Completed Papers
Trade and Prices with Heterogeneous Firms (Job Market Paper) Original Draft: November 15, 2007; Revised: January 10, 2008
This paper estimates a heterogeneous firms trade model using disaggregate data on export values and prices. Prices contain information about differences in product quality across firms and countries that helps identify key mechanisms in the model. Examining within-country variation in export prices across destination markets, I find that prices behave in a manner inconsistent with the benchmark model that ignores product quality differences across firms. In doing so, I demonstrate that export prices in most sectors are consistent with a model in which high productivity firms choose to produce high quality goods and charge high prices. Using model estimates, I also quantify the role of endogenous non-tradability in accounting for variation in prices and trade flows, and construct an index of cross-country quality and variety within sectors.
Work in Progress
“Production Sharing and Intermediate Goods in International Trade” (with Guillermo Noguera)
At least half of all international goods trade is trade in intermediate inputs. This trade in intermediates is direct evidence of production sharing across borders. Empirical work on the causes and consequences trade in intermediates has been hampered by data limitations. We aim to fill this gap by combining a new OECD dataset of input-output tables for 37 countries with data on bilateral trade. Combining these sources allows us to construct an effectively closed world economy and track the content produced in each country to the final destination at which it is consumed, thereby constructing a dataset of trade in bilateral value-added. This bilateral trade in content presents a more accurate picture of international linkages than existing data on gross bilateral trade. We use this data to study patterns of trade and production sharing, the factor content of bilateral trade, and the role of trade in generating income differences.
“Transport Costs and Trade in the Interwar Period” (draft available upon request)
Estevadeordal,
Frantz, and Taylor (QJE 2003) argue that increased transport costs
account for a large share of the decline in trade during the interwar
period. Using alternative data and narrative evidence, I argue this
emphasis is misplaced and that trade would have been even lower if not
for a decline in transport costs during these years.
“Heterogeneous Firms, Prices, and Markups in General Equilibrium”
Recent papers studying trade and markups with heterogeneous firms have been developed in partial equilibrium. This paper uses preferences introduced by Peter Neary to extend these results to general equilibrium in order to study prices across countries and the pro-competitive effects of liberalization.