Find counter arguments by entering NameVs… or …VsName.
The author or concept searched is found in the following 12 entries.
| Disputed term/author/ism | Author |
Entry |
Reference |
|---|---|---|---|
| Economic Development | Acemoglu | Acemogu I 83 Economic Development/Acemoglu/Robinson: Political and economic institutions, which are ultimately the choice of society, can be inclusive and encourage economic growth. Or they can be extractive and become impediments to economic growth. Nations fail when they have extractive economic institutions, supported by extractive political institutions that impede and even block economic growth. But this means that the choice of institutions - that is, the politics of institutions - is central to our quest for understanding the reasons for the success and failure of nations. >Institutions/Acemoglu, >Prosperity/Acemoglu, >Political Institutions/Acemoglu. Acemogu I 106 The divergent paths of English, French, and Spanish societies in the seventeenth century illustrate the importance of the interplay of small institutional differences with critical junctures. >Institutions/Acemoglu. During critical junctures, a major event or confluence of factors disrupts the existing balance of political or economic power in a nation. These can affect only a single country, such as the death of Chairman Mao Zedong in 1976, which at first created a critical juncture only for Communist China. Often, however, critical junctures affect a whole set of societies, in the way that, for example, colonization and then decolonization affected most of the globe. Such critical junctures are important because there are formidable barriers against gradual improvements, resulting from the synergy between extractive political and economic institutions and the support they give each other. For economic development see also >Economic growth/Acemoglu, >Technology/Acemoglu, >Economic Institutions/Acemoglu, >Political Institutions/Acemoglu. Acemoglu I 109 The richly divergent patterns of economic development around the world hinge on the interplay of critical junctures and institutional drift. Existing political and economic institutions - sometimes shaped by a long process of >institutional drift and sometimes resulting from divergent responses to prior >critical junctures - create the anvil upon which future change will be forged. E.g., the Black Death and the expansion of world trade after 1600 were both major critical junctures for European powers and interacted with different initial institutions to create a major divergence. Acemoglu I 272 Reversed development in developing countries: E.g., India: The East India Company looted local wealth and took over, and perhaps even intensified, the extractive taxation institutions of the Mughal rulers of India. This expansion coincided with the massive contraction of the Indian textile industry, since, after all, there was no longer a market for these goods in Britain. The contraction went along with de-urbanization and increased poverty. It initiated a long period of reversed development in India. Soon, instead of producing textiles, Indians were buying them from Britain and growing opium for the East India Company to sell in China. >Developing countries/Acemoglu. Africa: The Atlantic slave trade repeated the same pattern in Africa, even if starting from less developed conditions than in Southeast Asia and India. Many African states were turned into war machines intent on capturing and selling slaves to Europeans. The South African state created a dual economy, preventing 80 percent of the population from taking part in skilled occupations, commercial farming, and entrepreneurship. All this not only explains why industrialization passed by large parts of the world but also encapsulates how economic development may sometimes feed on, and even create, the underdevelopment in some other part of the domestic or the world economy. Acemoglu I 282 Development in individual countries: Australia, like the United states, experienced a different path to inclusive institutions than the one taken by England. ((s) For „inclusive institutions“ see >Terminology/Acemoglu.) The same revolutions that shook England during the Civil War and then the Glorious Revolution were not needed in the United States or Australia because of the very different circumstances in which those countries were founded—though this of course does not mean that inclusive institutions were established without any conflict, and, in the process, the United States had to throw off British colonialism. In England there was a long history of absolutist rule that was deeply entrenched and required a revolution to remove it. In the United States and Australia, there was no such thing. The inclusive institutions established in the United States and Australia meant that the Industrial Revolution spread quickly to these lands and they began to get rich. The path these countries took was followed by colonies such as Canada and New Zealand. Literature: The notion that the development of the rich countries of the West is the mirror image of the underdevelopment of the rest of the world was originally developed by Wallertsein (1974–2011)(1), though he emphasizes very different mechanisms than we do. 1.Wallerstein, Immanuel (1974–2011). The Modern World System. 4 Vol. New York: Academic Press. |
Acemoglu II James A. Acemoglu James A. Robinson Economic origins of dictatorship and democracy Cambridge 2006 Acemoglu I James A. Acemoglu James A. Robinson Why nations fail. The origins of power, prosperity, and poverty New York 2012 |
| Economic Development | Robinson | Acemogu I 83 Economic Development/Acemoglu/Robinson: Political and economic institutions, which are ultimately the choice of society, can be inclusive and encourage economic growth. Or they can be extractive and become impediments to economic growth. Nations fail when they have extractive economic institutions, supported by extractive political institutions that impede and even block economic growth. But this means that the choice of institutions - that is, the politics of institutions - is central to our quest for understanding the reasons for the success and failure of nations. >Institutions/Acemoglu, >Prosperity/Acemoglu, >Political Institutions/Acemoglu. Acemogu I 106 The divergent paths of English, French, and Spanish societies in the seventeenth century illustrate the importance of the interplay of small institutional differences with critical junctures. >Institutions/Acemoglu. During critical junctures, a major event or confluence of factors disrupts the existing balance of political or economic power in a nation. These can affect only a single country, such as the death of Chairman Mao Zedong in 1976, which at first created a critical juncture only for Communist China. Often, however, critical junctures affect a whole set of societies, in the way that, for example, colonization and then decolonization affected most of the globe. Such critical junctures are important because there are formidable barriers against gradual improvements, resulting from the synergy between extractive political and economic institutions and the support they give each other. For economic development see also >Economic growth/Acemoglu, >Technology/Acemoglu, >Economic Institutions/Acemoglu, >Political Institutions/Acemoglu. Acemoglu I 109 The richly divergent patterns of economic development around the world hinge on the interplay of critical junctures and institutional drift. Existing political and economic institutions - sometimes shaped by a long process of >institutional drift and sometimes resulting from divergent responses to prior >critical junctures - create the anvil upon which future change will be forged. E.g., the Black Death and the expansion of world trade after 1600 were both major critical junctures for European powers and interacted with different initial institutions to create a major divergence. Acemoglu I 272 Reversed development in developing countries: E.g., India: The East India Company looted local wealth and took over, and perhaps even intensified, the extractive taxation institutions of the Mughal rulers of India. This expansion coincided with the massive contraction of the Indian textile industry, since, after all, there was no longer a market for these goods in Britain. The contraction went along with de-urbanization and increased poverty. It initiated a long period of reversed development in India. Soon, instead of producing textiles, Indians were buying them from Britain and growing opium for the East India Company to sell in China. >Developing countries/Acemoglu. Africa: The Atlantic slave trade repeated the same pattern in Africa, even if starting from less developed conditions than in Southeast Asia and India. Many African states were turned into war machines intent on capturing and selling slaves to Europeans. The South African state created a dual economy, preventing 80 percent of the population from taking part in skilled occupations, commercial farming, and entrepreneurship. All this not only explains why industrialization passed by large parts of the world but also encapsulates how economic development may sometimes feed on, and even create, the underdevelopment in some other part of the domestic or the world economy. Acemoglu I 282 Development in individual countries: Australia, like the United states, experienced a different path to inclusive institutions than the one taken by England. ((s) For „inclusive institutions“ see >Terminology/Acemoglu.) The same revolutions that shook England during the Civil War and then the Glorious Revolution were not needed in the United States or Australia because of the very different circumstances in which those countries were founded—though this of course does not mean that inclusive institutions were established without any conflict, and, in the process, the United States had to throw off British colonialism. In England there was a long history of absolutist rule that was deeply entrenched and required a revolution to remove it. In the United States and Australia, there was no such thing. The inclusive institutions established in the United States and Australia meant that the Industrial Revolution spread quickly to these lands and they began to get rich. The path these countries took was followed by colonies such as Canada and New Zealand. Literature: The notion that the development of the rich countries of the West is the mirror image of the underdevelopment of the rest of the world was originally developed by Wallertsein (1974–2011)(1), though he emphasizes very different mechanisms than we do. 1.Wallerstein, Immanuel (1974–2011). The Modern World System. 4 Vol. New York: Academic Press. |
EconRobin I James A. Robinson James A. Acemoglu Why nations fail. The origins of power, prosperity, and poverty New York 2012 Robinson I Jan Robinson An Essay on Marxian Economics London 1947 Acemoglu II James A. Acemoglu James A. Robinson Economic origins of dictatorship and democracy Cambridge 2006 Acemoglu I James A. Acemoglu James A. Robinson Why nations fail. The origins of power, prosperity, and poverty New York 2012 |
| Factor Intensity Reversal (FIR) | Feenstra | Feenstra I 1- 15 Factor Intensity Reversal (FIR)/Feenstra: While FIR might seem like a theoretical curiosum, they are actually quite realistic. Consider the footwear industry, for example. Feenstra I 1- 16 While much of the footwear in the world is produced in developing nations, the United States retains a small number of plants. In sneakers, New Balance has a plant in Norridgewock, Maine, where employers earn some $14 per hour.* Some operate computerized equipment with up to 20 sewing machine heads running at once, while others operate automated stitchers guided by cameras, that allow one person to do the work of six. This is a far cry from the plants in Asia that produce shoes for Nike, Reebock and other U.S. producers, using century-old technology and paying less than $1 per hour. (…) when there are two possible solutions for the factor (…) then some countries can be at one equilibrium and others countries at the other. >Equilibrium. Equilibrium: How do we know which country is where? To answer this, it is necessary to consider the full-employment conditions: these will allow us to determine the factor prices prevailing in each country. Notice that we have now re-introduced a link between factor endowments (from the full-employment conditions) and factor prices, as we argued earlier in the one-sector model: when there are FIR in the two-by-two model, it will turn out that a laborabundant country will be at an equilibrium like point A, paying low wages, while a capitalabundant country will be at an equilibrium like point B, paying high wages. >Factor price, >Wages, >Production. Feenstra I 1-19 (…) when only one good is produced, then factor prices are determined by the marginal products of labor and capital as in the one-sector model, and will certainly depend on the factor endowments. This is why the Lemma stated above requires that both goods are produced, or equivalently, that the endowments are inside the “cone of diversification.” Now consider the more complex case (...) where we have re-drawn the two sets of gradient vectors (…) after multiplying each of them by the outputs of their respective industries. These vectors create two cones of diversification, labeled as cone A and cone B. Now we can answer the question of which factor prices will apply in any given country: a labor abundant economy, with a high ratio of labor/capital endowments (…) with low wages; whereas a capital abundant economy with a high ratio of capital/labor endowments (…) will have factor prices (…) with high wages. Thus, factor prices will depend on the endowments of the economy. A labor-abundant country such as China will pay low wages and a high rental (…). In contrast, a capital-abundant country such as the United States will have high wages and a low rental (…).** * The material that follows is drawn from Aaron Bernstein, “Low-Skilled Jobs: Do They Have to Move?”, Business Week, February 26, 2001, pp. 94-95. ** Empirical evidence on whether developed countries fit into the same cone is presented by deBaere and Demiroglu (2000)(1), and the presence of multiple cones is explored by Leamer (1987)(2), Harrigan and Zakrajšek (2000)(3), Schott (2000)(4) and Xu (2002)(5). 1. Debaere, Peter and Ufuk Demiroglu, 2000, “On the Similarity of Country Endowments and Factor Price Equalization for Developed Countries,” University of Texas, Austin, manuscript. 2. Leamer, Edward E., 1987, “Paths of Development in the 3-Factor, N-Good General Equilibrium Model,” Journal of Political Economy, 95, 961-999. 3. Harrigan, James and Egon Zakrajšek, 2000, “Factor Supplies and specialization in the World Economy,” NBER Working Paper no. 7848, August, and Federal Reserve Bank of New York Staff Report, no. 107, August. 4. Schott, Peter, 2000, “One Size Fits All? Heckscher-Ohlin Specialization in Global Production,” Yale University, manuscript. 5. Xu, Bin, 2002, “Capital Abundance and Developing Country Production Patterns,” University of Florida, manuscript. |
Feenstra I Robert C. Feenstra Advanced International Trade University of California, Davis and National Bureau of Economic Research 2002 |
| Factor Price Equalization Theorem | Feenstra | Feenstra I 1-20 Factor Price Equalization Theorem/Feenstra: Suppose that two countries are engaged in free trade, having identical technologies but different factor endowments. If both countries are diversified and FIR do not occur, then the factor prices (w, r) are equalized across these countries. Feenstra I 1-21 To illustrate this result, we engage in a thought experiment posed by Samuelson (1949)(1) and further developed by Dixit and Norman (1980)(2). Initially, suppose that labor and capital are free to move between the two countries until their factor prices are equalized. Then all that matters for factor prices are the world endowments of labor and capital, (…). The factor prices determine the demand for labor and capital in each industry, and using these, we can construct the diversification cone (since factor prices are the same across countries, then the diversification cone is also the same). Feenstra I 1-23 More generally, for any allocation of labor and capital within the parallelogram 0A10*A2 both countries remain diversified (producing both goods), and we can achieve the same equilibrium prices as in the “integrated world economy.” It follows that factor prices remain equalized across countries for allocations of labor and capital within the parallelogram 0A10*A2, which is referred to as the Factor Price Equalization (FPE) set. The FPE set illustrates the range of labor and capital endowments between countries for which factor price equalization is obtained. In contrast, for endowments outside of the FPE set such as point B’, then at least one country would have to be fully specialized in one good and FPE no longer holds. The FPE theorem is a remarkable result because it says that trade in goods has the ability to equalize factor prices: in this sense, trade in goods is a “perfect substitute” for trade in factors. We can again contrast this result with that obtained from a one-sector economy in both countries. In that case, equalization of the product price through trade would certainly not equalize factor prices: Feenstra I 1-24 the labor abundant country would be paying a lower wage. Why does this outcome not occur when there are two sectors? The answer is that the labor abundant country can produce more of, and export, the labor-intensive good. In that way it can fully employ its labor while still paying the same wages as a capital abundant country. In the two-by-two model, the opportunity to disproportionately produce more of one good than the other, while exporting the amounts not consumed at home, is what allows factor price equalization to occur. 1. Samuelson, Paul A., 1949, “International Factor Price Equalization Once Again,” Economic Journal, June, 181-197. Reprinted in Edward E. Leamer, ed. 2001, International Economics, New York: Worth Publishers, 19-32. 2. Dixit, Avinash and Victor Norman, 1980, Theory of International Trade. Cambridge University Press. |
Feenstra I Robert C. Feenstra Advanced International Trade University of California, Davis and National Bureau of Economic Research 2002 |
| Gravity Model (Economics) | Feenstra | Feenstra I 5-11 Gravity Model/Feenstra: In its simplest form, the gravity equation states that the bilateral trade between two countries is directly proportional to the product of the countries GDP’s. Thus, larger countries will tend to trade more with each other, and countries that are more similar in their relative sizes will also trade more. This equation performs extremely well empirically, as has been known since the original work of Tinbergen (1962)(1). >International trade, >Gross Domestic Product, >Monopolistic competition. Feenstra I 5-43 (…) the gravity equation arises quite naturally whenever countries are specialized in different goods. Such specialization is sometimes called “national product differentiation,” and cross-border trade in different varieties of a good is referred to as “intra-industry trade.” This occurs under the monopolistic competition model, but also occurs in other contexts, e.g. Dornbusch, Fischer, and Samuelson’s (1977)(2) Ricardian model with a continuum of goods, or their (1980)(3) Heckscher-Ohlin (HO) model where factor price are not equalized (…). >Heckscher-Ohlin. Davis (1995)(4) has combined Ricardian and HO elements to generate intra-industry trade in a model where product varieties have identical capital/labor ratios, but differ across countries by a Hicks-neutral productivity term.* Feenstra I 5-44 The fact that the gravity equation works well empirically cannot be taken as evidence in support of the monopolistic competition model, however: it simply suggests that countries are specialized in different products, for whatever reason.** * An elegant extension of Ricardian differences is provided by Eaton and Kortum (2001))(5), who consider stochastic differences in the technologies across countries, with the lowest cost country becoming the exporter of each product variety. They obtain a gravity-like equation, which should include country fixed effects that are related to the probability distribution of technologies within each country. ** Actually, Evenett and Keller (2002)(6) argue that even with incomplete specialization, a modified version of the gravity equation occurs in the HO model. It appears that this result depend on having just two countries, however, since otherwise the HO model makes no prediction at all about bilateral trade flows. Evenett and Keller test the increasing returns versus HO version of the gravity equation, and reject both in favor of a combined framework. 1. Tinbergen, Jan, 1962, Shaping the World Economy. New York: The Twentieth Century Fund. 2. Dornbusch, Rudiger, Stanley Fischer, and Paul A. Samuelson, 1977, Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods,” American Economic Review, 67(5), December, pages 823-39. 3. Dornbusch, Rudiger, Stanley Fischer, and Paul A. Samuelson, 1980, “Heckscher-Ohlin Trade Theory with a Continuum of Goods,” Quarterly Journal of Economics, 95(2), September, 203-24. 4. Davis, Donald R., 1995, “Intra-Industry Trade: A Heckscher-Ohlin-Ricardo Approach,” November, 39(3/4), 201-226. 5. Eaton, Jonathan and Samuel Kortum, 2001, “Technology, Geography and Trade,” Boston University, manuscript. 6. Evenett, S.J. and Keller, W. (2002) On Theories Explaining the Success of the Gravity Equation. Journal of Political Economy, 110, 281-316. https://doi.org/10.1086/338746 |
Feenstra I Robert C. Feenstra Advanced International Trade University of California, Davis and National Bureau of Economic Research 2002 |
| Hard Pegs | Congressional Research Service (CRS) | CRS I 4 Hard pegs/Marc Labonte/CRS: The alternative to floating exchange rates are exchange rate regimes that fix the value of the exchange rate to that of another country or countries. There are two broad types of fixed exchange rates. CRS I 5 “Hard pegs,” currency boards and currency unions, are considered first because they are the most stark example of a fixed exchange rate arrangement. The second category considered is fixed exchange rates, in which the link to the other currency or currencies is less direct, making them “soft pegs.” >Soft pegs. CRS I 5 At the opposite end of the spectrum from floating exchange rates are arrangements where a country gives up its exchange rate and monetary freedom entirely by tying itself to a foreign country’s currency, what former IMF Deputy Director Stanley Fischer calls “hard pegs.” This can be done through a currency board or a currency union.(1) >Currency board, >Currency union. CRS I 6 The primary economic advantage of a hard peg comes through greater trade with other members of the exchange rate arrangement. The volatility of floating exchange rates places a cost on the export and import-competing sectors of the economy. Greater trade is widely seen to be an engine of growth, particularly among developing countries. In a perfectly competitive world economy without transaction costs, the cost of exchange rate volatility could be very large indeed. For instance, U.S. exporters and domestic firms that compete with importers in 2000 faced one-third higher prices than in 1995 as a result of the (floating) dollar’s one-third appreciation against its main trading partners. Until the domestic price level fell by one-third, U.S. producers would be uncompetitive, if all else is equal. (All else was not equal - exports continued to rise in the 1990s despite the dollar’s appreciation.) Under a system of fixed exchange rates, U.S. exporters would not have been placed at this price disadvantage, all else being equal. Between small countries, a hard peg is also thought to promote more efficient and competitive markets through lower barriers to entry and greater economies of scale. Hard pegs also encourage international capital flows.(2) The encouragement of international capital flows can enhance a country’s welfare in a couple of ways. First, it allows more investment to take place in areas where saving is relatively scarce and rates of return are high, and investment is key to sustainable growth. This makes both the borrower and the investor better off; the former because more investment, and hence growth, is possible than otherwise would be, the latter because they can now enjoy higher rates of return on their investment for a given amount of risk than if limited to home investment. For developing countries, these investment gains can be quite large. CRS I 7 On the other hand, international capital flows can change rapidly in ways that can be destabilizing to developing countries (…) >Developing countries, >Floating exchange rates, >Fixed exchange rates, >Currency policy, >Currency. 1. For more information, see CRS Report RL31093, A Currency Board as an Alternative to a Central Bank, by Marc Labonte and Gail E. Makinen. 2. Hard pegs encourage foreign investment for slightly different reasons than they encourage trade. With trade, there is the danger under a floating exchange rate that a one-time appreciation will make your exporters uncompetitive until domestic prices adjust. Because the return on foreign investment is typically denominated in the foreign currency, a one-time exchange rate depreciation would lower the profitability of the investment held at the time of the depreciation. But it would have no effect on the profitability of new investment after the depreciation had ended. Congressional Research Service of the Library of congress (CRS) Fixed Exchange Rates and Floating Exchange Rates: What Have We Learned? RL31204 (2007) https://www.congress.gov/crs-product/RL31204 |
CRS I Congressional Research Service (CRS) Marc Labonte Fixed Exchange Rates and Floating Exchange Rates: What Have We Learned? Washington: Congressional Research Service of the Library of Congress 2007 CRS II Congressional Research Service (CRS) Paul Tierno Marc Labonte, Banking and Cryptocurrency: Policy Issues. CRS Congressional research Service Report R48430. Washington, DC. 2025 CRS III Congressional Research Service (CRS) Corrie E. Clark Heather L. Greenley, Bitcoin, Blockchain, and the Energy Sector. Washington, DC. 2019 CRS IV Congressional Reserch Service (CRS) Paul Tierno Cryptocurrency: Selected Policy Issues Congressional Reserch Service CRS Report R47425 Washington, DC. 2023 |
| Outsourcing | Feenstra | Feenstra I 4-2 Outcourcing/Feenstra: [There are] traded intermediate inputs, caused by firms splitting apart their production process across several countries. This is sometimes called “production sharing” by the companies involved, or simply “outsourcing.”* The idea that trade in intermediate inputs can have an effect on production and factor prices that is different from trade in final goods is gaining widespread acceptance among trade economists (…).** *Alternatively referred to as outsourcing (Katz and Murphy, 1992(1), Feenstra and Hanson, 1996(2)), de-localization (Leamer, 1996)(3), fragmentation (Jones and Keirzkowski, 1997, Arndt and Kierzkowski, 2000(4), Marjit and Acharyya, forthcoming), intra-product specialization (Arndt, 1997 and 1998a(5),b(6)), intra-mediate trade (Antweiler and Trefler, 2002(7)), vertical specialization (Hummels, Ishii, and Yi, 2001(8)), and slicing the value chain (Krugman, 1995(9)), this phenomena refers to the geographic separation of activities involved in producing a good (or service) across two or more countries. The term „production sharing” was coined by management consultant Peter Drucker (“The Rise of Production Sharing,” The Wall Street Journal, March 15, 1977). ** In addition to the references in the previous footnote, see the Ohlin lectures of Jones (2000)(10) and the recent article by Paul Samuelson (2001)(11). 1. Katz, Lawrence F. and Kevin M. Murphy, 1992, “Changes in Relative Wages, 1963- 1987: Supply and Demand Factors,” Quarterly Journal of Economics, 107, February, 35-78. 2. Feenstra, Robert C. and Gordon H. Hanson, 1996, “Foreign Investment, Outsourcing and Relative Wages,” in R.C. Feenstra, G.M. Grossman and D.A. Irwin, eds., The Political Economy of Trade Policy: Papers in Honor of Jagdish Bhagwati, MIT Press, 1996, 89-127. 3. Leamer, Edward E., 1996, “The Effects of Trade in Services, Technology Transfer and Delocalisation on Local and Global Income Inequality,” Asia-Pacific Economic Review, 2, 44-60. 4. Arndt, Sven and Henryk Kierzkowski, eds., 2001, Fragmentation: New Production and Trade Patterns in the World Economy, Oxford University Press, Oxford. 5. Arndt, Sven, 1998a, “Globalization and the Gains from Trade,” in K. Jaeger and K.-J. Koch, eds. Trade, Growth and Economic Policy in Open Economies. SpringerVerlag: New York. 6. Arndt, Sven, 1998b, “Super-Specialization and the Gains from Trade,” ContemporaryPolicy Issues, Western Economic Association, forthcoming. 7. Antweiler, Werner and Daniel Trefler, 2002, “Increasing Returns and All That: A View from Trade,” American Economic Review, 92(1), March, 93-119. 8. Hummels, David, Jun Ishii, and Kei-Mu Yi, 2001, “The Nature and Growth of Vertical Specialization in World Trade,” Journal of International Economics, 54, 75-96. 9. Krugman, Paul, 1995, “Growing World Trade: Causes and Consequences,” Brooking Paper on Economic Activity, 1, 327-362. 10. Jones, Ronald W., 2000, Globalization and the Theory of Input Trade. Ohlin Lectures, vol. 8. Cambridge and London: MIT Press. 11. Samuelson, Paul A., 2001, “The Ricardo-Sraffa Paradigm Comparing Gains from Trade in Inputs and Finished Products,” Journal of Economic Literature, 39, December, 1204-1214. |
Feenstra I Robert C. Feenstra Advanced International Trade University of California, Davis and National Bureau of Economic Research 2002 |
| Production Sharing | Feenstra | Feenstra I 4-2 Production Sharing/Feenstra: [There are] traded intermediate inputs, caused by firms splitting apart their production process across several countries. This is sometimes called “production sharing” by the companies involved, or simply “outsourcing.”* The idea that trade in intermediate inputs can have an effect on production and factor prices that is different from trade in final goods is gaining widespread acceptance among trade economists (…).** *Alternatively referred to as outsourcing (Katz and Murphy, 1992(1), Feenstra and Hanson, 1996(2)), de-localization (Leamer, 1996)(3), fragmentation (Jones and Keirzkowski, 1997, Arndt and Kierzkowski, 2000(4), Marjit and Acharyya, forthcoming), intra-product specialization (Arndt, 1997 and 1998a(5),b(6)), intra-mediate trade (Antweiler and Trefler, 2002(7)), vertical specialization (Hummels, Ishii, and Yi, 2001(8)), and slicing the value chain (Krugman, 1995(9)), this phenomena refers to the geographic separation of activities involved in producing a good (or service) across two or more countries. **The term „production sharing” was coined by management consultant Peter Drucker (“The Rise of Production Sharing,” The Wall Street Journal, March 15, 1977). 1. Katz, Lawrence F. and Kevin M. Murphy, 1992, “Changes in Relative Wages, 1963-1987: Supply and Demand Factors,” Quarterly Journal of Economics, 107, February, 35-78. 2. Feenstra, Robert C. and Gordon H. Hanson, 1996, “Foreign Investment, Outsourcing and Relative Wages,” in R.C. Feenstra, G.M. Grossman and D.A. Irwin, eds., The Political Economy of Trade Policy: Papers in Honor of Jagdish Bhagwati, MIT Press, 1996, 89-127. 3. Leamer, Edward E., 1996, “The Effects of Trade in Services, Technology Transfer and Delocalisation on Local and Global Income Inequality,” Asia-Pacific Economic Review, 2, 44-60. 4. Arndt, Sven and Henryk Kierzkowski, eds., 2001, Fragmentation: New Production and Trade Patterns in the World Economy, Oxford University Press, Oxford. 5. Arndt, Sven, 1998a, “Globalization and the Gains from Trade,” in K. Jaeger and K.-J. Koch, eds. Trade, Growth and Economic Policy in Open Economies. SpringerVerlag: New York. 6. Arndt, Sven, 1998b, “Super-Specialization and the Gains from Trade,” Contemporary Policy Issues, Western Economic Association, forthcoming. 7. Antweiler, Werner and Daniel Trefler, 2002, “Increasing Returns and All That: A View from Trade,” American Economic Review, 92(1), March, 93-119. 8. Hummels, David, Jun Ishii, and Kei-Mu Yi, 2001, “The Nature and Growth of Vertical Specialization in World Trade,” Journal of International Economics, 54, 75-96. 9. Krugman, Paul, 1995, “Growing World Trade: Causes and Consequences,” Brooking Paper on Economic Activity, 1, 327-362. |
Feenstra I Robert C. Feenstra Advanced International Trade University of California, Davis and National Bureau of Economic Research 2002 |
| Responsibility | Singer | I 220 Historical Responsibility/Climate Change/P. Singer: is the principle of "the polluter pays" applicable in the case of climate change? In the case of pollution, it surely is: a chemical company that emits toxins must be held accountable. In the case of carbon dioxide in the atmosphere, it can be observed that it is still present after a century. In this case, however, the polluter is not easily identified on an individual basis. >Climate Change, >Climate Costs, >Justice. I 221 However, it is possible to assign percentages of pollution to countries. >Emission permits, >Emission permits trading. Problem: when it comes to centuries, states are not to be regarded as constant individuals because the political map has changed. >Generational justice. One argument: one sometimes hears the argument that industrialisation has helped the whole world to increase prosperity, why should one not also bear the environmental damage together? >Progress, >History, >Technology. Vs: the concomitant rise in international trade, however, had made greater use of the industrialized nations. >Trade, >Markets, >World Economy. I 222 Argument: one sometimes hears the argument that the nations that caused them were not aware of the harmful effects. >Nations. Singer: That's true, before the 1970s, global warming was not seriously investigated. I 223 Singer: one has to take into account the size of the population. Even if we can only apply the principle of "You destroyed it, you have to fix it" when the biggest polluter knows about it, it remains that the United States and Europe must do most to repair the damage. I 231 Climate change/responsibility/individual/Singer, P.: what can I do as an individual? If I change my own behaviour, I can reduce the emission of greenhouse gases astonishingly far. However, this makes no measurable difference on a global scale. But if everyone did it, the effect would be measurable. Then it seems obvious that it is wrong for me personally not to abide by it. I 232 Question: How about if I orientate my behaviour towards that of other individuals and behave badly, as long as not too many others behave badly as well? Consequentialism: in this question, there is a difference between consequentialists and non-consequentialists. >Consequentialism. Rule Utilitarianism: would say: the best rule for the individual is not to commit an offence or not to put up with any damage to the community, even if it is not immediately measurable. >Utilitarianism. Utilitarianism/David Lyons: (D. Lyons 1965(1)): Thesis: In such cases, Rule Utilitarianism coincides with Action Utilitarianism. Both welcome and reject the same solutions. R. M. Hare: claims the same with reference to Kant's appeal to the idea of a universal right (> categorical imperative) and argues that this principle leads to utilitarianism.(2) I 233 Brad Hooker: (B. Hooker 2000)(3)): Hooker argues for a version of rule utilitarianism that prevents rules from becoming too complicated. He believes that we are acting wrongly if we break a rule that is part of a set of rules that, if internalised by an overwhelming majority of the population, would have the best consequences. If the rules became too complex, people would find it hard to internalize them. The cost of educating people would be too high. >Responsibility/Parfit, Responsibility/Ethics/Glover, J. 1. D. Lyons, Forms and Limits of Utilitarianism, Oxford, 1965. 2. R. M. Hare, „Could Kant have been a Utilitarian?“ Utilitas 5 (1993), pp. 1-16. 3. B. Hooker, Ideal Code, Real World (Oxford, 2000). |
SingerP I Peter Singer Practical Ethics (Third Edition) Cambridge 2011 SingerP II P. Singer The Most Good You Can Do: How Effective Altruism is Changing Ideas About Living Ethically. New Haven 2015 |
| Sanctions Debate | Itskhoki | Itskhoki I 7 Sanctions Debate/Itskhoki/Ribakova: (…) , to date, the most comprehensive case-by-case analysis of sanction episodes, together with key policy takeaways, remains "Economic Sanctions Reconsidered, 3rd Edition" by Gary Clyde Hufbauer, Jeffrey J. Schott, Kimberly Ann Elliott, and Barbara Oegg (2009)(1). David Baldwin's seminal work, "Economic Statecraft" (2020)(2), lays a comprehensive foundation, explaining the mechanisms and effectiveness of economic instruments in foreign policy. “War by Other Means: Geoeconomics and Statecraft” by Jennifer M. Harris and Robert D. Blackwill (2016)(3) emphasizes the growing importance of geoeconomics as a tool of statecraft in global politics. Juan Zarate's "Treasury's War" (2013)(4) complements this by providing a practical insider perspective on financial warfare post-9/11, underscoring the growing importance of financial instruments in modern statecraft. In addition, Chris Miller's "Chip War" (2022)(5) and Nicholas Mulder's "The Economic Weapon" (2023)(6) expand the discourse by exploring the strategic importance of the semiconductor industry and the historical evolution of sanctions, respectively. Agathe Demarais' "Backfire" (2022)(7) further examines the unintended consequences of U.S. sanctions, highlighting how they can reshape global alliances and economic landscapes. Similarly, "Underground Empire" (2023)(8) focuses on the US weaponizing its control of the critical nodes for achieving foreign policy and security objectives. Finally, Saleha Mohsin's "Paper Soldiers" (2024)(9) is recommended, providing a detailed examination of modern financial sanctions and adding contemporary relevance to the discourse. Itskhoki I 8 Sanctions against Russia: Regarding Russia’s specific case, some several papers and books explore the impact of sanctions on Russia (post-2014 and 2022). The most important among them include the working paper “Measuring Smartness: Understanding the Economic Impact of Targeted Sanctions”, which analyzes the economic effects of targeted or “smart sanctions” that aim to minimize harm to the general population and broader economy (Ahn and Ludema 2020)(10) that analyzes the economic effects of targeted or “smart sanctions” that aim to minimize harm to the general population and broader economy. Several papers by the Institute of International Finance take stock of Russia’s response to 2014 sanctions and its preparedness for the following sanctions. These papers also emphasize the critical importance of enforcement for the effectiveness of sanctions. “Punishing Putin” (Baker 2024)(11) provides a description of the global response to Russia's full-scale invasion of Ukraine in 2022, with a focus on the sanctions imposed on Vladimir Putin, his inner circle, and Russia’s economy. Effectivenss: Issues have been raised regarding the ineffectiveness of the oil price cap, including by the authorities themselves (Van Nostrand and Morris 2024)(12), and export controls. The early success of the oil price cap, which reduced Russian oil rents without destabilizing global prices, has since been overshadowed by a lack of enforcement (Hilgenstock et al. 2023)(13). A major challenge to price cap enforcement has been Russia’s buildup of a so-called “Shadow Fleet,” which is made up of oil tankers that are not owned, managed, or insured by entities that fall under the jurisdiction of the sanctions coalition (Hilgenstock, Hrybanovskii, and Kravtsev 2024)(14). Designations of Shadow Fleet vessels, particularly by the US Treasury Department’s Office of Foreign Assets Control (OFAC), have been an effective tool for reducing Russia’s ability to disregard the price cap without removing aggregate capacity from the market (Hilgenstock, Kravtsev, and Pavytska 2024)(15). The designation campaign remains limited in scope, however. Itskhoki I 9 Export controls: Room for improvement is most notable in corporate responsibility - where Know Your Customer-like regulations could reduce illicit flows through third party intermediaries - intra-coalition coordination and harmonization, and institution building (Bilousova et al. 2024)(16). Russia’s inability to substitute for goods, particularly high-tech electronics, from entities in the sanctioning coalition highlights the unrealized potential of export controls. Theoretical literature: Sanctions on Russia in 2014 and 2022, as well as earlier rounds of sanctions on Iran, have spurred an active quantitative and theoretical literature on the topic. Felbermayr et al. (2019)(17) build a dataset of information on sanctions between 1950-2016 to analyze the effect of sanctions on trade flows and real GDP change (see also Gutmann et al. 2023). Hausmann et al. (2024)(18) provide a criterion for sectoral bans on Russian exports at a detailed industry level. De Souza et al. (2024)(19) examine the most cost-efficient policies for imposing trade sanctions. Crozet and Hinz (2020)(20) quantify the economic impact of the sanctions imposed on Russia in 2014 using a gravity model, as well as the implied costs to sender countries. Ghironi et al. (2024(21)) use a quantitative model to study macroeconomic and trade impacts of sanctions on financial markets, energy, and differentiated goods for both sender and receiver countries. Kilian et al. (2024)(22) examines the impact of the 2022 oil embargo and price cap on Russian oil prices using a calibrated model of the global oil market. Nigmatulina (2023)(23) examines the effects of "smart sanctions" imposed by the US and EU on specific Russian firms and individuals following Russia's annexation of Crimea in 2014, and finds that these firms have increased their operations due to a reallocation of government resources towards them (see also Keerati 2023)(24). Balyuk and Fedyk (2023)(25) examines the decision and its financial consequences for the U.S. firms to exit Russian operations following the 2022 invasion of Ukraine. Ndiaye (2024) studies how international boycotts, as a form of consumer activism, differ from government-imposed sanctions and tariffs. >Sanctions, >Sanctions consequences, >Sanctions debate, >Sanctions effectiveness, >Sanctions evasion, >Sanctions history, >Sanctions policies, >Sanctions theory, >Trade sanctions, >Financial sanctions, >Payment systems. 1. Hufbauer, Gary Clyde, Jeffrey J. Schott, Kimberly Ann Elliott, and Barbara Oegg. 2009. Economic Sanctions Reconsidered: Third Edition. Peterson Institute for International Economics. 2. Baldwin, David A. 2020. Economic Statecraft: New Edition. Princeton University Press. 3. Blackwill, Robert D., and Jennifer M. Harris. 2016. War by Other Means: Geoeconomics and Statecraft. Harvard University Press. https://www.jstor.org/stable/j.ctt1c84cr7. 4. Zarate, Juan. 2013. Treasury’s War. PublicAffairs 5. Miller, Chris. 2022. Chip War: The Fight for the World’s Most Critical Technology. Scribner. 6. Mulder, Nicholas. 2023. The Economic Weapon: The Rise of Sanctions as a Tool of Modern War. Yale University Press. 7. Demarais, Agathe. 2022. Backfire: How Sanctions Reshape the World Against U.S. Interests. Columbia University Press. 8. Farrell, Henry, and Abraham L. Newman. 2023. Underground Empire: How America Weaponized the World Economy. Random House. 9. Mohsin, Saleha. 2024. Paper Soldiers: How the Weaponization of the Dollar Changed the WorldOrder. Portfolio. 10. Ahn, Daniel P., and Rodney D. Ludema. 2020. “The Sword and the Shield: The Economics of Targeted Sanctions.” European Economic Review 130 (November):103587. https://doi.org/10.1016/j.euroecorev.2020.103587. 11. Baker, Stephanie. 2024. Punishing Putin. Scribner. 12. Van Nostrand, Eric, and Anna Morris. 2024. “Phase Two of the Price Cap on Russian Oil: Two Years After Putin’s Invasion.” U.S. Department of the Treasury. February 23, 2024. https://home.treasury.gov/news/featured-stories/phase-two-of-the-price-cap-on-russianoil-two-years-after-putins-invasion. 13. Hilgenstock, Benjamin, Elina Ribakova, Nataliia Shapoval, Tania Babina, Oleg Itskhoki, and Maxim Mironov. 2023. “Russian Oil Exports Under International Sanctions.” SSRN Scholarly Paper. Rochester, NY. https://doi.org/10.2139/ssrn.4430053. 14. Hilgenstock, Benjamin, Oleksii Hrybanovskii, and Anatoliy Kravtsev. 2024. “Assessing Russia’s Shadow Fleet: Initial Build-Up, Links to the Global Shadow Fleet, and Future Prospects.” KSE Institute. https://sanctions.kse.ua/wp-content/uploads/2024/06/Global-ShadowFleet-June-2024.pdf. 15. Hilgenstock, Benjamin, Anatoliy Kravtsev, and Yuliia Pavytska. 2024. “The Core of Russia’s Shadow Fleet: Identifying Targets for Future Tanker Designations.” KSE Institute. 16. Bilousova, Olena, Benjamin Hilgenstock, Elina Ribakova, Nataliia Shapoval, Anna Vlasyuk, and Vladyslav Vlasiuk. 2024. “Challenges of Export Controls Enforcement: How Russia Continues to Import Components for Its Military Production.” Yermak-McFaul International Working Group on Russian Sanctions & KSE Institute. 17. Felbermayr, Gabriel J., Constantinos Syropoulos, Erdal Yalcin, and Yoto V. Yotov. 2019. “On the Effects of Sanctions on Trade and Welfare: New Evidence Based on Structural Gravity and a New Database.” Working Paper. CESifo Working Paper 7728. Rochester, NY. https://doi.org/10.2139/ssrn.3422152. 18. Hausmann, Ricardo, Ulrich Schetter, and Muhammed A Yildirim. 2024. “On the Design of Effective Sanctions: The Case of Bans on Exports to Russia.” Economic Policy 39 (117): 109–53. https://doi.org/10.1093/epolic/eiad043. 19. De Souza, Gustavo, Naiyuan Hu, Haishi Li, and Yuan Mei. 2024. “(Trade) War and Peace: How to Impose International Trade Sanctions.” Journal of Monetary Economics 146 (September):103572. https://doi.org/10.1016/j.jmoneco.2024.103572. 20. Crozet, Matthieu, and Julian Hinz. 2020. “Friendly Fire: The Trade Impact of the Russia Sanctions and Counter-Sanctions.” Economic Policy 35 (101): 97–146. https://doi.org/10.1093/epolic/eiaa006. 21. Ghironi, Fabio, Daisoon Kim, and G. Kemal Ozhan. 2024. “International Trade and Macroeconomic Dynamics with Sanctions.” Working Paper. NBER Working Paper 32188. National Bureau of Economic Research. https://doi.org/10.3386/w32188. 22. Kilian, Lutz, David Rapson, and Burkhard C. Schipper. 2024. “The Impact of the 2022 Oil Embargo and Price Cap on Russian Oil Prices.” Working Paper. FRB of Dallas Working Paper 2401. Rochester, NY. https://doi.org/10.24149/wp2401. 23. Nigmatulina, Dzhamilya. 2023. “Sanctions and Misallocation. How Sanctioned Firms Won and Russia Lost.” Working Paper. 24. Keerati, Ritt. 2022. “The Unintended Consequences of Financial Sanctions.” Working Paper. Rochester, NY. https://doi.org/10.2139/ssrn.4049281. 25. Balyuk, Tetyana, and Anastassia Fedyk. 2023. “Divesting under Pressure: U.S. Firms’ Exit in Response to Russia’s War against Ukraine.” Journal of Comparative Economics 51 (4): 1253–73. https://doi.org/10.1016/j.jce.2023.08.001. |
Itskhoki I Oleg Itskhoki Elina Ribakova The Economics of Sanctions: From Theory Into Practice. Brookings Papers on Economic Activity, Fall 2024. The Brookings Institution 2024 |
| Sanctions Debate | Ribakova | Itskhoki I 7 Sanctions Debate/Itskhoki/Ribakova: (…) , to date, the most comprehensive case-by-case analysis of sanction episodes, together with key policy takeaways, remains "Economic Sanctions Reconsidered, 3rd Edition" by Gary Clyde Hufbauer, Jeffrey J. Schott, Kimberly Ann Elliott, and Barbara Oegg (2009)(1). David Baldwin's seminal work, "Economic Statecraft" (2020)(2), lays a comprehensive foundation, explaining the mechanisms and effectiveness of economic instruments in foreign policy. “War by Other Means: Geoeconomics and Statecraft” by Jennifer M. Harris and Robert D. Blackwill (2016)(3) emphasizes the growing importance of geoeconomics as a tool of statecraft in global politics. Juan Zarate's "Treasury's War" (2013)(4) complements this by providing a practical insider perspective on financial warfare post-9/11, underscoring the growing importance of financial instruments in modern statecraft. In addition, Chris Miller's "Chip War" (2022)(5) and Nicholas Mulder's "The Economic Weapon" (2023)(6) expand the discourse by exploring the strategic importance of the semiconductor industry and the historical evolution of sanctions, respectively. Agathe Demarais' "Backfire" (2022)(7) further examines the unintended consequences of U.S. sanctions, highlighting how they can reshape global alliances and economic landscapes. Similarly, "Underground Empire" (2023)(8) focuses on the US weaponizing its control of the critical nodes for achieving foreign policy and security objectives. Finally, Saleha Mohsin's "Paper Soldiers" (2024)(9) is recommended, providing a detailed examination of modern financial sanctions and adding contemporary relevance to the discourse. Itskhoki I 8 Sanctions against Russia: Regarding Russia’s specific case, some several papers and books explore the impact of sanctions on Russia (post-2014 and 2022). The most important among them include the working paper “Measuring Smartness: Understanding the Economic Impact of Targeted Sanctions”, which analyzes the economic effects of targeted or “smart sanctions” that aim to minimize harm to the general population and broader economy (Ahn and Ludema 2020)(10) that analyzes the economic effects of targeted or “smart sanctions” that aim to minimize harm to the general population and broader economy. Several papers by the Institute of International Finance take stock of Russia’s response to 2014 sanctions and its preparedness for the following sanctions. These papers also emphasize the critical importance of enforcement for the effectiveness of sanctions. “Punishing Putin” (Baker 2024)(11) provides a description of the global response to Russia's full-scale invasion of Ukraine in 2022, with a focus on the sanctions imposed on Vladimir Putin, his inner circle, and Russia’s economy. Effectivenss: Issues have been raised regarding the ineffectiveness of the oil price cap, including by the authorities themselves (Van Nostrand and Morris 2024)(12), and export controls. The early success of the oil price cap, which reduced Russian oil rents without destabilizing global prices, has since been overshadowed by a lack of enforcement (Hilgenstock et al. 2023)(13). A major challenge to price cap enforcement has been Russia’s buildup of a so-called “Shadow Fleet,” which is made up of oil tankers that are not owned, managed, or insured by entities that fall under the jurisdiction of the sanctions coalition (Hilgenstock, Hrybanovskii, and Kravtsev 2024)(14). Designations of Shadow Fleet vessels, particularly by the US Treasury Department’s Office of Foreign Assets Control (OFAC), have been an effective tool for reducing Russia’s ability to disregard the price cap without removing aggregate capacity from the market (Hilgenstock, Kravtsev, and Pavytska 2024)(15). The designation campaign remains limited in scope, however. Itskhoki I 9 Export controls: Room for improvement is most notable in corporate responsibility - where Know Your Customer-like regulations could reduce illicit flows through third party intermediaries - intra-coalition coordination and harmonization, and institution building (Bilousova et al. 2024)(16). Russia’s inability to substitute for goods, particularly high-tech electronics, from entities in the sanctioning coalition highlights the unrealized potential of export controls. Theoretical literature: Sanctions on Russia in 2014 and 2022, as well as earlier rounds of sanctions on Iran, have spurred an active quantitative and theoretical literature on the topic. Felbermayr et al. (2019)(17) build a dataset of information on sanctions between 1950-2016 to analyze the effect of sanctions on trade flows and real GDP change (see also Gutmann et al. 2023). Hausmann et al. (2024)(18) provide a criterion for sectoral bans on Russian exports at a detailed industry level. De Souza et al. (2024)(19) examine the most cost-efficient policies for imposing trade sanctions. Crozet and Hinz (2020)(20) quantify the economic impact of the sanctions imposed on Russia in 2014 using a gravity model, as well as the implied costs to sender countries. Ghironi et al. (2024(21)) use a quantitative model to study macroeconomic and trade impacts of sanctions on financial markets, energy, and differentiated goods for both sender and receiver countries. Kilian et al. (2024)(22) examines the impact of the 2022 oil embargo and price cap on Russian oil prices using a calibrated model of the global oil market. Nigmatulina (2023)(23) examines the effects of "smart sanctions" imposed by the US and EU on specific Russian firms and individuals following Russia's annexation of Crimea in 2014, and finds that these firms have increased their operations due to a reallocation of government resources towards them (see also Keerati 2023)(24). Balyuk and Fedyk (2023)(25) examines the decision and its financial consequences for the U.S. firms to exit Russian operations following the 2022 invasion of Ukraine. Ndiaye (2024) studies how international boycotts, as a form of consumer activism, differ from government-imposed sanctions and tariffs. >Sanctions, >Sanctions consequences, >Sanctions debate, >Sanctions effectiveness, >Sanctions evasion, >Sanctions history, >Sanctions policies, >Sanctions theory, >Trade sanctions, >Financial sanctions. 1. Hufbauer, Gary Clyde, Jeffrey J. Schott, Kimberly Ann Elliott, and Barbara Oegg. 2009. Economic Sanctions Reconsidered: Third Edition. Peterson Institute for International Economics. 2. Baldwin, David A. 2020. Economic Statecraft: New Edition. Princeton University Press. 3. Blackwill, Robert D., and Jennifer M. Harris. 2016. War by Other Means: Geoeconomics and Statecraft. Harvard University Press. https://www.jstor.org/stable/j.ctt1c84cr7. 4. Zarate, Juan. 2013. Treasury’s War. PublicAffairs 5. Miller, Chris. 2022. Chip War: The Fight for the World’s Most Critical Technology. Scribner. 6. Mulder, Nicholas. 2023. The Economic Weapon: The Rise of Sanctions as a Tool of Modern War. Yale University Press. 7. Demarais, Agathe. 2022. Backfire: How Sanctions Reshape the World Against U.S. Interests. Columbia University Press. 8. Farrell, Henry, and Abraham L. Newman. 2023. Underground Empire: How America Weaponized the World Economy. Random House. 9. Mohsin, Saleha. 2024. Paper Soldiers: How the Weaponization of the Dollar Changed the WorldOrder. Portfolio. 10. Ahn, Daniel P., and Rodney D. Ludema. 2020. “The Sword and the Shield: The Economics of Targeted Sanctions.” European Economic Review 130 (November):103587. https://doi.org/10.1016/j.euroecorev.2020.103587. 11. Baker, Stephanie. 2024. Punishing Putin. Scribner. 12. Van Nostrand, Eric, and Anna Morris. 2024. “Phase Two of the Price Cap on Russian Oil: Two Years After Putin’s Invasion.” U.S. Department of the Treasury. February 23, 2024. https://home.treasury.gov/news/featured-stories/phase-two-of-the-price-cap-on-russianoil-two-years-after-putins-invasion. 13. Hilgenstock, Benjamin, Elina Ribakova, Nataliia Shapoval, Tania Babina, Oleg Itskhoki, and Maxim Mironov. 2023. “Russian Oil Exports Under International Sanctions.” SSRN Scholarly Paper. Rochester, NY. https://doi.org/10.2139/ssrn.4430053. 14. Hilgenstock, Benjamin, Oleksii Hrybanovskii, and Anatoliy Kravtsev. 2024. “Assessing Russia’s Shadow Fleet: Initial Build-Up, Links to the Global Shadow Fleet, and Future Prospects.” KSE Institute. https://sanctions.kse.ua/wp-content/uploads/2024/06/Global-ShadowFleet-June-2024.pdf. 15. Hilgenstock, Benjamin, Anatoliy Kravtsev, and Yuliia Pavytska. 2024. “The Core of Russia’s Shadow Fleet: Identifying Targets for Future Tanker Designations.” KSE Institute. 16. Bilousova, Olena, Benjamin Hilgenstock, Elina Ribakova, Nataliia Shapoval, Anna Vlasyuk, and Vladyslav Vlasiuk. 2024. “Challenges of Export Controls Enforcement: How Russia Continues to Import Components for Its Military Production.” Yermak-McFaul International Working Group on Russian Sanctions & KSE Institute. 17. Felbermayr, Gabriel J., Constantinos Syropoulos, Erdal Yalcin, and Yoto V. Yotov. 2019. “On the Effects of Sanctions on Trade and Welfare: New Evidence Based on Structural Gravity and a New Database.” Working Paper. CESifo Working Paper 7728. Rochester, NY. https://doi.org/10.2139/ssrn.3422152. 18. Hausmann, Ricardo, Ulrich Schetter, and Muhammed A Yildirim. 2024. “On the Design of Effective Sanctions: The Case of Bans on Exports to Russia.” Economic Policy 39 (117): 109–53. https://doi.org/10.1093/epolic/eiad043. 19. De Souza, Gustavo, Naiyuan Hu, Haishi Li, and Yuan Mei. 2024. “(Trade) War and Peace: How to Impose International Trade Sanctions.” Journal of Monetary Economics 146 (September):103572. https://doi.org/10.1016/j.jmoneco.2024.103572. 20. Crozet, Matthieu, and Julian Hinz. 2020. “Friendly Fire: The Trade Impact of the Russia Sanctions and Counter-Sanctions.” Economic Policy 35 (101): 97–146. https://doi.org/10.1093/epolic/eiaa006. 21. Ghironi, Fabio, Daisoon Kim, and G. Kemal Ozhan. 2024. “International Trade and Macroeconomic Dynamics with Sanctions.” Working Paper. NBER Working Paper 32188. National Bureau of Economic Research. https://doi.org/10.3386/w32188. 22. Kilian, Lutz, David Rapson, and Burkhard C. Schipper. 2024. “The Impact of the 2022 Oil Embargo and Price Cap on Russian Oil Prices.” Working Paper. FRB of Dallas Working Paper 2401. Rochester, NY. https://doi.org/10.24149/wp2401. 23. Nigmatulina, Dzhamilya. 2023. “Sanctions and Misallocation. How Sanctioned Firms Won and Russia Lost.” Working Paper. 24. Keerati, Ritt. 2022. “The Unintended Consequences of Financial Sanctions.” Working Paper. Rochester, NY. https://doi.org/10.2139/ssrn.4049281. 25. Balyuk, Tetyana, and Anastassia Fedyk. 2023. “Divesting under Pressure: U.S. Firms’ Exit in Response to Russia’s War against Ukraine.” Journal of Comparative Economics 51 (4): 1253–73. https://doi.org/10.1016/j.jce.2023.08.001. |
Itskhoki I Oleg Itskhoki Elina Ribakova The Economics of Sanctions: From Theory Into Practice. Brookings Papers on Economic Activity, Fall 2024. The Brookings Institution 2024 |
| Sanctions Theory | Morgan | Morgan I 13 Sanctions Theory/Morgan/Syropoulos/Yotov: From a methodological perspective, many studies aiming to estimate the impact of sanctions on target states face problems of endogeneity in the following sense: events that instigate the sanctioning of target countries - for example, civil or interstate conflicts or violations of human rights - may also shape the economic effects we observe. Surprisingly, much of the extant literature has bypassed this issue. Gutmann, Neuenkirch, and Neumeier (2020)(1) and Kwon, Syropoulos, and Yotov (2022a)(2) are recent exceptions. Capitalizing on certain dimensions of sanctions, these studies have addressed the issue of endogeneity; for example, by considering flexible instruments related to laws and regulations in sanctioning states that are independent of events in sanctioned states. It is important for future studies of the effects of sanctions to recognize the endogeneity problem and tackle it directly, either with existing methods or with new strategies. So far, interest among academics in the impact of economic sanctions on senders has been limited, perhaps because this impact tends to be relatively small. A possible explanation for relative disinterest may rest in the fact that the economies of most sanctioning states are considerably larger than the economies of the targeted states, which tends to weaken bilateral economic dependence. Moreover, in most cases, senders that are threatened with reciprocal countersanctions can divert economic activity toward third, nonsanctioned states. Morgan I 14 In addition, senders may design and/or implement sanctions with a view toward minimizing, or at least mitigating, the possibly adverse impact of sanctions on their constituencies. The current sanctions on Russia are a prominent example: some countries decided not to impose sanctions on it, and others failed to enforce their declared sanctions fully. Naturally, sender efforts to minimize their own costs raise deep questions about the effectiveness, enforcement, and credibility of their sanctions policies (Lektzian and Sprecher 2007)(3). Despite the eagerness and ability of senders to minimize the negative impact of sanctions on their own economies, recent quantitative analyses provide some evidence for the presence of such negative effects due to significantly decreased economic activities between senders and targets (Besedeš, Goldbach, and Nitsch 2021)(4). Nonetheless, these effects do not translate into a significant impact on senders due to several factors, including the intensified economic relationships among sanctioning and nonsanctioned countries (often called “trade diversion”), the disproportionate size between the primary sanctioners and targeted states, and the possible backsliding by some sender countries in a sanctioning coalition. Thus, consistent with the earlier literature (for example, Farmer 2000(5)), recent evidence suggests that the impact of sanctions on sender states tends to be small and short-lived. However, this does not necessarily imply that the costs of sanctions to senders would be small if the targets are economically large and powerful. Notwithstanding the limited impact of sanctions on senders, we see several promising directions for future work in this area. First, from a methodological perspective, the ability of senders to select an optimal mix of sanction tools and to design sanctions in a way that maximizes the economic damage on targets while minimizing the cost on the senders should be a key feature of theoretical models on sanctions. A second direction that may be interesting to explore, both theoretically and empirically, is related to the possibility that senders may issue “fake” sanctions based on political pronouncements aiming to camouflage their economic motives. Thus, the imposition of sanctions may be intended to provide gains for the sender rather than to fulfill the declared political objectives of sanctioning. This story is also consistent with the notion that sanctions may be issued to serve the interests of specific interest groups (Kaempfer and Lowenberg 2007)(6). Third, the cost of sanctions among members in coalitions of senders may be shared disproportionately. This suggests a role for the adoption of reliable redistributional mechanisms within sender coalitions aimed at sharing the burden of sanctions, with implications for improvements in the design, implementation, and effectiveness of multilateral sanctions. In addition to affecting senders and targets, sanctions may also affect third countries. Although these effects have been examined by policymakers and covered extensively in the media, they have attracted relatively little attention in the academic literature. One can identify two distinct and opposing channels through which sanctions may affect third countries: (1) the “extraterritorial” channel, which is a direct channel that normally transmits an adverse effect on third countries; and (2) the “general equilibrium” channel, which is an indirect channel through which sanctions generate (usually) positive effects on third countries. Morgan I 15 Equilibrium: The intuition behind the general equilibrium effects of sanctions and their impact on third countries is familiar and easy to understand. Economic activities that are disrupted by sanctions can intensify commercial, financial, and other relationships with third countries that serve as a substitute for forgone business opportunities. For example, after the imposition of sanctions on Russia in 2022, imports of Russian oil by India and China soared. These effects can be quantified, because the economics literature has developed tools to capture such general equilibrium effects (Haidar 2017(7); Besedeš, Goldbach, and Nitsch 2021(4)). >Sanctions, >Sanctions consequences, >Sanctions debate, >Sanctions effectiveness, >Sanctions evasion, >Sanctions history, >Sanctions policies, >Sanctions theory, >Trade sanctions, >Financial sanctions. 1. Gutmann, Jerg, Matthias Neuenkirch, and Florian Neumeier. 2020. “Precision-Guided or Blunt? The Effects of US Economic Sanctions on Human Rights.” Public Choice 185 (1-2): 161–82. Haidar, Jamal I. 2017. “Sanctions and Export Deflection: Evidence from Iran.” Economic Policy 32 (90): 319–55. 2. Kwon, Ohyun, Constantinos Syropoulos, and Yoto V. Yotov. 2022a. “Do Sanctions Affect Growth?” Drexel University, School of Economics Working Paper Series 2022-6. 3. Lektzian, David J., and Christopher M. Sprecher. 2007. “Sanctions, Signals, and Militarized Conflict,” American Journal of Political Science 51 (2): 415–31. 4. Besedeš, Tibor, Stefan Goldbach, and Volker Nitsch. 2021. “Cheap Talk? Financial Sanctions and Nonfinancial Firms.” European Economic Review 134: 103688. 5. Farmer, Richard D. 2000. “Costs of Economic Sanctions to the Sender.” World Economy 23 (1): 93–117. 6. Kaempfer, William H. and Anton D. Lowenberg. 2007. “The Political Economy of Economic Sanctions.” In Handbook of Defense Economics, Vol. 2, edited by Todd Sandler and Keith Hartley, 867–911. Amsterdam: Elsevier. 7. Haidar, Jamal I. 2017. “Sanctions and Export Deflection: Evidence from Iran.” Economic Policy 32 (90): 319–55. |
Morgan I T. Clifton Morgan Constantinos Syropoulos Yoto V. Yotov, "Economic Sanctions: Evolution, Consequences, and Challenges." Journal of Economic Perspectives 37 (1): 3–30. 2023 |
| |||
No results. Please choose an author or concept or try a different keyword-search.