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Working Paper
An Anatomy of U.S. Establishments’ Trade Linkages in Global Value Chains
Global value chains (GVC) are a pervasive feature of modern production, but they are hard to measure. Using U.S. Census microdata, we develop novel measures of the linkages between U.S. manufacturing establishments’ imports and exports. We document three new GVC patterns. First, for every dollar of exports, imported inputs represent 13 cents in 2002 and 20 cents by 2017, substantially higher than what aggregate data suggests. Second, we find strong complementarities between input and output markets reflected in “round-trip” trade linkages where an establishment sources inputs from and ...
Working Paper
Inflation and Deflationary Biases in the Distribution of Inflation Expectations: Theory and Empirical Evidence from Nine Countries
We explore the consequences of losing confidence in the price stability objective of central banks by studying the resulting inflation and deflationary biases in medium-run inflation expectations. In a model with heterogeneous household perceptions of an occasionally binding zero-lower-bound constraint and of monetary policy objectives, we show that the estimated model-implied distribution of households' inflation expectations matches several characteristics of the empirical distribution when featuring both inflation and deflationary biases. We then directly identify these biases using unique ...