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Rise of the South at a Crossroads: A View from East Asia and Latin America
May 16, 2016The Forum at Sasana Kijang, Kuala Lumpur, Malaysia

We invite you to a World Bank conference on trade and economic integration. The event is jointly organized by the Latin America and Caribbean Chief Economist Office and the Development Research Group, with the participation of the East Asia and Pacific Chief Economist and the support of the Malaysia Country Office.

This conference brings together eminent policymakers and academics to present and discuss recent studies and developments on international economic integration, particularly from an emerging economy perspective. You will hear from leading economists of Bank Negara Malaysia, the Ministry of Trade and Integration, the World Trade Organization, the World Bank, as well as renowned international experts and scholars working at the knowledge frontier.

The conference will consider the opportunities and challenges of regional and global integration, reflecting on the linkages promoted by international trade, financial flows, knowledge sharing, and diffusion of new technologies. It will provide a venue to consider the different vantage points of East Asian and Latin American countries as their importance in global markets keeps rising. The event will also be a forum to disseminate the latest World Bank Flagship Report for Latin America, Latin America and the Rising South: Changing World, Changing Priorities.

Program organizers: Norman Loayza and Tatiana Didier (World Bank)

Monday, 16 May 2016

8.30-9.15               Registration

9.15-9.30               Welcoming Remarks

Sukhdave Singh, Deputy Governor, Bank Negara Malaysia
Faris Hadad-Zervos, Country Manager for Malaysia, World Bank

9.30-11.00             Flagship Report Presentation: The Rising South – A Latin America Perspective and Implications for East Asia and Malaysia

Chair: Faris Hadad-Zervos, Country Manager for Malaysia, World Bank

Latin America and the Rising South: Changing World, Changing Priorities Report
Augusto de la TorreChief Economist for Latin America and the Caribbean, World Bank

Sudhir Shetty, Chief Economist for East Asia and the Pacific, World Bank
Fraziali bin Ismail, Director of the Economics Department, Bank Negara Malaysia

11.00-11.30           Coffee Break

11.30-13.00           Policy Panel: The Trans-Pacific Partnership (TPP) as an Opportunity for Integration

Moderator: Norman LoayzaLead Economist, Development Research, World Bank

Panel members:
Rebecca Fatima Sta Maria, Secretary General, Ministry of International Trade and Industry, Malaysia
Robert B. Koopman, Chief Economist, World Trade Organization
Miguel Castilla, Ambassador of Peru to the United States, former Minister of Economy and Finance, Peru
Osvaldo Rosales, Former Director of International Trade and Integration, Economic Commission for Latin America and the Caribbean, and Chief Trade Negotiator, Chile

13.00-14.00          Lunch

14.00-15.30          The Gains from Networks and Integration

Chair: Rafael Muñoz Moreno, Country Economist for Malaysia, World Bank

Urban Networks: Connecting Markets, People, and Ideas
Giacomo A. M. Ponzetto, University Pompeu Fabra

Discussant: Michael Woolcock, Social Development Specialist, World Bank

Internalizing Global Value Chains: A Firm-Level Analysis
Davin Chor, National University of Singapore

Discussant: Filippo di Mauro, European Central Bank

15.30-16.00           Coffee break

16.00-17.30           Market Rigidities as Obstacles to Integration

Chair: Julio Revilla, Lead Economist, World Bank

Linkages and Economic Development
Dominick Bartelme, University of Michigan

Discussant: Mohd Yusof Saari, University Putra Malaysia

The Rise of China and Labor Market Adjustments in Latin America
Daniel Lederman, Lead Economist, World Bank

Discussant: Boon Hwa Tng, Bank Negara Malaysia

17.30-17.35            Closing Remarks

  • Sukhdave Singh

    Deputy Governor, Bank Negara Malaysia
    Dr. Sukudhew (Sukhdave) Singh is Deputy Governor at Bank Negara Malaysia, with responsibility over Monetary Policy, Economics, International, Statistics, IT, Strategic Management, and Human Capital Development. He is also a member of Bank’s Monetary Policy Committee, Financial Stability Committee and Board of Directors. Dr. Sukhdave joined Bank Negara Malaysia in 1986 and holds a PhD in Monetary and International Economics from Vanderbilt University, USA. In his service with the Central Bank, Dr. Sukhdave has contributed to various other functional areas including financial stability, payment systems, human resource management, statistical information systems, and in the financial advisory role to the Government. He has chaired a number of regional taskforces, was co-chair of the SEACEN Experts Group on capital flows, and sits on the Board of Directors’ of The South East Asian Central Banks (SEACEN) Research and Training Centre. He was Malaysia’s negotiator for financial services in the Trans-Pacific Partnership (TPP) Free Trade Agreement negotiations.
  • Faris Hadad-Zervos

    Country Manager for Malaysia, World Bank
    Faris Hadad-Zervos, a US national, joined the World Bank in 1996 with the Private Sector Development Department. He served as Head of Mission for Iraq (2003-2005), Operations Manager for the West Bank and Gaza (2005-2008), and Country Manager for Bolivia (2012-2015). In 2008, Mr. Hadad-Zervos took a leave of absence from the World Bank to serve as the Deputy Head of the Quartet Office for the Middle East Peace Process, based in Jerusalem. He was a visiting lecturer on economic development in conflict states at Georgetown University and Johns Hopkins University. Mr. Hadad-Zervos holds a Master's Degree in Economics from George Mason University, and a Master's Degree in Finance from George Washington University.
  • Augusto de la Torre

    Chief Economist for Latin America and the Caribbean, World Bank
    Augusto de la Torre, is the Chief Economist for Latin American and the Caribbean. Before his appointment as the region’s Chief Economist, Augusto de la Torre was a Senior Advisor responsible for financial matters in Latin America and the Caribbean. Since joining the Bank in October 1997, he has published extensively on a broad range of macroeconomic and financial development topics. Prior to joining the Bank, Augusto was President of Ecuador’s Central Bank and an International Monetary Fund Economist, including the IMF’s Resident Representative in Venezuela (1991-1992). He earned his M.A. and Ph.D in Economics from the University of Notre Dame and holds a Bachelor's degree in Philosophy from the Catholic University of Ecuador.
  • Sudhir Shetty

    Chief Economist, East Asia and Pacific, World Bank
    Sudhir Shetty is currently Chief Economist of the East Asia and Pacific Region of the World Bank. Until June 2014, he was the Director of the Poverty Reduction and Economic Management (PREM) in the East Asia and Pacific Region. Prior to that, he was Co-Director of the team that prepared the World Bank’s 2012 World Development Report on Gender Equality and Development. He previously headed the PREM department in the Africa Region of the World Bank, managed the Bank’s central Poverty Reduction group and held a number of positions as an economist in both the Africa and East Asia and Pacific regions of the Bank. Mr. Shetty has a Ph.D. in Economics from Cornell University and an MBA from the Indian Institute of Management, Ahmedabad. Before joining the Bank in 1987, Mr. Shetty was an Assistant Professor of Public Policy and Economics at Duke University.
  • Fraziali bin Ismail

    Director of the Economics Department, Bank Negara Malaysia
    An economist by training, Fraziali Ismail is a career central banker. He graduated from the University of Bristol, United Kingdom, and read postgraduate studies at the University of Manchester and the London School of Economics and Political Science. He was previously the Director of Monetary Policy Department. Currently serving as the Director of the Economics Department, he provides vision, insight and technical advice to research and analytical projects related to current and prospective developments in Malaysia and international economies and heads the staff presentation to the Monetary Policy Committee. Fraziali also sits in several Government policy and development committees.
  • Norman Loayza

    Lead Economist, Development Research Group, World Bank
    Norman Loayza is a Lead Economist in the Development Research Group at the World Bank. Recently, he was director of the World Development Report 2014, Risk and Opportunity: Managing Risk for Development. His research has dealt with various areas of economic and social development, including macroeconomic management, economic growth, microeconomic flexibility, private and public saving, financial depth and stability, natural disasters, and crime and violence. His advisory experience at the World Bank has also ranged across different topics in various regions and countries. A Peruvian national, he holds a Ph.D in economics from Harvard University (1994).
  • Rebecca Fatima Sta Maria

    Secretary General, Ministry of International Trade and Industry, Malaysia
    Rebecca Fatima Sta Maria is the Secretary-General of the Ministry of International Trade and Industry (MITI). Prior to this appointment, she was the Deputy Secretary-General (Trade) of MITI, providing oversight for the formulation and implementation of Malaysia’s international trade policies and positions. She began her career in the Administrative and Diplomatic Service in 1981 and served in various capacities in the then Ministry of Trade and Industry. In 1988, she was seconded to the ASEAN Plant Quarantine and Training Center as its Chief Administration and Procurement Officer. Rebecca has been involved extensively in ASEAN. In 2006, she chaired the ASEAN Senior Economic Officials Meeting (SEOM). Currently, she is the Chair of the ASEAN High Level Task Force for Economic Integration. She is also the Vice Chair of the World Economic Forum, Global Agenda Council, Southeast Asia. She is a graduate of the University of Malaya with a B.A. (Hons) in English Literature. She received a Diploma in Public Administration from the National Institute of Public Administration (INTAN), Malaysia in 1981. She also has an M.S. (Counselling) from Universiti Pertanian Malaysia (now known as Universiti Putra Malaysia). After receiving her Ph.D from the University of Georgia in Athens, U.S.A., Rebecca was awarded the Malcolm Knowles Award for the best Ph.D dissertation in the field of Human Resource Development by the American Academy of Human Resource Development in 2000. She is a trustee for the MyKasih Foundation; and a member of the Board of Directors of the Emmaus Counselling Center.
  • Robert B. Koopman

    Chief Economist, World Trade Organization
    Chief Economist and Director of the Economic Research and Statistics Division at the World Trade Organization (WTO), in this post Bob provides the Secretariat and Member Countries with analysis and information that promotes a deeper understanding of trade and trade policy's role in economic growth and development. Prior to this post he served as the Director of Operations and Chief Operating Officer for the United States International Trade Commission. Bob oversaw the Commission’s trade policy research and negotiation assistance to the President, the U.S. Trade Representative, and Congress; antidumping, countervailing duty, and safeguard; investigations; intellectual property investigations; maintenance and analysis of the Harmonized Tariff System, as well as the agency’s strategic planning and performance measurement initiatives. He also previously served as the Chief Economist and Director of the USITC Office of Economics, and numerous leadership and research positions at the Economic Research Service of USDA. Bob ‘s research interests include measuring the economic effects of trade and trade policy changes, measuring global value chains, and the application and validation of large scale economic simulation models.
  • Luis Miguel Castilla

    Ambassador of Peru to the United States, former Minister of Economy and Finance, Peru
    Dr. Castilla served as Minister of Economy and Finance of Peru from July 2011 to September 2014 under the administration of President Ollanta Humala. During his tenure, he implemented major reforms to attract foreign direct investment to Peru, spur economic growth, reduce poverty and foster economic and social development. He promoted a series of second-generation reforms in infrastructure public private partnerships, civil service, fiscal rules, pension system, capital market development, financial inclusion, taxation, government procurement and state modernization, among others. During the past three years, Peru’s credit ratings were upgraded by all major credit rating agencies (classified as the second highest investment rated country in Latin America). Prior to his appointment, Castilla held several positions at the Ministry of Economy and Finance, including Deputy Finance Minister and Chief of Staff. In addition, he has over 15 years of experience at multilateral development banks, holding senior positions at CAF - Development Bank of Latin America, among others.
  • Osvaldo Rosales

    Former Director of International Trade and Integration, Economic Commission for Latin America and the Caribbean, and Chief Trade Negotiator, Chile
    Chilean, Economist, Master in Economic Sciences in Universidad de Chile; Magister in Economics, Escolatina, Universidad de Chile. Former Researcher and Professor of the Economics Faculty of Universidad de Chile. His main fields of research are economic development matters, international economy and trade policy. He has taught and lectured in Latin America, Europe (Germany, Belgium, France, Spain, Sweden and Switzerland), North America (Canada and the United States), Africa (Egypt and Ghana), Asia (China, Japan and Korea) and Russia. He has published in several countries (United States, Spain, France, Mexico, Argentina and other countries of the region). He has provided advice to several Latin-American governments and business organizations on economic policy, trade negotiations and trade agreements administration. From 2005-2015 (June) he was the Director of the International Trade and Integration Division for ECLAC, United Nations. From March 2000 to December 1, 2004 he was the General Director of International Affairs of the Ministry of Foreign Affairs of Chile (DIRECON), the equivalent to Vice Minister of International Trade. While fulfilling his duties as General Director, he was responsible for international economic negotiations. He was Chief Negotiator of Chile during the negotiations of the Free Trade Agreement between Chile and the United States, Chief Negotiator of the Trade Pillar in the Association Agreement with the European Union, Chief Negotiator of the FTA Chile and S. Korea, and with EFTA (Norway, Switzerland, Iceland and Liechtenstein). He led the Chilean Delegation to all of the ALCA (FTAA) negotiations (2000-2004). From 1990 until March 2000, he was Regional Adviser to the Executive Secretariat of ECLAC, working directly with the Executive Secretary.
  • Rafael Muñoz Moreno

    Senior Economist for Malaysia, World Bank
    Rafael Muñoz Moreno is the World Bank’s Senior Country Economist for Malaysia since September 2015. He leads the macroeconomic and fiscal policy dialogue between the Government of Malaysia and the World Bank, contributes to the analytical and advisory work on the country’s transformation into a high-income economy, and leads the team that produces the bi-annual Malaysia Economic Monitor. Mr. Muñoz joined the World Bank in 2005 as part of the Young Professional Program. He has worked in the office of the Vice President of the Economic Department and has served as Country Economist in the Africa region. Prior to moving to Malaysia, he was in Mauritius as Country Economist and Resident Representative, coordinating the World Bank work program with Mauritius and Seychelles. Previously, Mr. Muñoz worked in the Spanish Embassy in Tokyo as Economist and in the European Commission as Operation Officer in charge of budget support projects in Latin America. Mr. Muñoz holds a PhD in Economics from the University of Louvain (Belgium) and a European Doctoral Program in Quantitative Economic after attending the London School of Economics. He has published several research papers, mostly on macroeconomic policies, labor economics and business cycles.
  • Giacomo A. M. Ponzetto

    Associate Professor, Department of Economics and Business, University Pompeu Fabra, Barcelona
    Giacomo Ponzetto is a senior researcher at CREI and an associate professor at Universitat Pompeu Fabra and the Barcelona Graduate School of Economics, where he teaches graduate courses in political economics, urban economics and international trade. He is a CEPR research affiliate and an associate editor of the Journal of the European Economic Association. In 2014 he was a visiting professor at Harvard University, where he earned a PhD in Economics in 2009. Before his graduate studies he had been a junior researcher at CeRP (University of Turin and Collegio Carlo Alberto). Dr. Ponzetto’s research focuses on two overlapping themes: the economic effects of legal and political institutions, and the spatial distribution of economic activity. He has studied the impact of citizens’ information on the quality of government and the role of transparency in improving economic policy-making; the spatial architecture of government and the influence of geography on government efficiency; the economic effects of legal rules and legal evolution; and the joint dynamics of city growth, human capital and innovation. His work has appeared in some of the top journals in economics, including the Quarterly Journal of Economics, Journal of Public Economics, Journal of Law, Economics and Organization, Journal of Urban Economics and Journal of Economic Growth.
  • Michael Woolcock

    Lead Social Development Specialist, Development Research Group, World Bank
    Michael Woolcock is Lead Social Development Specialist in the World Bank's Development Research Group, where he was worked since 1998. He is also a (part-time) Lecturer in Public Policy at Harvard University's Kennedy School of Government. His current research focuses on strategies for enhancing state capability for implementation, on crafting more effective interaction between informal and formal justice systems, and on using mixed methods to assess 'complex' development interventions. In addition to more than 50 journal articles and book chapters, he is the co-author or co-editor of seven books, including Contesting Development: Participatory Projects and Local Conflict Dynamics in Indonesia (with Patrick Barron and Rachael Diprose; Yale University Press 2011), which was a co-recipient of the best book prize by the American Sociological Association's section on international development. He has served for many years on the World Bank's Social Development Board and co-founded the Justice for the Poor program; in 2007-2009 he was the founding research director of the Brooks World Poverty Institute at the University of Manchester (on external service leave from the Bank), and in 2002 was the Von Hugel Visiting Fellow at St Edmunds College, University of Cambridge. An Australian national, he completed his undergraduate studies at the University of Queensland, and has an MA and PhD in sociology from Brown University.
  • David Chor

    Associate Professor, Department of Economics, National University of Singapore
    Davin Chor is an Associate Professor at the Department of Economics, National University of Singapore. His research interests are in international trade, political economy and economic history. His work in international trade focuses on understanding how institutional and policy forces affect patterns of comparative advantage and multinational activity. He presently serves as an Associate Editor at the Journal of International Economics and at the Review of International Economics. He is also an Associate Director at the Global Production Networks Centre at the National University of Singapore (GPN@NUS). Davin completed his A.B. in Economics summa cum laude from Harvard University in 2000. He also holds an A.M. in Statistics (2000) and a Ph.D. in Economics (2007) from Harvard.
  • Filippo di Mauro

    European Central Bank
    Filippo di Mauro is Senior Adviser in the Research Department of the European Central Bank (ECB) and chairman of CompNet, a large research network on competitiveness among EU central banks, major international organization and academic institutes. His present research includes: 1) Productivity and resource reallocation using firm level data; and 2) Modelling global linkages and business cycle forecast, including global value chains. Dr. di Mauro has more than 30 years of applied economic experience as economist and research manager in Central Banks (Bank of Italy - 1984-1990, 1996-98), US Federal Reserve Board (May-September 2010), European Central Bank (1998-present) and International Development organizations (Asian Development Bank (1990-94), IMF (1986-88, 1994-96). He joined the ECB since the start of its operations in 1998 and he directed since then (and up to 2010) the international economic analysis and the global economy forecast in its Economics department. Dr. di Mauro has a wide record of publications, including in academic journals such as the Journal of Applied Econometrics, Journal of International Money and Finance, Economic Policy. An economics graduate of University of Rome, di Mauro holds an M.A. and a Ph.D in Economics, from the University of Chicago and the American University, respectively. At present, Dr. di Mauro is Academic Visitor at the National University of Singapore, conducting research on productivity drivers at the firm level and macro impacts of global value chains.
  • Julio E. Revilla

    Lead Economist, World Bank
    Julio E. Revilla is a Lead Economist in the World Bank-Malaysia Knowledge and Research Hub. He was until recently a Program Leader and Lead Economist in Mozambique and Indian Ocean countries, and previously on Angola and Sao Tome and Principe. He has also worked as a Senior Country Economist in Zambia and as a Senior Economist for Brazil. Before joining the World Bank in 2005 he was a Senior Economist for Latin America at the Institute of International Finance, an economic advisor to the Central Bank and to the Ministry of Finance of Nicaragua and an Assistant Professor of Economics at the Universidad Carlos III de Madrid. A Peruvian and Spanish national, he earned his M.A. and Ph. D. in Economics from Boston University. He has published on issues of macroeconomics, economic history, international finance and economic development.
  • Dominick Bartelme

    Assistant Professor of Economics, University of Michigan
    Dominick Bartelme is an economist interested in international trade, economic geography and economic growth. He graduated from the University of Michigan in 2008 with a B.S. in Economics and Mathematics, and received his PhD from the University of California at Berkeley in 2015. Recent research interests include the impact of trade costs on economic geography and the role of intermediate goods linkages in economic development.
  • Mohd Yusof Saari

    Senior Lecturer, Department of Economics, University Putra Malaysia
    Mohd Yusof Saari obtained his Ph.D in Economics from the University of Groningen, the Netherlands. He is currently a lecturer at the Faculty of Economics and Management, Universiti Putra Malaysia. Input-output, social accounting matrix (SAM) and applied general equilibrium models are his area of experts. His publication includes Analisis dan Aplikasi Input-Output (Dewan Bahasa dan Pustaka, 2006), Input-Output Analysis: Foundations and Applications for Policy Analysis in Malaysia (forthcoming) and numerous articles in referred journals related to the applications of input-output and SAM models. Aside to being actively involved in research projects at national and international levels; he also has been appointed as consultant, Technical Working Group, Research Fellow and Steering Committee member for Economic Planning Unit (EPU), Malaysia Palm Oil Board (MPOB), Department of Statistics Malaysia (DOSM), Institute of Labour Market Information & Analysis, Malaysian Institute for Research in Youth Development and Malaysia External Trade Development Corporation (Matrade). Currently, he has been appointed as local expert for sub-regional course on system of environmental-economic accounting (SEEA) by Department of Statistics Malaysia (in collaboration with Statistical Institute for Asia and the Pacific). The Department of Statistics Malaysia also has appointed him as advisor for the development of SEEA in Malaysia. He is a member of International Input-Output Association, European Network for Input-Output Studies and International Association for Research in Income and Wealth.
  • Daniel Lederman

    Lead Economist and Deputy Chief Economist, Latin America and Caribbean
    Daniel Lederman is a Lead Economist and the World Bank’s Deputy Chief Economist for Latin America and the Caribbean. During 2011-12 he led the World Bank's work program on Trade Policy and Integration in the International Trade Department (PRMTR). Since 1995 he held various positions in the Office of the Chief Economist for Latin America and the Caribbean, and during 2005-2011 was Senior Economist in the World Bank's Development Research Group (DECRG). Mr. Lederman has written extensively on a broad set of issues related to economic development, including financial crises, violent crime, the political economy of policy reforms, economic growth, international trade and labor markets. His research has been accepted for publication numerous professional journals, including the American Economic Review, American Journal of Agricultural Economics, Journal of Law and Economics, European Economic Review, Journal of Development Economics, among others. He has authored or coauthored several books, including The Political Economy of Protection, From Natural Resources to the Knowledge Economy, and Does What You Export Matter? He holds a B.A. from Yale University, and M.A. and PhD degrees in International Relations from the Johns Hopkins University’s School of Advanced International Studies (SAIS).
  • Tng Boon Hwa

    Senior Economist, Economic Department, Bank Negara Malaysia
    Tng Boon Hwa is a Senior Economist at the Economics Department of Bank Negara Malaysia. Currently in charge of Research Advisory, his duties include undertaking specialised research to support the central bank’s policy mandates and overseeing research activities in the central bank. Since joining the central bank in 2011, he has published papers in journals and the central bank’s working paper series covering a wide range of topics. These include analysis on the heterogeneity of household spending behaviour across the income distribution, interactions between household balance sheets and aggregate spending, the ASEAN economies’ exposures to external vulnerabilities, the measurement of financial stress and the role of monetary policy under financial stress. Boon Hwa was recently awarded the Young Malaysian Research Prize 2016 by the World Bank Development Research Group for his paper on “The Transmission of Financial Stress and its Interactions with Monetary Policy Responses in the ASEAN-5 Economies. He holds B.A. and M.A. degrees in Economics from the University of Western Ontario, and is currently a Ph.D candidate at University of Malaya.
  • Tatiana Didier

    Research Economist, Latin America and the Caribbean, World Bank
    Tatiana Didier is a Research Economist in the World Bank’s Office of the Chief Economist for Latin America and the Caribbean. She obtained a Ph.D. in Economics from MIT in 2008. She has published in the area of international economics. She is currently doing research on the international finance, with a focus on international capital flows, the role of institutional investors, financial crises, and their implications for the development of domestic financial systems.
  • The Rising South - A Latin America Perspective and Implications for East Asia and Malaysia
    Augusto de la Torre, Tatiana Didier, Alain Ize, Daniel Lederman, and Sergio L. Schmukler (World Bank). The world economy is not what it used to be twenty years ago. For most of the 20th century, the world economy was characterized by developed (North) countries acting as 'center' to a 'periphery' of developing (South) countries. However, the recent rise of developing economies suggests the need to go beyond this North-South dichotomy. This tectonic re-configuration of the global landscape has brought about significant changes to countries in the Latin America and Caribbean (LAC) region. The time is ripe for an in-depth analysis of the dynamics and nature of LAC's external connections. This latest volume in the World Bank Latin American and Caribbean Studies series will focus on the implications of these trends for the economic development of LAC countries. In particular, trade, financial, macroeconomic, and sectoral shifts, as well as labor-market aspects will be systematically analyzed.
  • Urban Networks: Connecting Markets, People, and Ideas
    Edward L. Glaeser (Harvard University), Giacomo A. M. Ponzetto (University Pompeu Fabra, Barcelona), and Yimei Zou (University Pompeu Fabra, Barcelona). Should China build mega-cities or a network of linked middle-sized metropolises? Can Europe’s mid-sized cities compete with global agglomeration by forging stronger inter-urban links? This paper examines these questions within a model of recombinant growth and endogenous local amenities. Three primary factors determine the trade-off between networks and big cities: local returns to scale in innovation, the elasticity of housing supply, and the importance of local amenities. Even if there are global increasing returns, the returns to local scale in innovation may be decreasing, and that makes networks more appealing than mega-cities. Inelastic housing supply makes it harder to supply more space in dense confines, which perhaps explains why networks are more popular in regulated Europe than in the American Sunbelt. Larger cities can dominate networks because of amenities, as long as the benefits of scale overwhelm the downsides of density. In our framework, the skilled are more likely to prefer mega-cities than the less skilled, and the long-run benefits of either mega-cities or networks may be quite different from the short-run benefits.
  • Internalizing Global Value Chains: A Firm-Level Analysis
    Laura Alfaro (Harvard Business School), Pol Antras (Harvard University), Davin Chor (National University of Singapore), and Paola Conconi (Université Libre de Bruxelles). In recent decades, technological progress in information and communication technology and falling trade barriers have led firms to retain within their boundaries and in their domestic economies only a subset of their production stages. A key decision facing firms worldwide is the extent of control to exert over the different segments of their production processes. Building on Antràs and Chor (2013), we describe a property-rights model of firm boundary choices along the value chain. To assess the evidence, we construct firm-level measures of the upstreamness of integrated and non-integrated inputs by combining information on the production activities of firms operating in more than 100 countries with Input-Output tables. In line with the model's predictions, we find that whether a firm integrates upstream or downstream suppliers depends crucially on the elasticity of demand for its final product. Moreover, a firm's propensity to integrate a given stage of the value chain is shaped by the relative contractibility of the stages located upstream versus downstream from that stage. Our results suggest that contractual frictions play an important role in shaping the integration choices of firms around the world.
  • Linkages and Economic Development
    Dominick Bartelme (University of Michigan) and Yuriy Gorodnichenko (University of California, Berkeley). Specialization is a powerful source of productivity gains, but how production networks at the industry level are related to aggregate productivity in the data is an open question. We construct a database of input-output tables covering a broad spectrum of countries and times, develop a theoretical framework to derive an econometric specification, and document a strong and robust relationship between the strength of industry linkages and aggregate productivity. We then calibrate a multisector neoclassical model and use alternative identification assumptions to extract an industry-level measure of distortions in intermediate input choices. We compute the aggregate losses from these distortions for each country in our sample and find that they are quantitatively consistent with the relationship between industry linkages and aggregate productivity in the data. Our estimates imply that the TFP gains from eliminating these distortions are modest but significant, averaging roughly 10% for middle and low income countries.
  • The Rise of China and Labor Market Adjustments in Latin America
    Erhan Artuc (World Bank), Daniel Lederman (World Bank), and Luis Diego Rojas (University of Maryland). This paper assesses the impact of the rise of China on the trade of Latin American and Caribbean economies. The study proposes an index to measure the impact on trade, which suggests sizable effects, especially in Argentina, Brazil, Chile, Honduras, Mexico, and Paraguay. The paper uses the index and a model of labor mobility, to calculate the impact of China's growth on labor markets in Argentina, Brazil, and Mexico. The resulting evidence suggests that the rise of China has had positive effects on agriculture and mining in Argentina and Brazil, which offset negative impacts on manufacturing industries, thus leaving total employment and real wages virtually unchanged in the long run. In contrast, the estimated impacts of China's rise on Mexico imply that the sizable shock to manufacturing was not offset by the positive shocks on mining and agriculture, reducing employment in the long run. The paper also discusses the effect of China on the degree of informality in these three economies and contrasts short-run and long-run effects on employment and wages across industries.

Flagship Report Presentation: The Rising South – A Latin America Perspective and Implications for East Asia and Malaysia

Presentation 1         Presentation 2         Presentation 3

Policy Panel: The Trans-Pacific Partnership (TPP) as an Opportunity for Integration

Presentation 4         Presentation 5         Presentation 6

Urban Networks: Connecting Markets, People, and Ideas

Presentation 7         Presentation 8        

Internalizing Global Value Chains: A Firm-Level Analysis

Presentation 9         Presentation 10        

Linkages and Economic Development

Presentation 11         Presentation 12

The Rise of China and Labor Market Adjustments in Latin America

Presentation 13         Presentation 14

  • RSVP: Contact Marie Stella Ambrose (msambrose@worldbank.org) with your full name, affiliation, and passport number (or Malaysian identity card number) by Friday, May 13, 2016 for registration