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Discussion Paper
Assessing China's Efforts to Increase Self-Reliance
Since the beginning of 2018, the United States and China have been increasing tariff rates on each other's imports, spurring debates about a possible fragmentation of trade into blocs of aligned countries (Pierce and Yu (2023), Alfaro and Chor (2023)). Later that year, in a November 2018 speech to workers at a state-owned enterprise, President Xi Jinping mentioned that current events were forcing China to "travel the road of self-reliance."
Working Paper
Demand-Supply imbalance during the COVID-19 pandemic: The role of fiscal policy
To mitigate the health and economic fallout from the COVID-19 pandemic, governments worldwide engaged in massive fiscal support programs. We show that generous fiscal support is associated with an increase in the demand for consumption goods during the pandemic, but industrial production did not adjust quickly enough to meet the sharp increase in demand. This imbalance between supply and demand across countries contributed to high inflation. Our findings suggest a sizable role for fiscal policy in affecting price stability, above and beyond what a monetary authority can do.
Working Paper
Bought, Sold and Bought Again: The Impact of Complex Value Chains on Export Elasticities
Global value chain (GVC) participation affects the relationship between trade volumes and exchange rate movements. Guided by a simple theory, we show that exports react to the exchange rate between the country producing value added contained in exports and the country of final absorption for this value added. Three predictions follow: (i) a higher share of foreign value added in exports reduce the responsiveness of export volumes to exchange rate changes, (ii) a greater share of exports that returns as imports also reduce the responsiveness of export volumes and (iii) a higher share of inputs ...
Discussion Paper
Understanding Trade Fragmentation
A large empirical literature, including Gopinath et al. (2025), finds that geopolitical distance has become an increasingly important determinant of bilateral trade flows. This work has fueled debate about the consequences of fragmentation and the extent to which global value chains are being reshaped.
Discussion Paper
How Global Value Chains Change the Trade-Currency Relationship
This note summarizes the main results of the de Soyres et al. (2018) paper, drawing out the most policy-relevant implications.
Discussion Paper
The Sectoral Evolution of China’s Trade
Since 2018, Chinese officials have been emphasizing the need for China to achieve greater self-reliance. As discussed in de Soyres and Moore (2024), China has reduced its reliance on imported inputs, while simultaneously becoming more dependent on foreign demand to absorb its manufactured goods. In this Note, we look at the evolution of the sectoral composition of China's exports and imports and investigate its similarity with the sectoral composition of the trade baskets of advanced economies (AEs). First, using a gravity model, we show that bilateral trade flows are significantly influenced ...
Discussion Paper
Disinflation Progress: A Comparison of Advanced Economies
Following several decades of low inflation in most advanced economies, the Covid pandemic gave rise to unprecedented global economic conditions, materializing in a synchronized surge in price pressures. In this note, we analyze the recent inflation burst and assess the disinflation progress across advanced economies.