Trade agreements and Latin American trade (creation and diversion) and welfare

Abstract

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Raising Markups To Survive: Small Spanish Firms During the Great Recession

“…The dataset presents a good coverage of the market economy. Interestingly, it covers the last few years of the expansionary period (2004)(2005)(2006)(2007), the crisis years (2008)(2009)(2010)(2011)(2012)(2013), and the first few years of the recovery (2014)(2015)(2016)(2017). The final dataset has approximately 3.8M firm-year observations, with about 300,000 firms per year on average.…”

“…In this equation, the dependent variable is the log difference in the firm-level markups of firm i from sector s between years t 0 and t, Δα t is,t 0 is the log change in the share of total sales of the firm represented by fixed inputs (including financial expenses, labour costs and other general expenses), and F inStress is,t 0 is a dummy variable indicating if the firm is under financial distress (identified as a point in time in which financial expenses are greater than profits). We explore three sub-periods: pre-crisis (2004)(2005)(2006)(2007), crisis (2007)(2008)(2009)(2010)(2011)(2012)(2013), and recovery (2013)(2014)(2015)(2016). To capture timeinvariant industry-specific characteristics that are common across firms, we control for industry fixed effects, λ j .…”

Do deep regional trade agreements facilitate regional production networks in Latin American and Caribbean countries?

“…Specifically, we include two leads and three lags of the depth indexes. In the absence of reverse causality (i.e., in the assumption of strict exogeneity), the coefficients of the leads should not be statistically different from zero (Kohl, 2014;Piermartini & Yotov, 2016;Sánchez-Albornoz & Timini, 2021;Yotov et al, 2016). In this specification, we estimate Equation ( 4) using consecutive-year data from 1987 to 2013, because we need to include the periods before and after the enforcement of the RTA of particular interest (i.e., the enforcement of MERCOSUR in 1991).…”

“…However, given that both studies define the depth of RTAs based on a simple categorization by the type of RTAs (e.g., CUs, FTAs, and PSAs), rather than the coverage and legal enforceability of WTO+ and WTO-X policy areas. Sánchez-Albornoz and Timini (2021) analyze the effects of all RTAs involving at least one of 21 LAC countries on bilateral exports among the 21 countries and their 32 major trading partners from 1984 to 2015. Considering heterogeneous effects of those RTAs by the characteristics of country-pairs, they find that RTAs among the LAC countries, particularly MERCOSUR and CAN, have positive and economically significant effects.…”

Eurozone prices: A tale of convergence and divergence

“…Social and welfare issues arise when long-term inflation differentials remain positive over time. Following Erosa and Ventura (2002), we can consider inflation as a regressive consumption tax, so countries with lower price levels would pay more to be part of the monetary 9 See Sturm et al (2009) for a review. 10 Our sample includes the financial crisis period.…”