Large US household balance sheets pose macro risks

Significance An examination of the factors behind the expansion indicates that outsized balance sheets will persist and will pose a number of macroeconomic risks. Impacts Slower workforce growth will pressure GDP growth, trade growth and long-term interest rates, unless productivity gains can offset this. A record number of US business deaths and births in 2020 will affect productivity and have unpredictable impacts on the economy. Lower growth makes it harder to stabilise debt-to-GDP ratios, just as pension and health costs rise as populations age in major economies.

Trade Policy is Real News: Theory and Evidence

We evaluate the aggregate effects of changes in trade barriers when these changes can be implemented slowly over time and trade responds gradually to changes in trade barriers because firm-level trade costs make exporting a dynamic decision. Our model shows how expectations of changes in trade barriers affect the economy. We find that while decreases in trade barriers increase economic activity, expectations of lower future trade barriers temporarily decrease investment, hours worked, and output. Further- more, canceling an expected decline in future trade barriers raises investment and output in the short run but substantially lowers medium-run growth. These effects are larger when the expected reform is bigger. In the data, we find that countries with more trade growth after the General Agreement on Tariffs and Trade (GATT) rounds decreased investment and hours worked in the years leading to the tariff cuts, as predicted by our model.

CURRENT STATE, TRENDS AND CHALLENGES OF CHINA’S DIGITAL TRADE

The digitalization of economy has a significant impact on the economic sector and on other activities. In recent years, there has been a sharp increase in the digitalization of the economy in China, primarily in such an area as digital trade. China's digital trade has grown steadily in recent years, and its share in China's trade has also increased. This article proposes the term “digital trade” and presents its characteristics. Analyze the state of the China’s digital trade, the features and main trends in the development of digital trade in goods and services. In addition, put forward current problems in the development of digital trade in China. It is concluded that digital trade in China as a whole has a positive trend, but in the future, instead of digital trade in goods, digital trade in services will become a major driving force of China's digital trade. With the development of cloud computing, cloud outsourcing and offshore services will become a new sector of digital services trade in the coming years. It was noted that China's digital trade is a driver for innovative trade growth and has an active impact on China's trade and economic activity.

ECONOMIC DIPLOMACY STRATEGY FOR THE RECOVERY OF THE SLOWDOWN OF GLOBALIZATION (SLOWBALIZATION)

The article investigates a transition from globalization to its more restricted model called «slow stabilization» or «slowbalization» in the context of the most decisive challenge to economic diplomacy. The authors of this study identify the problems of globalization, outline possible causes and consequences, and consider the option of returning to comprehensive protectionism as a manifestation of the economic diplomacy of national economic systems in the context of globalization and «slowbalization». The novelty of this work is in using economic diplomacy, in the unique pandemic context, as a driver to support economic recovery, helping to define national and international policies and creating a strong network where government, embassies, consulates, agencies, institutions, companies and households can come together to achieve effective cooperation. The research concludes that economic diplomacy in general, and export promotion agencies in particular, encourage export promotion and trade growth. Authors establish that the strategy of economic diplomacy is the driver of recovery and can assist in the scenario of deceleration defining a clear export strategy, creating a large network that involves all actors and network of offices abroad to spread the exports policy, and employing a wide variety of instruments, such as bilateral, regional, and multilateral agreements.

Trends in the development of international trade in the post-coronavirus economy

The article examines the main current trends in the state and development of in-ternational trade. The purpose of the study is to identify opportunities and re-serves for trade growth. The presented indicators of exports, imports, gross do-mestic product by regions of the world allow drawing conclusions about the prospects for overcoming the global economic crisis. The results of the study are aimed at identifying the main trajectories of international trade in the post-coronavirus period.

The Role of Institutional Quality in Trade-Growth Nexus: The Case of Emerging Economies

This study aims at investigating the relationship between trade openness and economic growth after incorporating the role of institutions. Generalized method of moments (GMM) system technique is applied by using data of 17 major emerging market economies (EMEs) for the period 1995-2018. The empirical evidence suggests that trade liberalization affects economic growth positively and significantly while institutions play a supportive role in this regard. The interaction terms are also generated to test the impact of the institutional environment on the trade-growth relationship. The empirical results are robust to various specifications, confirming the positive role of institutions in trade- growth nexus. The countries should develop a conducive institutional and political environment to ensure the beneficial growth effects of trade liberalization policy.