No Double Standards: Quantifying the Impact of Standard Harmonization on Trade Staff Working Paper 2019-36 Julia Schmidt, Walter Steingress Product standards are omnipresent in industrialized societies. Though standardization can be beneficial for domestic producers, divergent product standards have been categorized as a major obstacle to international trade. This paper quantifies the effect of standard harmonization on trade flows and characterizes the extent to which it changes the cost and demand structure of exporting. Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, International topics JEL Code(s): F, F1, F13, F14, F15, L, L1, L15
Exchange Rates, Retailers, and Importing: Theory and Firm-Level Evidence Staff Working Paper 2019-34 Alex Chernoff, Patrick Alexander We develop a model with firm heterogeneity in importing and cross-border shopping among consumers. Exchange-rate appreciations lower the cost of imported goods, but also lead to more cross-border shopping; hence, the net impact on aggregate retail prices and sales is ambiguous. Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, International topics, Service sector JEL Code(s): F, F1, F10, F14, L, L8, L81
The Impact of a Trade War: Assessment of the Current Tariffs and Alternative Scenarios Staff Analytical Note 2019-20 Karyne B. Charbonneau This note uses Charbonneau and Landry’s (2018) framework to assess the direct impact of the current trade tensions on the Canadian and global economies, as well as possible implications if the conflict escalates further. Overall, my findings show that the estimated impact of current tariffs on real gross domestic product (GDP) remains relatively small, which is in line with the literature on gains from trade, but the impact on trade is much larger. Content Type(s): Staff research, Staff analytical notes Topic(s): Recent economic and financial developments, Trade integration JEL Code(s): F, F1, F11, F13, F14, F15, F5, F50, F6, F62, F68
The Trade War in Numbers Staff Working Paper 2018-57 Karyne B. Charbonneau, Anthony Landry We build upon new developments in the international trade literature to isolate and quantify the long-run economic impacts of tariff changes on the United States and the global economy. Content Type(s): Staff research, Staff working papers Topic(s): Recent economic and financial developments, Trade integration JEL Code(s): F, F1, F11, F13, F14, F15, F5, F50, F6, F62, F68
Market Size and Entry in International Trade: Product Versus Firm Fixed Costs Staff Working Paper 2018-43 Walter Steingress This paper develops a theoretical framework to infer the nature of fixed costs from the relationship between entry patterns in international markets and destination market size. If fixed costs are at the firm level, firms take advantage of an intrafirm spillover by expanding firm-level product range (scope). Content Type(s): Staff research, Staff working papers Topic(s): Firm dynamics, International topics, Trade integration JEL Code(s): F, F1, F12, F14, F2, F23
Estimating the Impacts of Tariff Changes: Two Illustrative Scenarios Staff Analytical Note 2018-29 Karyne B. Charbonneau, Anthony Landry We build upon new developments in the international trade literature to construct a quantitative Ricardian framework similar to Caliendo and Parro (2015) to isolate and estimate the long-run economic impacts of tariff changes. Content Type(s): Staff research, Staff analytical notes Topic(s): Recent economic and financial developments, Trade integration JEL Code(s): F, F1, F11, F13, F14, F15, F5, F50, F6, F62, F68
Responding to the First Era of Globalization: Canadian Trade Policy, 1870–1913 Staff Working Paper 2018-42 Ian Keay, Patrick Alexander In this paper we document Canada’s trade policy response to late-nineteenth- and earlytwentieth-century globalization. We link newly digitized annual product-specific data on the value of Canadian imports and duties paid from 1870–1913 to establishment-specific production and location information drawn from the manuscripts of the 1871 industrial census. Content Type(s): Staff research, Staff working papers Topic(s): Economic models, International topics, Trade integration JEL Code(s): F, F1, F13, F14, F4, F42, F6, F60, N, N7, N71
Weakness in Non-Commodity Exports: Demand versus Supply Factors Staff Analytical Note 2018-28 José Dorich, Vadym Lepetyuk, Jonathan Swarbrick We use the Terms-of-Trade Economic Model (ToTEM) to conduct demand- and supply-driven simulations, both of which deliver weakness in Canadian non-commodity exports relative to foreign activity in line with recent data. Content Type(s): Staff research, Staff analytical notes Topic(s): International topics, Monetary policy, Recent economic and financial developments, Trade integration JEL Code(s): E, E5, E52, F, F1, F10, F14, F17
Decomposing Canada’s Market Shares: An Update Staff Analytical Note 2018-26 Nicholas Labelle Building on the shift-share analysis of Barnett and Charbonneau (2015), this note decomposes Canada’s market shares in the United States, Europe and China for imports of non-energy goods into competitiveness, preference shifts and an interaction term. We find that, despite the depreciation of the dollar, Canada continued to lose market share over 2014–17 (around 0.4 percentage points lost per year on average over four years). Content Type(s): Staff research, Staff analytical notes Topic(s): International topics JEL Code(s): F, F1, F10, F14, F4
What Is Restraining Non-Energy Export Growth? Staff Analytical Note 2018-25 Dany Brouillette, José Dorich, Chris D'Souza, Adrienne Gagnon, Claudia Godbout This note summarizes the key findings from Bank of Canada staff analytical work examining the reasons for the recent weakness in Canadian non-energy exports. Canada steadily lost market share in US non-energy imports between 2002 and 2017, mostly reflecting continued and broad-based competitiveness losses. Content Type(s): Staff research, Staff analytical notes Topic(s): International topics, Monetary policy, Recent economic and financial developments, Trade integration JEL Code(s): E, E5, E52, F, F1, F10, F14, F17