is generally inferred that trade increases volatility. This view seems present in policy circles, where trade openness is often perceived as posing a trade-o¤ between the …rst and second moments (i.e., trade causes higher productivity at the cost of higher volatility). 1This paper revisits the common wisdom on two conceptual grounds. First, the paper points out that the existing wisdom is strongly predicated on the assumption that sectorspeci…c shocks (hitting a particular sector) are the dominant source of GDP volatility. The evidence, however does not support this assumption. Indeed, country-speci…c shocks (shocks common to all sectors in a given country) are at least as important as sector-speci…c shocks in shaping countries'volatility patterns (e.g. Koren and Tenreyro, 2007). The …rst contribution of this paper is to show analytically that when country-speci…c shocks are an important source of volatility, openness to international trade can lower GDP volatility. In particular, openness reduces a country's exposure to domestic shocks, and allows it to diversify its 1 See for example the report on "Economic openness and economic prosperity: trade and investment analytical paper" (2011), prepared by the U.K. Department of International Development.2 sources of demand and supply, leading to potentially lower overall volatility. This is true as long as the volatility of shocks a¤ecting trading partners are not too big, or the covariance of shocks across countries is not too large. In other words, we show that the sign and size of the e¤ect of openness on volati...

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“…Trade reforms lead to reallocation of resources across sectors, occupations and firms as specialisation patterns respond to changes in relative prices. For instance, Levchenko and Zhang (2013) show that if factors of production are immobile across sectors, the integration of China, India and the Central and Eastern European countries into the world trade system may have increased aggregate welfare in the rest of the world by 0.4%, but factor incomes in individual sectors may fall or rise by more than 5%.…”

mentioning

confidence: 99%