Judicial quality, input customisation, and trade margins: the role of product quality

We study how the contracting environment affects the quality of trade. A better contracting environment not only induces specialisations in industries intensively using customised inputs, but also causes quality upgrading of domestic varieties and tougher competition in these industries. We incorporate these effects into a Ricardian model with customised input and product quality. Our model predicts that better judicial quality raises a country’s import prices and quality more in contract-intensive products, but has no impacts on its export prices or quality. We empirically confirm these predictions, and find that rising judicial quality is associated with increasing specialisations in contract-intensive industries.

Exchange Rate Pass-Through into Japanese Import Prices: Evidence at Both Bilateral and Product Levels

This study investigates the degree of the exchange rate pass-through to Japanese bilateral import prices at the product level for major Japan's trading partners (US, EU, and Asian NIEs) for a period (1998:1-2010:12) dubbed as Japan's lost decade and marked by a gradual the exchange rate appreciation against the US dollar. By considering both country and product dimensions in a unified framework, this study makes one of the first attempts to analyze the responsiveness of Japanese import prices to exchange rate movement. The empirical analysis suggests a declining exchange rate pass-through to Japanese import prices at the bilateral level in some product categories but increasing in others. However, we find no evidence of the changes in exchange rate pass-through for manufacturing, machinery, and overall product level for each of these partners. Our finding sheds light on the recent decline in exchange rate pass-through to Japanese multilateral import prices and helps calibrate its trade relationship with its partner countries.

Two-Sided Market Power in Firm-to-Firm Trade

Firms in global value chains (GVCs) are granular and exert bargaining power over the terms of trade. We show that these features are crucial to understanding the well-established variation in prices and pass-through across importers and exporters. We develop a novel theory of prices in GVCs, which tractably nests a wide range of bilateral concentration and bargaining power configurations. We test and evaluate the models predictions using a novel dataset merging transaction-level U.S. import data with balance sheet data for both U.S. importers and foreign exporters. Our pricing framework enhances traditional frameworks in the literature in accurately predicting price changes following a tariff shock. The results shed light on the role of firms in determining the tariff pass-through onto import prices.

PRODUCTION, CONSUMPTION AND PRICE (IMPORTS, PRODUCERS AND CONSUMER) VOLATILITY OF SHALLOT IN PROBOLINGGO REGENCY

Changes in production, consumption, and import variables cause the price of shallots to fluctuate. A high and unpredictable price fluctuation increasing the volatility problem. This phenomenon gives results in risk, uncertainty and leading to a decline in the welfare of producers and consumers. Based on the description of the problems above, it is important to analyze price, production, import, and consumption volatility to determined the level of risk and uncertainty faced by producers and consumers. This study uses monthly secondary data (time series) on production, price, imports, and consumption of shallots in Probolinggo Regency, for seven years (2013-2019). The ARCH/GARCH method is used to analyze the volatility of prices, production and consumption. The results from the analysis are the production variable has a low level of volatility, the consumption and import prices have high-level volatility, producer price has low-level volatility, while consumer prices has-high level volatility. From the results means that the risks and uncertainties faced by producers in conducting shallot cultivation are low. While for the consumer means the risks and uncertainties in consuming shallots are high.

Impacts of the FLEGT Action Plan and the EU Timber Regulation on EU Trade in Timber Product

The EU Timber Regulation (EUTR) is a key element in the efforts of the European Union to curb the trade in illegal timber products. This study helps to remedy the lack of systematic, statistical analysis of the EUTR’s potential impacts on international trade in timber products. Using cointegration intervention—or shock—models we quantify potential shifts in import prices and quantities of tropical hardwood lumber and oak lumber after the entry into effect of the EUTR. We further estimate import demand models to assess the relation between temperate and tropical hardwood products and whether there was a structural change in demand elasticities after the entry into force of the EUTR. The shock model analysis indicates, for most of the bilateral trade flows where we observe cointegration and a significant shock variable, increasing import prices and decreasing import quantities of tropical hardwood lumber following the EUTR start date, consistent with a contraction of the supply of tropical timber. The results of the import demand models do not give a clear indication as to whether oak lumber is a complementary or substitute product for tropical hardwood lumber, and there are no clear signs of structural changes in demand elasticities. Aside from the analysis, an important contribution of the paper is the procedure for building a long and homogeneous time series of tropical hardwood lumber.

Exchange Rates and Prices: Evidence from the 2015 Swiss Franc Appreciation

We dissect the impact of a large and sudden exchange rate appreciation on Swiss border import prices, retail prices, and consumer expenditures on domestic and imported nondurable goods, following the removal of the EUR/CHF floor in January 2015. Cross-sectional variation in border price changes by currency of invoicing carries over to consumer prices and allocations, impacting retail prices of imports and competing domestic goods, as well as import expenditures. We provide measures of the sensitivity of retail import prices to border prices and the sensitivity of import shares to relative prices, which is higher when using retail prices than border prices. (JEL E21, E31, F14, F31, L11)

Gas transportation system development in Mongolia under gas prices uncertainty

The paper analyses the stability of a solution to a problem of gas transportation system development in terms of gas import prices. The object of the study is a future gas transportation system in Mongolia. The employed tools are based on an original optimization problem, which is aimed to support decision-making process when choosing capacity, location, and time for investments in gas infrastructure. Different scenarios of gas import prices are considered for Mongolia. A stable solution is defined as the solution that is included in the optimal plans for every scenario. A multi-criteria approach is proposed to expanding the area of stable solutions. In conclusion, the priority areas of gas transportation system development in Mongolia are highlighted.