Person:
Ruta, Michele
Author Name Variants
Fields of Specialization
International Economics,
International Integration,
Regional Integration
Degrees
External Links
Departments
Macroeconomics, Trade & Investment Global Practice
Externally Hosted Work
Contact Information
Last updated
January 31, 2023
Biography
Michele Ruta is Lead Economist in the Macroeconomics, Trade & Investment Global Practice of the World Bank Group, where he leads the work program on regional integration. He had previous appointments as Economic Advisor to the Senior Director of the Trade & Competitiveness Global Practice (2015-2018), Senior Economist at the IMF (2013-2015), Counsellor at the WTO (2007-2013) and Marie Curie Fellow at the European University Institute (2004-2007). He holds a PhD in economics from Columbia University (2004) and an undergraduate degree from the University of Rome “La Sapienza” (1998).
Michele’s research interests are in international economics, and particularly on issues concerning international/regional integration. He has published in refereed journals such as the Journal of International Economics, the Journal of Public Economics, and the Journal of the European Economic Association. He was a lead author of the World Trade Report of the WTO between 2008 and 2013, and contributed to many policy reports, including the Global Economic Prospects of the World Bank, and the World Economic Outlook of the IMF. His work has been cited, among others, in the Economist, Financial Times, Guardian, Le Monde.
Publication Search Results
1 - 10 of 46
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Publication
The Global Trade Slowdown : Cyclical or Structural?
(World Bank Group, Washington, DC, 2015-01)This paper focuses on the sluggish growth of world trade relative to income growth in recent years. The analysis uses an empirical strategy based on an error correction model to assess whether the global trade slowdown is structural or cyclical. An estimate of the relationship between trade and income in the past four decades reveals that the long-term trade elasticity rose sharply in the 1990s, but declined significantly in the 2000s even before the global financial crisis. These results suggest that trade is growing slowly not only because of slow growth of gross domestic product, but also because of a structural change in the trade-gross domestic product relationship in recent years. The available evidence suggests that the explanation may lie in the slowing pace of international vertical specialization rather than increasing protection or the changing composition of trade and gross domestic product. -
Publication
Depreciations without Exports?: Global Value Chains and the Exchange Rate Elasticity of Exports
(World Bank, Washington, DC, 2015-08)This paper analyzes how the exchange rate elasticity of exports has changed over time and across countries and sectors, and how the formation of global value chains has affected this relationship. The analysis uses a panel framework covering 46 countries over the period 1996-2012, and first finds evidence that the elasticity of manufacturing export volumes to the real effective exchange rate has decreased over time. The paper then examines whether the formation of supply chains has affected this elasticity using different measures of global value chain integration. Intuitively, as countries are more integrated in global production processes, a currency depreciation only improves the competitiveness of a fraction of the value of final goods exports. In line with this intuition, the analysis finds evidence that the rise of participation in global value chains explains on average 40 percent of the fall in the elasticity, and that corrections of the real effective exchange rate for participation in global value chains do not present the same decreasing pattern in elasticity. -
Publication
Deep Trade Agreements and Vertical FDI: The Devil Is in the Details
(World Bank, Washington, DC, 2015-10)Recent data show that the institutional content of preferential trade agreements has evolved over time. Although pre-1990s preferential trade agreements mostly focused on tariff liberalization, recent agreements increasingly contain deep provisions in diverse areas, such as intellectual property rights, investment, and standards. At the same time, there has been a remarkable increase in the internationalization of production through foreign direct investment and outsourcing. This paper employs the Antràs and Helpman (2008) model of contractual frictions and global sourcing to study how deep trade agreements affect the international organization of production. The paper constructs new measures of the depth of preferential trade agreements and of vertical foreign direct investment to test the theory. Consistent with the model, the analysis finds evidence that the depth of trade agreements is correlated with vertical foreign direct investment, and that this is driven by the provisions that improve the contractibility of inputs provided by suppliers, such as regulatory provisions. Because this implication of the model is specific to the so-called “property rights” theory of the multinational firm, the findings provide empirical support to this approach vis-à-vis alternative theories of firm boundaries. -
Publication
COVID-19 and Food Protectionism: The Impact of the Pandemic and Export Restrictions on World Food Markets
(World Bank, Washington, DC, 2020-05)This paper analyzes the impact of Covid-19 and uncooperative trade policies on world food markets. It quantifies the initial shock due to the pandemic under the assumption that products that are more labor intensive in production are more affected through workers' morbidity and containment policies. It then estimates how escalating export restrictions to shield domestic food markets could magnify the initial shock. The analysis shows that, in the quarter following the outbreak of the pandemic, the global export supply of food could decrease between 6 and 20 percent and global prices increase between 2 and 6 percent on average. Escalating export restrictions would multiply the initial shock by a factor of 3, with world food prices rising by up to 18 percent on average. Import food dependent countries, which are in large majority developing and least developed countries, would be most affected. -
Publication
Trade Effects of the New Silk Road: A Gravity Analysis
(World Bank, Washington, DC, 2019-01)This paper takes a first look at the trade effects of China's Belt and Road Initiative, also referred to as the New Silk Road, on the 71 countries potentially involved. The initiative consists of several infrastructure investment projects to improve the land and maritime transportation in the Belt and Road Initiative region. The analysis first uses geo-referenced data and geographical information system analysis to compute the bilateral time to trade before and after the Belt and Road Initiative. Then, it estimates the effect of improvement in bilateral time to trade on bilateral export values and trade patterns, using a gravity model and a comparative advantage model. Finally, the analysis combines the estimates from the regression analysis with the results of the geographical information system analysis to quantify the potential trade effects of the Belt and Road Initiative. The paper finds that (i) the Belt and Road Initiative increases trade flows among participating countries by up to 4.1 percent; (ii) these effects would be three times as large on average if trade reforms complemented the upgrading in transport infrastructure; and (iii) products that use time sensitive inputs and countries that are highly exposed to the new infrastructure and integrated in global value chains have larger trade gains. -
Publication
Natural Disasters and the Reshaping of Global Value Chains
(World Bank, Washington, DC, 2021-06)To understand the longer term consequences of natural disasters for global value chains, this paper examines trade in the automobile and electronic sectors after the 2011 earthquake in Japan. Contrary to widespread expectations, the analysis shows that the shock did not lead to reshoring, nearshoring, or diversification; and trade in intermediate products was disrupted less than trade in final goods. Imports did shift to new suppliers, especially where dependence on Japan was greater. But production relocated to developing countries rather than to other top exporters. Despite important differences, the observed pattern of switching may be relevant to disasters like the COVID-19 pandemic. -
Publication
Deep Trade Agreements: Anchoring Global Value Chains in Latin America and the Caribbean
(Washington, DC : World Bank, 2022-07-12)International economic integration offers unexploited opportunities to Latin America and the Caribbean. This report studies how the region’s countries can leverage trade agreements to promote their economies’ participation in global value chains (GVCs).The gaps between potential and actual GVC integration follow from the region’s Economic fundamentals, such as geography, market size, institutions, and factor endowments. But policy choices matter as well. The report, based on new data and evidence, shows that trade agreements can drive policy reforms and help the region overcome some of its disadvantageous fundamentals. The report makes specific policy recommendations to guide Latin American and Caribbean countries in leveraging trade agreements to pursue greater international integration and economic growth. Four main findings emerge from the analysis: (i) Latin America and the Caribbean’s poor international integration and limited participation in GVCs have contributed to its low economic growth over the past decade; (ii) Although the region’s countries increasingly participate in preferential trade agreements (PTAs), there are gaps in the content of these agreements; (iii) Deep trade agreements present an avenue to promote trade and boost GVC integration and upgrading, thus contributing to improved economic performance; (iv) Four areas of deep integration - trade facilitation, regulatory cooperation, services, and state support - are priorities to improve these countries’ GVC participation and upgrading. -
Publication
Scarcity Nationalism during COVID-19: Identifying the Impact on Trade Costs
(World Bank, Washington, DC, 2022-11)During the COVID-19 pandemic, many countries used export and import policy as a tool to expand the availability of scarce critical medical products in the domestic market (scarcity nationalism). This paper assesses the direct and indirect (via trade in intermediates) increases in trade costs of critical medical goods resulting from these uncooperative policies. The results show that scarcity nationalism led to substantial increases in trade costs between February 2020 and December 2021 for most COVID-19 critical medical products, particularly garments (for example, face masks) and ventilators. The exception is vaccines, which saw a reduction in trade costs, which, however, was driven by the reduction in indirect trade costs for high-income countries, consistent with the view of a COVID-19 vaccine production club. -
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Trade Developments in 2016: Policy Uncertainty Weighs on World Trade
(World Bank, Washington, DC, 2017-02-21)This edition of Global Trade Watch addresses three questions concerning recent trade developments: What is happening? Why? Does it matter? 2016 is the fifth consecutive year of sluggish trade growth and the year with the weakest trade performance since the aftermath of the 2008 global financial crisis. Current estimates of growth in the volumes of trade in goods and services range from 1.9 percent to 2.5 percent; preliminary high-frequency data suggest that merchandise trade volumes may have grown by slightly above 1 percent. The year 2016 is different from the other post crisis years, in that trade sluggishness is a characteristic of both advanced and emerging economies. -
Publication
Does the Global Trade Slowdown Matter?
(World Bank, Washington, DC, 2016-05)Since the Global Financial Crisis, world trade growth has been subdued and lagging slightly behind growth of gross domestic product. Trade is growing more slowly not only because growth of global gross domestic product is lower, but also because trade itself has become less responsive to gross domestic product. This paper reviews the reasons behind the changing trade-income relationship, and then investigates its consequences for economic growth. On the demand side, sluggish world import growth may adversely affect individual countries' economic growth, as it limits opportunities for their exports. On the supply side, slower trade may diminish the scope for productivity growth through increasing specialization and diffusion of technologies. The paper finds preliminary evidence that the changing trade-income relationship matters, although the quantifiable effects do not appear to be large.
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