Category Archives: BUSINESS

Best of three scenarios for world trade

Author: Razeen Sally, NUS

International trade is in trouble after the global financial crisis and, with the new Trump administration, the world faces a protectionist onslaught. As a result, there are three ways that international trade can go from here — one considerably ‘more likely’ than the other two.

Let’s begin with the state of play. Three features stand out: a global trade slowdown, creeping protectionism and the failure of the Trans-Pacific Partnership (TPP).

First, global trade growth — what is dubbed ‘peak trade’ — has slowed down markedly. International trade grew twice as fast as world output in the quarter-century before the global financial crisis (GFC). It slumped during the crisis and then picked up again, but since 2012 it has barely kept pace with world GDP growth. Trade revived along with global economic growth in the first quarter of 2017. But it is too early to tell if this is a new trend or just a blip on the screen.

Second, protectionism has increased since the GFC. It has not escalated to 1930s heights, nor has it reversed existing globalisation. Rather, post-GFC protectionism has been ‘creeping’ up, mostly through anti-dumping duties and insidious non-tariff barriers such as subsidies, onerous standards requirements …continue reading

    

America first, economic logic last

Author: Gary Hawke, Victoria University of Wellington

The Trump administration has introduced a new set of challenges to the international economy. It has profoundly changed the role of the United States in international economic diplomacy, ceasing to be a champion of multilateralism.

Within the first 100 days of the Trump administration, reality has overwhelmed a good deal of campaign rhetoric, and individuals experienced and skilled in conventional public management have prevailed over some who epitomised revolt against elites. But ideas that challenge longstanding US positions on the world economy and international integration remain at the core of the Trump administration.

US President Donald Trump speaks during a signing ceremony of executive orders on trade, accompanied by Vice President Mike Pence and US Commerce Secretary Wilbur Ross at the Oval Office of the White House in Washington, US, 31 March 2017 (Photo: Reuters/Carlos Barria)

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How does exchange rate volatility affect value added and gross trade?

How does exchange rate volatility affect value added and gross trade?

The rise of Donald Trump has reignited the debate on the link between exchange rates and trade. The Trump administration has blamed the exchange rate policies of the People’s Republic of China (PRC), Japan, and Germany for the current account deficit in the United States (US), and the president’s Twitter posts have put many major currencies on a roller coaster ride. Now, policy makers around the globe are concerned about the negative impact of exchange rate volatility on world trade.

So, how does exchange rate volatility affect trade? There is no consensus on this topic, either theoretically or empirically. In early theoretical studies, exchange rate volatility was often seen as an additional commercial risk and transaction cost associated with international trade. This implies that greater volatility means greater uncertainty of expected profits, which consequently causes firms to reduce their output and exports. Exchange rate volatility can also be a sunk cost or fixed entry cost that discourages firms from exporting, and many empirical researchers have proven this negative relationship (Thorbecke 2008; Hayakawa and Kimura 2009). However, these conclusions rely on many theoretical assumptions, such as perfect competition, the absence of imported inputs, high aversion to risk, and the absence of financial …continue reading

    

82: How Virtual Reality is Changing Surgery in Japan – Holoeyes

Many VR startups are a solution is search of a problem, but Holoeyes is already in use at hospitals around Japan. Although the medical industry is one the most highly regulated, conservative and hard to disrupt, Holoeyes has made inroads by solving a very specific problem for surgeons. Today we sit down with Naoji Taniguchi, CEO […]

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Free Internet access in Japan just got easier

Free Wi-Fi hotspots began popping up across the country a few years ago, in the run up to the 2000 Olympic Games. Previously, free Wi-Fi was tough to find, frustrating millions of visitors and locals seeking to reduce mobile network charges. The need to fill out finicky online registration forms, often in the Japanese language, […]

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