Reduced Export Multiplier of the Korean Economy
In: KIET Industrial Economic Review, Band 22 No. 6
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In: KIET Industrial Economic Review, Band 22 No. 6
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In: History of economics review, Band 28, Heft 1, S. 62-71
ISSN: 1838-6318
Abstract. This paper revisits the standard multiplier-accelerator model, as advanced by Samuelson. While borrowing on the main assumptions of the multiplier-accelerator, we check the validity of Keynesian theory. Using higher-order difference equations and advanced-level mathematical techniques we solve the tax-augmented multiplier-accelerator model, as well as the open economy one. We find that the values of equilibrium national income are identical to the simple national-income model in the absence of the accelerator. We solve the simple multiplier-accelerator model both in present terms and withprolonged consumption. We solve for equilibrium consumption, tax, and imports which are unaffected by the accelerator. All results conform to Keynesian theory where investment, government spending and exports have a favorable multiplying effect on national income through their respective multipliers. The accelerator coefficient affects neither those multipliers, nor the income and the non-income tax multipliers. Expanding the multiplier-accelerator by the volume of foreign trade, taxation or both does not change the values of Keynesian variables. Adding an accelerator leaves optimal values unaffected but, more importantly, reinforces Keynesian theory.Keywords. Multiplier, Accelerator, Open economy, Difference equations, Keynesian national-income model, Tax multiplier, Exports multiplier.JEL. E12, C02, E21, E22.
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This paper studies the relationship between export policy and food prices. We show that, when individuals are loss averse, food exporters may use trade policy to shield the domestic economy from large price shocks. This creates a complementarity between the price of food in international markets and export policy. Specifically, unilateral actions by exporting countries give rise to a multiplier effect: when a shock in the international food market drives up (down) its price, governments respond by imposing export restrictions (subsidies), thus exacerbating the initial shock and soliciting further export activism. We test this theory with a new dataset that comprises monthly information on trade measures across 125 countries and 29 food products for the period 2008-10, finding evidence of a multiplier effect. Global restrictions in a product (i.e. the share of international trade covered by export restrictions) are positively correlated with the probability of imposing a new export restriction on that product, especially for staple foods. Large exporters are found to be more reactive to restrictive measures, suggesting that the multiplier effect is mostly driven by this group. Finally, we estimate that a 1 per cent surge in global restrictions increased international food prices by 1.1 per cent on average during 2008-10. These findings contribute to inform the broader debate on the proper regulation of export policy within the multilateral trading system.
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This paper studies the relationship between export policy and food prices. We show that, when individuals are loss averse, food exporters may use trade policy to shield the domestic economy from large price shocks. This creates a complementarity between the price of food in international markets and export policy. Specifically, unilateral actions by exporting countries give rise to a multiplier effect: when a shock in the international food market drives up (down) its price, governments respond by imposing export restrictions (subsidies), thus exacerbating the initial shock and soliciting further export activism. We test this theory with a new dataset that comprises monthly information on trade measures across 125 countries and 29 food products for the period 2008-10, finding evidence of a multiplier effect. Global restrictions in a product (i.e. the share of international trade covered by export restrictions) are positively correlated with the probability of imposing a new export restriction on that product, especially for staple foods. Large exporters are found to be more reactive to restrictive measures, suggesting that the multiplier effect is mostly driven by this group. Finally, we estimate that a 1 per cent surge in global restrictions increased international food prices by 1.1 per cent on average during 2008-10. These findings contribute to inform the broader debate on the proper regulation of export policy within the multilateral trading system.
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In: CESifo Working Paper Series No. 3783
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Working paper
The COVID-19 pandemic has caused a significant slowdown in the development of almost all economies in the world. In this context, the main goal of this research is to try to present changes in the value of fiscal, investment and export multipliers as a result of the COVID-19 pandemic. The research was conducted in selected European Union countries. They are France, Germany, Italy, Poland, Portugal and Spain. This research is based on the theory of effective demand. The values of feeds and leakages of total demand in the period from 2015 to 2020 were examined and calculated. On this basis, the individual multipliers of autonomous spending were analyzed and their changes in the first period of the COVID-19 pandemic were presented. The analyses led to a surprising conclusion: it found that the autonomous spending multipliers in some economies increased. This means that they have become 'security buffers' for the health of economies. This means that the increase in their value weakened the negative effects of changes in autonomous expenditure on gross domestic product.
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In: Canadian journal of economics and political science: the journal of the Canadian Political Science Association = Revue canadienne d'économique et de science politique, Band 11, Heft 1, S. 35-47
The following analysis is primarily concerned with definite mathematical expressions of the relationship between export and national income values in Canada as it developed during the inter-war period, with an attempt to measure the export multiplier and the influence of the barter terms of trade upon the national income, and to make tentative projections into the future.The mathematical expressions for this relationship are alternatively based (1) on the time series for exports and national income and (2) on the deviations from the linear trends of exports and national income over the period 1923-38. The year 1939 is omitted as the war distorted the relationship even then. The years prior to 1923 are eliminated as their inclusion would lead to inverse correlations in individual cases owing to disturbances in currency relations, abnormal lags and leads in the equilibration of the respective balances of payment, and sudden shifts in the proportional evolution of domestic and foreign markets in the countries concerned.
In: IMF Working Papers v.Working Paper No. 14/182
This paper studies the relationship between trade policy and food prices. We show that, when individuals are loss averse, governments may use trade policy to shield the domestic economy from large food price shocks. This creates a complementarity between the price of food in international markets and trade policy. Specifically, unilateral actions give rise to a ""multiplier effect"": when a shock drives up the price of food, exporters respond by imposing restrictions while importers wind down protection, thus exacerbating the initial shock and soliciting further trade policy activism. We test
In: IMF Working Paper No. 14/182
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In: KIET Occasional Paper No. 106
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In: http://hdl.handle.net/11427/14303
Bibliography: leaves 24-26. ; In the literature on regional economics various models have been developed to study the causes of economic growth and income fluctuations within a region. One of the best known models is that of the export base. The validity and general applicability of this model was first emphasised by North (1955), though Tiebout (1956) subsequently refuted it by claiming that factors other than exports may have a strong effect on the growth of a region. These factors included private investment, government expenditure and productivity increases amongst local industries. The North-Tiebout debate focuses essentially on the difference between the long-run and the short-run sources of regional economic growth. The North-Tiebout debate was followed by two main approaches: one based on the Keynesian income-expenditure approach and the other on input-output analysis. This essay is concerned with the application of the Keynesian approach within the context of a two-region economy. Section 2 provides a review of the literature on the export base and Keynesian approaches. This is followed, in section 3, by a discussion of Hartman and Seckler's application of dynamic analysis to the regional economy. Section 4 then shows how the Keynesian model can be adapted and applied to a two- region dynamic framework. Finally, in section 5, the stability conditions of the Keynesian model are examined, while final conclusions are drawn in section 6.
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The paper starts with examining the standard concept of government expenditure multiplier and finds that in a model of open economy with government revenues and expenditures the multiplier definition is incorrect in so far as the import intensity component relates total imports to GDP, whereas part of imports serves as inputs in exported output. Therefore the value of imports should be related to the value of final output, which is the sum of domestic absorption and exports. Since for most countries final output is significantly larger than GDP, the value of the multiplier is correspondingly larger. Moreover, the paper argues that, the import intensity of exports being as a rule larger than that of domestic absorption, the import intensity of the latter - which is the import intensity relevant for the government expenditure multiplier - is lower than that of final output, which again raises the value of the multiplier. Next the value of the government expenditure multiplier in Poland in 2006-2008 is estimated on the basis of statistics of non-financial quarterly accounts by institutional sectors. The variations in the value of multiplier are found to depend heavily on changes in import intensity of domestic absorption. The value of the multiplier ranges between 1.59 and 1.70 if, in order to reduce the impact of seasonal fluctuations, it is calculated on a quarterly basis, for four consecutive quarters, and between 1.62 and 1.86 if, in order to make the calculations more suitable for economic forecasting, the quarterly coefficients year on year are used. Both sets of multiplier values are slightly higher than those assumed in other countries (1.5-1.6) which may be explained by the rather high import intensity of Polish exports.
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In: Prohorovs, Anatolijs. 2023. Re-Export: Assessing the Impact of Re-Export Companies on Sectors and the Economy. Journal of Risk and Financial Management 16: 77. https://doi.org/10.3390/jrfm16020077
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