Sizing Up the Effects of Technological Decoupling

Diego Cerdeiro, Rui Mano, Johannes Eugster, Dirk Muir and Shanaka Peiris

No 2021/069, IMF Working Papers from International Monetary Fund

Abstract: 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.

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 (search for similar items in EconPapers)
Pages: 39
Date: 2021-03-12
New Economics Papers: this item is included in nep-cna, nep-ino and nep-int
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Citations: View citations in EconPapers (8)

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