Has Globalization Gone Far Enough? : The Costs of Fragmented International Markets

How important are the remaining barriers to integration in international goods markets and how would eliminating them affect global and individual countries’ welfare? Major current initiatives, such as multilateral trade liberalization in the Doha Round and the efforts to complete the European Common Market, imply that additional integration is highly desirable, while the widespread use of the term "globalization" to describe our era suggests that it is already almost complete. Has Globalization Gone Far Enough: The Cost of Fragmented Markets studies these questions using the most comprehensive price data available. The authors, Scott C. Bradford and Robert Z. Lawrence find that there is considerable international market fragmentation among industrial countries—this, firms charging different prices for similar productions in different national markets—even among countries with low tariff barriers. Bradford and Lawrence estimate that integration among the eight countries in their sample—Australia, Canada, Germany, Italy, Japan, the Netherlands, the United Kingdom and the Untied States—would raise global GDP by more than $500 billion. This would increase the size of the world economy by over 2 percent. Remarkably, almost half the global gain in these eight countries could be reaped if Japan alone eliminated its international fragmentation. Annotation How important are the remaining barriers to integration in international goods markets and how would eliminating them affect global and individual countries' welfare? This book studies these questions using the most comprehensive price data available. Bradford and Lawrence find that there is considerable market fragmentation among industrial countries -- that is, firms charging different prices for similar products in different national markets -- even among countries with low tariff barriers. The authors estimate that integration among the eight countries in their sample -- Australia, Canada, Germany, Italy, Japan, the Netherlands, the United Kingdom and the United States -- would raise global GDP by more than $500 billion, or about 2 percent. Remarkably, almost half the global gain in these eight countries could be reaped if Japan alone eliminated its international fragmentation Annotation Has globalization gone far enough? This study will use the underlying data from Purchasing Power Parity Surveys to estimate the potential benefits from fully integrating goods markets among major OECD countries. These data are particularly useful because they are comprehensive and every effort has been made to ensure that they are comparable. Input-output tables will be used to eliminate distribution margins from final goods prices and thereby provide estimates of ex-factory prices. Price differentials will be taken as measures of barriers, and the welfare effects of eliminating these barriers will be estimated in a general equilibrium model. The study will also provide insights into the relative openness of individual OECD countries to the world economy, and the degree to which Europe has become a single market This study considers what would happen if remaining barriers to integration in international goods markets were eliminated. Bradford (economics, Brigham Young U.) and Lawrence (trade and investment, Harvard U.) examine price data from eight industrial countries—Australia, Canada, Germany, Italy, Japan, the Netherlands, the UK, and the US—to reveal considerable international market fragmentation. They then argue that efficiency gains from integration among these countries, accompanied by removal of their remaining tariff barriers, would significantly raise the global GDP. Annotation ©2004 Book News, Inc., Portland, OR iie.com......Page 0 Has Globalization Gone Far Enough? The Costs of Fragmented Markets -- Scott Bradford, Robert Z. Lawrence, Institute for International Economics......Page 1 http://www.iie.com/publications/chapters_preview/349/1iie3497.pdf......Page 3 http://www.iie.com/publications/chapters_preview/349/2iie3497.pdf......Page 4 http://www.iie.com/publications/chapters_preview/349/3iie3497.pdf......Page 5 http://www.iie.com/publications/chapters_preview/349/4iie3497.pdf......Page 6