The latest CEPII Policy Brief analyses how trade dependencies have evolved over time to better understand how they relate to vulnerabilities. The paper focuses on the EU-27 area and apply the bottom-up approach laid out by the European Commission (EC) using trade data from 1996 to 2019. The number of dependent products has shown no clear pattern since the mid-1990s, nor has their sectoral composition. The geography of dependencies has, however, evolved towards dependencies concentrated on Chinese suppliers, but this shift had already occurred in 2010. The products identified as dependent exhibit significant churning over time: one out of five dependent products in 2018 was not identified as such one year later in 2019 and close to half of dependent products in 2014 were not identified as such five years later. Vincent Vicard and Pauline Wibaux

The CEPII Working Paper explores how, in the French manufacturing sector, producer prices vary with market power during a severe episode of energy price hikes (between January 2020 and February 2023). Authors find that prices in the least competitive sectors increased significantly more than energy price increases since the beginning of 2020 would justify, suggesting that firms in these sectors used the overall inflationary pressure to increase their margins. For instance, the food industry displayed an “excess pass-through” of 10 p.p., so a 10% increase of prices above the cost shock. This finding is in line with recent inflation figures that show that food is among the main drivers of price increases. In addition, the paper suggests that the association between markup and pass-through is even higher when markup dispersion is low, consistent with the argument that firms engage in price hikes when they expect their competitors to do the same. Axelle Arquié and Malte Thie

International Economics is a peer-reviewed journal devoted to the publication of research in the area of applied international economics. The journal especially welcomes empirical contributions that include, but are not limited to, topics in international trade, commercial policy, open economy macroeconomics, international finance, exchange rates, financial and monetary policies, economic development, migration and factor movements.
The August 2023 issue is now out and that of October 2023 is in progress but contains articles that are final and fully citable.