Recent Working Papers
In Search of the Armington Elasticity (with Robert C. Feenstra, Maurice Obstfeld, and Katheryn N. Russ)
Accepted The Review of Economics and Statistics
The elasticity of substitution between goods from different countries is important for many questions in international economics, but its magnitude is subject to debate: the "macro" elasticity between home and import goods is often found to be smaller than the "micro" elasticity between foreign sources of imports. We explore estimation techniques for the macro and micro elasticities using both simulated data from a Melitz-style model, and highly disaggregate U.S. production data matched to Harmonized System trade data. We find that in up to one-half of goods there is no significant difference between the macro and micro elasticities, but in the other half of goods the macro elasticity is significantly lower than the micro elasticity, even when they are estimated at the same level of disaggregation.
Global Supply Chains, Firm Scope and Vertical Integration: Evidence from China
Conditionally Accepted The Journal of Economic Geography
This paper utilizes geographic variation in Chinese processing trade and foreign ownership to evaluate the role of value chains in determining the organization of global trade. I provide evidence that the value chain position of intermediates along with the degree of substitutability across stages of the value chain provide incentives for firms to own intermediate good suppliers. Additionally, I find support for the role of firm lUnevel heterogeneity in incentivizing vertically integration of the the supply chain.
Intermediate Good Sourcing, Wages and Inequality: From Theory to Evidence
The growth of intermediate goods and intra-firm trade makes it crucially important to understand and quantify how these trade flows affect labor. I present a model which investigates the employment and wage consequences of offshoring and outsourcing. I model the decisions regarding outsourcing and offshoring as being driven by labor market frictions. Testing the predictions of my theoretical model, I find evidence that ownership plays an important role in determining the effect of trade on domestic wages and inequality.
Globalization and Labor Market Dynamics (available upon request)
This paper establishes the causal link between the rise of offshoring and the decline of labor market dynamics in the U.S. of the past two decades. We find that offshoring has played a significant role in decreasing reallocation rates in the U.S. while simultaneously increasing these rates in developing countries with whom we engage in intermediates good trade. Utilizing identification techniques developed by the literature studying the labor market effects of increased import competition (e.g. Acemoglu et al., 2015) we identify the causal impact of increases import penetration of intermediate goods from China on labor markets fluidity in the United States in downstream industries. We find that industries that are more exposed to increased intermediate goods imports from China see larger declines in the share of offshorable occupation employment along with faster declines in labor market dynamics. These two facts provide suggestive evidence that the declining rates of labor market dynamics are in part due to a compositional shift away from occupations that are both offshorable and volatile.