Search Results
Working Paper
Deindustrialization and Industry Polarization
We add to recent evidence on deindustrialization and document a new pattern: increasing industry polarization over time. We assess whether these new features of structural change can be explained by a dynamic open economy model with two primary driving forces, sector-biased productivity growth and sectoral trade integration. We calibrate the model to the same countries used to document our patterns. We find that sector-biased productivity growth is important for deindustrialization by reducing the relative price of manufacturing to services, and sectoral trade integration is important for ...
Working Paper
Deindustrialization and Industry Polarization
We add to recent evidence on deindustrialization and document a new pattern: increasing industry polarization over time. We assess whether these new features of structural change can be explained by a dynamic open economy model with two primary driving forces, sector-biased productivity growth and sectoral trade integration. We calibrate the model to the same countries used to document our patterns. We find that sector-biased productivity growth is important for deindustrialization by reducing the relative price of manufacturing to services, and sectoral trade integration is important for ...
Working Paper
Trade barriers and the relative price tradables
In this paper I quantitatively address the role of trade barriers in explaining why prices of services relative to tradables are positively correlated with levels of development across countries. I argue that trade barriers play a crucial role in shaping the cross-country pattern of specialization across many heterogenous tradable goods. The pattern of specialization feeds into cross-country productivity differences in the tradables sector and is reflected in the relative price of services. I show that the existing pattern of specialization implies that the tradables-sector productivity gap ...
Journal Article
U.S. productivity growth flowing downstream
Measurements of U.S. productivity growth have declined, particularly in the high-tech sector. This may reflect increased U.S. specialization in upstream activities in the global supply chain. Those activities tend to experience slower productivity growth.
Journal Article
A real appreciation for recent exchange-rate movements
Recent movements in real exchange rates? a measure of relative prices? in the euro area and Japan are consistent with long-run adjustments toward levels predicted by economic fundamentals.
Report
Navigating the Structure of the Global Economy
The Globalization and Monetary Policy Institute?s primary focus is developing a better understanding of how the process of deepening economic integration among countries of the world, or globalization, alters the environment in which U.S. monetary policy decisions are made. In this article, I discuss how my research contributes to this mission. I emphasize the interaction between increased globalization and the changing structure of economic activity, and how these phenomena affect the ways economists evaluate key economic trade-offs.
Working Paper
Trade Integration, Global Value Chains and Capital Accumulation
Motivated by increasing trade and fragmentation of production across countries since World War II, we build a dynamic two-country model featuring sequential, multistage production and capital accumulation. As trade costs decline over time, global-value-chain (GVC) trade expands across countries, particularly more in the faster growing country, consistent with the empirical pattern. The presence of GVC trade boosts capital accumulation and economic growth and magnifies dynamic gains from trade. At the same time, endogenous capital accumulation shapes comparative advantage across countries, ...
Report
Conference on International Economics
Globalization has led to increased integration across countries in goods markets and financial markets and has changed the environment in which policy operates. As a result, researchers in the various subfields have developed new methods to study and measure the consequences of globalization. To better understand these developments, the Federal Reserve Bank of Dallas? Globalization Institute and the University of Houston brought together researchers from academic institutions and the Federal Reserve System for a conference focusing on international trade and prices and on international ...
Working Paper
Trade Liberalization versus Protectionism: Dynamic Welfare Asymmetries
We investigate whether the losses from an increase in trade costs (protectionism) are equal to the gains from a symmetric decrease in trade costs (liberalization). We incorporate dynamics through capital accumulation into a standard Armington trade model and show that the welfare changes are asymmetric: Losses from protectionism are smaller than the gains from liberalization. In contrast, standard static trade models imply that the losses equal the gains. The intuition for asymmetry in our model is that, following protectionism, the economy can coast off of previously accumulated capital ...
Working Paper
Structural Change and Global Trade
Services, which are less traded than goods, rose from 58 percent of world expenditure in 1970 to 79 percent in 2015. Using a Ricardian trade model incorporating endogenous structural change, we quantify how this substantial shift in consumption has affected trade. Without structural change, we find that the world trade to GDP ratio would be 15 percentage points higher by 2015, about half the boost delivered from declining trade costs. In addition, this structural change has lowered the global welfare gains from trade integration by almost 40 percent over the past four decades. Absent further ...