Department of Economics
Cambridge, MA 02138
NBER Program Affiliations:
NBER Affiliation: Faculty Research Fellow
NBER Working Papers and Publications
|July 2017||Geography, Search Frictions and Endogenous Trade Costs|
with Giulia Brancaccio, Theodore Papageorgiou: w23581
We leverage detailed data on vessel movements and shipping contracts to shed new light on world trade costs and trade flows. The data reveal new facts about shipping patterns, and motivate us to build a framework modeling the behavior of exporters and ships. Our framework has two novel features: (i) trade costs are endogenous and determined jointly with trade flows; as a result, they depend on the entire network of countries; (ii) search frictions between exporters and ships can limit trade. We estimate the model and recover flexibly the matching process between ships and exporters. Endogenous trade costs provide a novel link to understand trade patterns and we showcase this by considering the impact of (i) an improvement in shipping efficiency; (ii) a slow-down in China; (iii) the opening...
|September 2015||Identification of Counterfactuals in Dynamic Discrete Choice Models|
with Paul T. Scott, Eduardo Souza-Rodrigues: w21527
Dynamic discrete choice models (DDC) are nonparametrically not identified. However, the non-identification of DDC models does not necessarily imply non-identification of their associated counterfactuals. We provide necessary and sufficient conditions for the identification of counterfactual behavior and welfare for a broad class of counterfactuals. The conditions are simple to check and can be applied to virtually all counterfactuals in the DDC literature. To explore how robust counterfactuals can be to model restrictions in practice, we consider a numerical example of a monopolist’s entry problem, as well as an empirical application of agricultural land use. For each case, we provide relevant examples of both identified and non-identified counterfactuals.
|May 2014||Detection and Impact of Industrial Subsidies: The Case of World Shipbuilding|
This paper provides a model-based empirical strategy to, (i) detect the presence and gauge the magnitude of government subsidies and (ii) quantify their impact on production reallocation across countries, industry prices, costs and consumer surplus. I construct and estimate an industry model that allows for dynamic agents in both demand and supply and apply my strategy to world shipbuilding, a classic target of industrial policy. I find strong evidence consistent with China having intervened and reducing shipyard costs by 13-20%, corresponding to 1:5 to 4:5 billion US dollars, between 2006 and 2012. The subsidies led to substantial reallocation of ship production across the world, with Japan, in particular, losing significant market share. They also misaligned costs and production, while l...