Working Papers
Trade, Reform, and Structural Transformation in South Korea (joint with Caroline Betts and Rubina Verma) - Under review
A two country, three sector hybrid model of structural change with distortionary government policies is used to quantify the impact of international trade and trade reform for industrialization. The model features Armington motivated trade in agriculture and industry, and a novel representation of trade reform as a time sequence of import tariffs, export subsidies and lump sum government transfers of net tariff revenue. We calibrate our economy to data on South Korea and the OECD, inputting time series of country and sector specific labor productivity, tariffs and export subsidies which determine evolution of the effective pattern of comparative advantage. The model’s predicted reallocations of Korean labor from agriculture into industry and services from 1963 through 2000 are quantitatively similar to those in the data. Incorporating trade and measured Korean trade reform are both important for the accuracy of this predicted structural change, although international real income differences under non-homothetic preferences primarily determine trade and specialization patterns rather than comparative advantage. Counterfactually eliminating a) international trade b) international labor productivity differentials c) post 1967 Korean tariff reform and d) post 1967 industrial export subsidy reform increase the model’s SSE by 91 percent, 56 percent, 27 percent, and 62 percent respectively.
Latest Draft - July, 2013
Old version - Feb, 2011
Exporters During the Trade Collapse: The (Surprising) Resiliency of the Small Exporter (joint with Kensuke Teshima and Enrique Seira) - Under review
How did small exporters fare relative to large exporters during the 2008-09 crisis? Examining the performance of Mexican exporters reveals that crisis did not make smaller exporters more likely to exit, grow less, or expand their product line less. Workhorse models of trade, in response to an aggregate demand or credit shock, would predict the opposite. The same models, however, are consistent with the data before the crisis: within industry, (i) firm exit rate is decreasing in size; (ii) conditional on survival, export growth is largely decreasing in size; (iii) product line expansion is increasing in size. In the post-crisis period small exporters in industries classified as non-durable or financially less dependent, or those that were less dependent on maquiladora exports experienced a larger negative effect on product line expansion. But, their export growth and exit rate remained unaffected, as seen during the crisis.
Latest draft - Dec, 2013
Old versions
July, 2013
Oct, 2012 (circulated with the title "Did Trade Crisis Affect Different Exporters Differently? Case of Mexico")
A two country, three sector hybrid model of structural change with distortionary government policies is used to quantify the impact of international trade and trade reform for industrialization. The model features Armington motivated trade in agriculture and industry, and a novel representation of trade reform as a time sequence of import tariffs, export subsidies and lump sum government transfers of net tariff revenue. We calibrate our economy to data on South Korea and the OECD, inputting time series of country and sector specific labor productivity, tariffs and export subsidies which determine evolution of the effective pattern of comparative advantage. The model’s predicted reallocations of Korean labor from agriculture into industry and services from 1963 through 2000 are quantitatively similar to those in the data. Incorporating trade and measured Korean trade reform are both important for the accuracy of this predicted structural change, although international real income differences under non-homothetic preferences primarily determine trade and specialization patterns rather than comparative advantage. Counterfactually eliminating a) international trade b) international labor productivity differentials c) post 1967 Korean tariff reform and d) post 1967 industrial export subsidy reform increase the model’s SSE by 91 percent, 56 percent, 27 percent, and 62 percent respectively.
Latest Draft - July, 2013
Old version - Feb, 2011
Exporters During the Trade Collapse: The (Surprising) Resiliency of the Small Exporter (joint with Kensuke Teshima and Enrique Seira) - Under review
How did small exporters fare relative to large exporters during the 2008-09 crisis? Examining the performance of Mexican exporters reveals that crisis did not make smaller exporters more likely to exit, grow less, or expand their product line less. Workhorse models of trade, in response to an aggregate demand or credit shock, would predict the opposite. The same models, however, are consistent with the data before the crisis: within industry, (i) firm exit rate is decreasing in size; (ii) conditional on survival, export growth is largely decreasing in size; (iii) product line expansion is increasing in size. In the post-crisis period small exporters in industries classified as non-durable or financially less dependent, or those that were less dependent on maquiladora exports experienced a larger negative effect on product line expansion. But, their export growth and exit rate remained unaffected, as seen during the crisis.
Latest draft - Dec, 2013
Old versions
July, 2013
Oct, 2012 (circulated with the title "Did Trade Crisis Affect Different Exporters Differently? Case of Mexico")
Work in Progress
Gains from Trade: Does Sectoral Heterogeneity Matter? (joint with Kei-Mu Yi and Hakan Yilmazkuday)
Informality in India (joint with Rubina Verma)
Productivity Differences Between and Within Firms (joint with Kensuke Teshima)
Informality in India (joint with Rubina Verma)
Productivity Differences Between and Within Firms (joint with Kensuke Teshima)