Research
Research
Demographic Dynamics and International Trade: Stylised Facts and Theoretical Insights, Journal of Economic Surveys
Market size and the evaluation of future trade agreements: The role of population and TFP growth (with Benedikt Heid)
In the coming decades, Europe's and China’s population will shrink, whereas other world regions will experience continuing population growth. Similarly, productivity growth will differ across developing and developed economies, leading to changes in future market sizes across countries. These changes will reshape countries' attractiveness as partners in free trade agreements (FTAs), impacting the geopolitical influence of economies like the European Union (EU) and China. Standard methods for evaluating FTAs abstract from these changes in market sizes. We use population and productivity projections to evaluate the welfare effects of future trade agreements as a function of market size. We apply our method to a potential EU-China FTA. For the EU, we find that as the EU’s market size grows by 7.46% between 2025 and 2050, the welfare effect of a potential EU-China FTA increases by 23.8%. For China, a projected market size increase of 32.53% leads to a 13.3% decrease in the welfare effects of the FTA. We show that total factor productivity growth is a more relevant driver of welfare changes than population dynamics, suggesting that policy makers should prioritize future productivity growth when evaluating future trade agreements.
Export Restrictions and Trade in Critical Mineral Goods for the Green Transition (with Meng Yu Ngov)
Critical minerals are essential inputs in the production of green technologies that underpin the transition to sustainable energy. Export restrictions on these minerals raise global prices by constraining supply, reducing material availability, and disrupting international markets and supply chains. Using an event-study approach, we quantify the trade effects of export restrictions on critical mineral green products, drawing on the concept of product relationship stickiness. Our analysis covers export restrictions imposed between 2007 and 2023, combining data from the Global Trade Alert, ADB–WTO Trade in Critical Minerals (TiCM) database, and the CEPII - BACI trade database. We identify 242 products as green transition related goods based on critical minerals. On average, export restrictions reduce the quantity of critical mineral green products' exports by about 11.8%. For high-stickiness raw materials, trade declines by roughly 30%, suggesting that restrictions on specialized raw materials are particularly disruptive to global supply chains.