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Working Paper
Immigration policy and counterterrorism
A terrorist group, based in a developing (host) country, draws unskilled and skilled labor from the productive sector to conduct attacks at home and abroad. The host nation chooses proactive countermeasures, while accounting for the terrorist campaign. Moreover, a targeted developed nation decides its optimal mix of immigration quotas and defensive counterterrorism actions. Even though proactive measures in the host country may not curb terrorism at home, it may still be advantageous in terms of national income. Increases in the unskilled immigration quota augment terrorism against the ...
Working Paper
On Trade Policy Preference and Offshoring Ties
This paper unpacks the role of the domestic content of imports as a novel source of policy interdependence along the global supply chain. We show how a rise in local contents embodied in imports can skew national trade policy preferences, and pull upstream and downstream countries in asymmetric ways with respect to (i) the nature of unilaterally optimal trade policy prescriptions, and (ii) the attractiveness of leveraging market access-based dispute settlement procedures. We discuss the pros and cons of deep trade integration as a remedy, involving well-enforced labor standards both upstream ...
Journal Article
Eighth District population growth follows national pattern
Working Paper
Trade and Terrorism: A Disaggregated Approach
This paper constructs a model of trade consequences of terrorism, where firms in trading nations face different costs arising from domestic and transnational terrorism. Using dyadic dataset in a gravity model, we test terrorism?s effects on overall trade, exports, and imports, while allowing for disaggregation by primary commodities and manufacturing goods. While terrorism has little or no influence on trade of primary products, terrorism reduces trade of manufactured goods. This novel finding pinpoints the avenue by which terrorism harms trade and suggests why previous studies that looked at ...
Working Paper
The Effects of Terror on International Air Passenger Transport: An Empirical Investigation
This paper presents a theoretical model (adapted from the structural gravity model by Anderson and van Wincoop, 2003) to capture the effects of terrorism on air passenger traffic between nations affected by terrorism. We then use equations derived from this model, in conjunction with alternative functional forms for trade costs, to estimate the effects of terrorism on bilateral air passenger flows from 57 source countries to 25 destination countries for the period of 2000 to 2014. We find that an additional terrorist incident results in approximately a 1.2% decrease in the bilateral air ...
Journal Article
What Is Driving Unauthorized Immigration to the U.S.?
Unauthorized immigration to the U.S. has risen and fallen over time. What factors are behind a recent increase in southwestern border crossings?
Working Paper
Effects of Credit Supply on Unemployment and Inequality
The Great Recession, which was preceded by the financial crisis, resulted in higher unemployment and inequality. We propose a simple model where firms producing varieties face labor-market frictions and credit constraints. In the model, tighter credit leads to lower output, lower number of vacancies, and higher directed-search unemployment. Where workers are more productive at higher levels of firm output, lower credit supply increases firm capital intensity, raises inequality by increasing the rental of capital relative to the wage, and has an ambiguous effect on welfare. At initial high ...
Working Paper
A Theoretical Treatment of Foreign Fighters and Terrorism
The paper offers a game-theoretical model that includes three participants – the terrorist organization, its foreign fighters, and the adversarial host government. In stage 1, the terrorist group induces foreign fighters to emigrate through wage incentives, while the host government deters these fighters through proactive border security. Foreign fighters decide whether to emigrate from their source country (extensive margin) in stage 2, after which these fighters determine their level of attacks (intensive margin) in stage 3. Comparative statics to the Nash equilibrium are tied to changes ...