Krishna, Kala (2009): Background Paper on the IMF's Trade Restrictiveness Index.
Download (178kB) | Preview
This paper reviews the Funds Trade Restrictiveness Index (IMF-TRI). It has three parts. The �rst part describes what the IMF-TRI is and the data needed to computeit. This part also traces the history of usage and the debate on the use of the IMF-TRI within the fund. It draws on internal Fund documentation as well as interviews conducted by Ms. Tan at IEO and the consultant. It also includes a discussion of the key documents produced internally and commissioned from external sources by the Fund. The second part asks what a good measure should be. There is no one size fits all measure as trade restrictiveness is multi dimensional. However, there is no reason to rely on a single measure of trade restrictiveness to capture all these di-mensions. Depending on how comprehensive a measure is needed, one or a variety of measures may be deemed appropriate to look at. The strengths and weaknesses of the IMF-TRI are highlighted and existing measures briefly surveyed. The third part suggests that an approach based on work by James Anderson, Peter Neary, and Robert Feenstra (ANF-TRI), together with other indicators, be used by the IMF in the future. The approach is relatively flexible and can be used to construct a basic measure of trade restrictiveness or a variety of more comprehensive ones as described in this section. This approach has been implemented by a group of economists at or formerly at the World Bank(H.L. Kee, M. Olarrelanga, A. Nicata). The relevant indices are available online. The averages of some of these indices are being reported in the Global Monitoring Report (GMR) which is put out under the joint auspices of the Bank, Fund, WTO and UNCTAD, and has presumably been vetted by all of the above. This provides additional legitimacy for the Funds use of the index. Moreover, the Bank is committed to updating these indices annually for the GMR.
|Item Type:||MPRA Paper|
|Original Title:||Background Paper on the IMF's Trade Restrictiveness Index|
|Keywords:||IMF; Trade Restrictiveness Index|
|Subjects:||A - General Economics and Teaching > A1 - General Economics|
|Depositing User:||Kala Krishna|
|Date Deposited:||16. Mar 2010 12:55|
|Last Modified:||15. Feb 2013 23:06|
 Policy Development and Review Department. (PDR) (2005) "Review of the IMFs Trade Restrictiveness Index." Background paper to the Review of Fund Work on Trade.
 Anderson, J. E. (1990) "The Coe¢ cient of Trade Utilization: The Cheese Case," in R. Baldwin ed. Empirical Studies of Commercial Policy, University of Chicago Press, Chicago. Forthcoming 1991.
 Anderson, James E. (1998) "Trade Restrictiveness Benchmarks" The Economic Journal,.July.
 Anderson J. E. and J. P. Neary (1990) "The Coe¢ cient of Trade Utilization: Back to the Baldwin Envelope," in R. Jones and A. Krueger, eds., The Political Economy of International Trade. Oxford: Basil Blackwell.
 Anderson, James and Peter Neary (2003), "The Mercantilist Index of Trade Policy", International Economic Review 44 (2), 627-649.
 Anderson, James and Peter Neary (2005), Measuring Trade Restrictiveness of Trade Policy, Cambridge, Mass.: MIT Press, 2005.
 Cline, William. (2003). "Evaluating the IMFs Index on Trade Restrictiveness". Mimeo.
 Deardor¤, A. and R. M. Stern (1985) "Methods of Measurement of Non-Tari¤ Barriers," UNCTAD/ST/MD/28.
 Dollar, D. (1992) "Outward-Oriented Developing Economies Really Do Grow More Rapidly: Evidence from 95 LDCs, 1976-1985," Economic Development and Cultural Change, University of Chicago Press, vol. 40(3), pages 523-44, April.
 Edwards, S. (1992) "Trade Orientation, Distortions and Growth in Developing Countries," Journal of Development Economics, 39(1), July, 31-57.
 Edwards, Sebastian (1993) "Openness, Trade Liberalization, and Growth in Developing Countries," Journal of Economic Literature, 31(3), September, pp. 1358-1393.
 Trade Liberalization in Fund Supported Programs. August, 27, 1997. Prepared by the Policy Development and Review Department. EBS/97/163.#
 Frankel, Je¤rey and David Romer (1999) "Does Trade Cause Growth?" The American Economic Review, Vol. 89, No. 3, June, pp. 379-399.
 Kirmani, Naheed and others, 1994a. "Trade Policy Reform in the Countries of the Former Soviet Union", IMF Economic Review No.2. Washington, International Monetary Fund.
 Kirmani, Naheed and others, 1994b. "International Trade Policies: The Uruguay Round and Beyond." Volume 1. Principal Issues and Volume 2, Background Papers. World Economic and Financial Surveys. Wahsington, International Monetary Fund.
 Kee, Hiau Looi, Alessandro Nicita and Marcelo Olarreaga (2004), "Import Demand Elasticities and Trad Distortions", Centre for Economic Policy Research, Working Paper #4669, London, UK.
 Kee, Hiau Looi, Alessandro Nicita and Marcelo Olarreaga (2006), "Estimating Trade Restrictiveness Indices", Policy ResearchWorking Paper Series 3840, The World Bank, Washington DC.
 Krishna, Kala and Ling Hui Tan. (1996). Rags and Riches: Implementing Apparel Quotas under the Multi-Fibre Arrangement. University of Michigan Press.
 Krishna, Kala (2006) "Understanding Rules of Origin." In O. Cadot, A. Estevadeordal, A. Suwa-Eisenmann and T. Verdier (eds.), The Origin of Goods: Rules of Origin in Regional Trade Agreements, Oxford University Press, 2006, pp. 19-34.
 Krishna, K. (1991), "Openness: A Conceptual Approach". Mimeo.
 Krishna, Kala and Anne Krueger "Implementing Free Trade Areas: Rules of Origin and Hidden Protection," in New Directions in Trade Theory, A. Deardorf, J. Levinsohn,and R. Stern (eds.), Ann Arbor: The University of Michigan Press, 1995, pp. 149-198.
 Krueger, A. (1983) "The E¤ects of Trade Strategies on Growth,"Finance and Development, Vol. 20, No. 3.
 Subramaniam, Arvind (2000) "Trade and Trade Policies in Eastern and Southern Africa." Occasional Paper 196. International Monetary Fund.
 Pritchett, L. (1991) "Measuring Outward Orientation in Developing Countries: Can it be Done?" PRE Working Paper WPS 566. Washington DC: The World Bank.
 Rodrik, Dani and Francisco Rodriguez, (2000). "Trade Policy and Economic Growth: A Skeptics Guide to the Cross-National Evidence." NBER Macroeconomics Annual, eds. Ben Bernanke and Kenneth S. Rogo¤, MIT Press for NBER, Cambridge, MA.
 Tokarik, Stephen. (2007) "Evaluating the Robustness of Trade Restrictiveness Indices". Mimeo. February, 2007. 2