How Far Has Globalization Gone? A Tale of Two Regions

By Rodolfo Campos, Samuel Pienknagura, Jacopo Timini

December 8, 2023

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Rodolfo Campos, Samuel Pienknagura, and Jacopo Timini. How Far Has Globalization Gone? A Tale of Two Regions, (USA: International Monetary Fund, 2023) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We study the evolution of trade globalization in a set of countries in Latin America (mostly the largest ones) and Asia over the past 25 years. Relying on structural gravity models, we first estimate a proxy of trade globalization that captures the ease of trading internationally with respect to trading domestically. Results indicate that the evolution of trade globalization since the mid-1990s has been similar between the two regions, but very heterogeneous within them. Trade globalization has been particularly strong in agriculture, mining and manufacturing, but has lagged in services. The paper also documents that trade globalization has been particularly strong in agriculture, mining and manufacturing, but it lagged in services. Within region heterogeneity is associated to a set of trade policy instruments, including tariffs, non-tariff measures, WTO membership. and trade agreements. Next, we quantify the economic implications of the estimated globalization trends. Simulations of a multi-sector trade model point to heterogeneous long-term impacts of globalization on GDP—some countries exhibiting substantial gains and others experiencing large losses—, with no single sector playing a preponderant role.

Subject: Agricultural sector, Economic sectors, Globalization, International trade, Manufacturing, Tariffs, Taxes, Trade policy

Keywords: Agricultural sector, Asia, Asia and Pacific, Caribbean, Global, Globalization, Globalization process, Globalization trend, IMF working paper 23/255, Latin America, Manufacturing, Model point, Structural gravity, Tariffs, Trade, Trade globalization, Trade policy

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2023/255
Stock No:

WPIEA2023255
ISBN:

9798400261190
ISSN:

1018-5941

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