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The Trade Impact of China on EMU: Is It Even Across Members?

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  • Mrs. Esther Perez Ruiz
  • Mr. Uffe Mikkelsen

Abstract

This paper investigates the asymmetries in trade spillovers from sector-specific technology shocks in China to selected euro area countries. We use a Ricardian-gravity trade model to estimate sectoral competitiveness in individual euro area countries. Simulations on the impact of productivity shocks in Chinese textiles and machinery suggest that the required adjustment in wages, prices, and factor re-allocation is widely heterogenous across euro area countries on accounts of their different specialization patterns. This raises the question of the distribution of gains and losses from external trade shocks.

Suggested Citation

  • Mrs. Esther Perez Ruiz & Mr. Uffe Mikkelsen, 2012. "The Trade Impact of China on EMU: Is It Even Across Members?," IMF Working Papers 2012/221, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2012/221
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    References listed on IDEAS

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    1. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
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    6. Lorenzo Caliendo & Fernando Parro, 2015. "Estimates of the Trade and Welfare Effects of NAFTA," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(1), pages 1-44.
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    Cited by:

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