Department of Economics
University of California, Berkeley
687 Evans Hall
Berkeley, CA 94720
NBER Program Affiliations:
NBER Affiliation: Faculty Research Fellow
Institutional Affiliation: University of California at Berkeley
NBER Working Papers and Publications
|July 2018||Granular Comparative Advantage|
with Oleg Itskhoki: w24807
Large firms play a pivotal role in international trade, shaping the export patterns of countries. We propose and quantify a granular multi-sector model of trade, which combines fundamental comparative advantage across sectors with granular comparative advantage embodied in outstanding individual firms. We develop an SMM-based estimation procedure, which takes full account of the general equilibrium of the model, to jointly estimate these fundamental and granular forces using French micro-data with information on firm domestic and export sales across manufacturing industries. We find that granularity accounts for about 20% of the variation in realized export intensity across sectors, and is more pronounced in the most export-intensive sectors. In turn, idiosyncratic firm dynamics accounts...
|May 2018||Optimal Spatial Policies, Geography and Sorting|
with Pablo Fajgelbaum: w24632
We study optimal spatial policies in a quantitative trade and geography framework with spillovers and spatial sorting of heterogeneous workers. We characterize the spatial transfers that must hold in efficient allocations, as well as labor subsidies that can implement them. There exists scope for welfare-enhancing spatial policies even when spillovers are common across locations. Using data on U.S. cities and existing estimates of the spillover elasticities, we find that the U.S. economy would benefit from a reallocation of workers to currently low-wage cities and from a greater mixing of high and low skill workers in these locations. Inefficient sorting may lead to substantial welfare costs.
|April 2018||Firm Sorting and Agglomeration|
The distribution of firms in space is far from uniform. Some locations host the most productive large firms, while others barely attract any. In this paper, I study the sorting of heterogeneous firms across locations and analyze policies designed to attract firms to particular regions (place-based policies). I first propose a theory of the distribution of heterogeneous firms in a variety of sectors across cities. Aggregate TFP and welfare depend on the extent of agglomeration externalities produced in cities and on how heterogeneous firms sort across them. The distribution of city sizes and the sorting patterns of firms are uniquely determined in equilibrium. This allows me to structurally estimate the model, using French firm-level data. I find that nearly half of the observed productivit...
Published: Cecile Gaubert, 2018. "Firm Sorting and Agglomeration," American Economic Review, vol 108(11), pages 3117-3153.
|June 2016||Tourism and Economic Development: Evidence from Mexico's Coastline|
with Benjamin Faber: w22300
Tourism is a fast-growing services sector in developing countries. This paper combines a rich collection of Mexican microdata with a quantitative spatial equilibrium model and a new empirical strategy to study the long-term economic consequences of tourism both locally and in the aggregate. We find that tourism causes large and significant local economic gains relative to less touristic regions that are in part driven by significant positive spillovers on manufacturing. In the aggregate, however, these local spillovers are largely offset by reductions in agglomeration economies among less touristic regions, so that the national gains from trade in tourism are mainly driven by a classical market integration effect.
Published: Benjamin Faber & Cecile Gaubert, 2019. "Tourism and Economic Development: Evidence from Mexico’s Coastline," American Economic Review, vol 109(6), pages 2245-2293.