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Could the BRICS countries have formed a sustainable economic and monetary union (EMU) if they had decided to do so in the early 2000s? Our sustainability criterion is that the macroeconomic imbalances of the countries should not deviate too far from each other. We consider a convergence-based approach to quantify such a situation. We investigate a scenario where each country’s bilateral nominal exchange rate is defined in relation to a central rate defined by considering a basket of the various BRICS national currencies. We find that the group would not have formed a sustainable EMU from the late 2000s onwards. We conclude that this makes the project of de-dollarizing their respective economies not necessarily viable, unless the group chooses a proper exchange rate regime.
Abstract This paper examines how firms responded to the disruptions caused by the global supply chain (GSC) shocks induced by the COVID‐19 pandemic. Leveraging firm‐level trade data from France, we analyze shifts in export and import values and prices in response to transportation bottlenecks and pandemic containment measures in partner countries. Our findings reveal that firms adapted to these shocks by temporarily scaling back trade volumes and dropping varieties. During the recovery phase, supply chain bottlenecks stoked price hikes, disproportionately affecting upstream industries. Furthermore, we demonstrate that firms using industrial robots in production and those with prudent inventory management practices were more resilient to the pandemic shock.
The African Continental Free Trade Area (AfCFTA) seeks to establish a single market for goods and services, enhance intra-African trade, and promote sustainable socioeconomic development. However, achieving these goals must be carefully balanced against the continent's persistent challenges, including climate change and limited electricity access. This paper explores the trade-climate-energy nexus in Africa using MIRAGE-Power, a dynamic computable general equilibrium (CGE) model which captures interactions between trade and energy systems. We evaluate several scenarios: the standalone implementation of AfCFTA, as well as combinations of AfCFTA with climate policy measures such as the adoption of countries' Nationally Determined Contributions (NDCs), a carbon pricing scheme based on the IMF's international carbon price floor, and a coordinated mitigation effort proportional to national emissions. Our results indicate that aligning trade and climate policies, particularly through power sector decarbonization and regional grid integration, can generate mutually reinforcing benefits. While climate policies pose trade-offs with economic growth and energy access, a well-designed, equitable carbon pricing framework can mitigate these tensions. Reinvesting carbon revenues in renewable energy and cross-border electricity infrastructure can further support Africa's green transition while improving energy access across the continent.
This study investigates the evolution of France's carbon footprint from 2000 to 2014, with a particular focus on the role of international trade. During this period, France's territorial emissions decreased by 18%, yet its consumption-based footprint declined by only 5%. This divergence reflects an increase in emissions embedded in imports, which grew from 45% to 54% of the total. To analyze these dynamics, we develop a novel structural decomposition framework that disentangles the contributions of scale, composition, and technique effects from a consumption perspective. Our approach extends existing methods by explicitly distinguishing between domestic and foreign influences, and by separately analyzing trade openness and the geographic reallocation of imports. The results highlight the dominance of the technique effect in reducing emissions (-28%), driven primarily by efficiency improvements abroad rather than domestic progress. By contrast, the geographic composition effect substantially increased emissions (+18%), particularly before 2008, when France's import sourcing shifted toward more carbon-intensive trading partners such as China. France's situation is emblematic of economies that have already achieved relatively low domestic emissions-through nuclear energy and de-industrialization-and have thus become increasingly dependent on foreign improvements for further reductions. This reliance raises concerns about the externalization of mitigation outcomes and underscores the limits of climate strategies focused solely on territorial emissions. Our findings call for stronger coordination between trade and climate policies to ensure that future decarbonization pathways remain consistent with global mitigation objectives.
