Introduction and Overview

There have been far-reaching changes in international trade and finance during the past half-century. Not only has the share of trade in the GDP of most countries expanded with the reduction of tariffs, transportation costs, and assorted other barriers, but significant innovations in communications technologies have facilitated the growth of economic and financial linkages among countries. These developments have also opened the door to cross-border production sharing and global production networks. Changes of such magnitude and import inevitably raise challenges not only for policy makers, but for economic theorists and model builders. The papers assembled in this volume explore the implications of these changes and assess the quality of the policy response…