Emerging Economies in Global Trade
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This document discusses emerging economies in global trade. It covers topics such as South-South trade between developing economies, international specialization patterns of countries, dynamics of specialization over time such as China's evolution, the phenomenon of hyper-specialization where countries specialize in a small number of products, and questions remaining around explaining hyper-specialization and its implications.
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Emerging Economies in Global Trade
- 1. LOGO Econ 366 Group: Bryce Hollingsworth, Meiyi Cheng, Daniel Mena, James Hill
- 2. Emerging Economies in Global Trade South-South Trade International Specialization Dynamics in Specialization Hyper-specialized Exporters Final Discussion Econ 366 LOGO
- 3. South-South Trade Urbanization and industrialization in China and India Increased demand for raw materials Developing economies are the supply sources Growth has deepened global production networks Increased cross-border flows Econ 366 LOGO
- 4. South-South Trade Exports from low-income countries to low- and middle-income markets have risen dramatically From 1994-2008, 24% to 42%, with China and India accounting for half of this growth Exports from middle-income countries to low- and middle-income markets have also risen From 33% to 46%, with China and India accounting for two-fifths of this growth Econ 366 LOGO
- 5. South-South Trade Growth in South-South trade is a major part of the recent global trade boom Falling trade barriers and expanding global production networks have contributed to Southern trade growth However, they are insufficient on their own to explain why trade to GDP ratios have risen so much in low- and middle-income countries Econ 366 LOGO
- 6. International Specialization 9 non-oil exports in this paper 1. Agriculture and food products 2. Minerals and other raw materials 3. Footwear, apparel, and textiles 4. Metals 5. Chemicals 6. Machinery 7. Electronics 8. Transportation equipment 9. Other manufactures Econ 366 LOGO
- 7. International Specialization Page 7 Econ 366 LOGO
- 8. International Specialization LOGO Page 8
- 9. A closer look at China – Dynamics of Specialization LOGO
- 10. Hyper-Specialized Exporters What we have seen Country specialization by broad sector appears to be consistent with standard models of comparative advantage. Over a period of time, specialization patterns tend to evolve rapidly most likely due to factor accumulation. (Ex. China) Econ 366 LOGO
- 11. What is Hyper-specialization? It involves breaking up a sector that is already being specialized and going into more depth in each of the new parts (PowerPoint example). In their research, they found that low- and middle- income countries have a fine degree of specialization in a relatively small number of products. This specific type of hyper-specialization does not fit standard trade models easily. Econ 366 LOGO
- 12. What is Hyper-specialization? LOGO
- 13. What is Hyper-specialization? LOGO
- 14. Not just Low-income Countries Specialization is not solely a function of having small economies. Middle income economies also hyper-specialize (2008 Examples). Exports of most countries are concentrated in a small number of goods. Econ 366 LOGO
- 15. What Explains Hyper- Specialization in Exporting? Melitz model(2003) that incorporates Heckscher- Ohlin model? Not quite Eaton and Kortum(2002) take on the Ricardian model? Rodik, Easterly, and Reshef(2009). Ideal Model. Econ 366 LOGO
- 16. Final Discussion Middle-income nations are transforming the global economy Questions need to be answered: How much of the recent growth in global trade represents real value added? What explains hyper-specialization in exporting? Is China’s government pushing the country up the product ladder? What effect has the global commodity boom had on living standards in low-income countries? Econ 366 LOGO
- 17. Group: Bryce Hollingsworth, Meiyi Cheng, Daniel Mena, James Hill