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Sizing Up the Effects of Technological Decoupling
Author:
Rui Mano
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,
Johannes Eugster
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,
Mr. Dirk V Muir
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Mr. Shanaka J Peiris
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Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 069
Language:
English
Publication Date:
12 Mar 2021
DOI:
https://doi.org/10.5089/9781513572673.001
ISBN:
9781513572673
ISSN:
1018-5941
Pages:
39
Keywords:
Technological decoupling; trade; non-tariff barriers.; non-tariff barriers; China-United States; R&D number; innovation drive; United States stop; world trade f low; sectoral trade elasticity; high-tech goods trade; Labor productivity; Productivity; Spillovers; Exports; Trade balance; Global; Asia and Pacific
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper proposes channels through which technological decoupling can affect global growth, and embeds these different layers in a global dynamic macroeconomic model. Multiple scenarios are considered that differ along two dimensions: (i) the coalition of countries (hubs) that initiate the decoupling, and (ii) whether non-hub countries are also forced to decouple via ‘preferential attachment’ – i.e. by aligning themselves with the hub they trade most with. All global technology hubs lose across scenarios, and losses are largest under preferential attachment. Smaller countries with relations that straddle multiple hubs generally lose, whereas those whose trade is heavily concentrated with one hub may gain due to reduced competition under some scenarios. Technological fragmentation can lead to losses in the order of 5 percent of GDP for many economies.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund