Journal of International Economics最新文献

We examine the effects of unilateral structural reforms within a currency union. Focusing on the surge of German competitiveness following the introduction of the Euro, we first provide reduced-form causal evidence supporting the notion that German structural labor-market reforms in the early 2000s led to a crowding-out of manufacturing employment in other Eurozone economies. To assess the impact of this German competitiveness shock, we build a quantitative multi-sector trade model that features downward nominal wage rigidities, endogenous labor supply, unemployment-insurance benefits and international savings. The fixed nominal exchange rate can create binding nominal rigidities in response to a foreign real supply shock – like the one prompted by the German reforms – resulting in significant contraction of manufacturing sectors and increased involuntary unemployment across other Eurozone countries. We consider a number of counterfactual scenarios, such as the impact of German labor-market reforms in the absence of a fixed exchange-rate regime, the role of coordinated reforms within the Eurozone and a higher average inflation rate.

Access to foreign exchange (FX) liquidity is crucial to the growth and stability of emerging market economies. We examine the impact of U.S. dollar liquidity shocks on firm investments in Korea by constructing a dataset that merges four distinct micro-level data spanning ten years from 2006 to 2015. We trace the path of FX liquidity from the international financial market to Korean banks and subsequently to listed firms. During international liquidity shocks, banks borrow less FX but pay higher interest rates. Weak banks, whose FX borrowing rates are sensitive to these shocks, reduce their FX credit supply to firms. Among the FX loan-reliant firms that are highly productive, those borrowing from weak banks reduce their investments. This channel of FX borrowing and lending accounts for 19% of the decline in the investment of listed firms during the peak of the Global Financial Crisis.

This paper studies the differential effects of capital controls (CCs) on firms’ performance depending on the firm’s production technology and export status. We empirically characterize the firm’s responses to the introduction of a CC using the Chilean encaje implemented between 1991 and 1998. Motivated by the empirical insights, we build a general equilibrium model with heterogeneous firms, financial constraints and international trade and calibrate it to the Chilean economy. We find that CCs have heterogeneous effects on firms. Exporting firms operating in more capital-intensive sectors are more negatively affected than exporting firms operating in less capital-intensive sectors. Non-exporting firms in capital-intensive sectors experience more negative effects on capital than firms in less-capital intensive sectors, but the opposite is true for domestic sales. These results are a consequence of the increase in financing costs, the depreciation of the real exchange rate, and compositional effects on the mass of exporters and non-exporters.

How can a country design economic sanctions to maximize their economic cost to the sanctioned country at the lowest cost to the sanctioner? I consider this problem from the perspective of international trade and draw a close connection between trade restrictions as economic sanctions and trade restrictions as terms-of-trade manipulation. This connection has useful implications for the design of trade taxes as sanctions: Small sanctions increase welfare in the sanctioning country. Sanctions target the same goods as terms-of-trade manipulation. Sanctions ignore elasticities of demand and supply in the sanctioning country.

China’s rapid export growth has spurred extensive research investigating its effects on other economies. The exact causes of the boom as well as the slowdown in Chinese exporting after 2007 are less well-understood. We quantify the drivers of Chinese export growth using a general equilibrium model estimated with detailed trade and production data that capture rich heterogeneity across destinations, firm ownership types, production locations, and sectors. We find that the three key drivers of Chinese export growth overall are rising foreign demand, improvements in access to imported intermediates, and factor productivity growth within China. Weakening foreign demand and a lack of further improvements in imported inputs access largely explain the slowdown in exporting after 2007. Furthermore, important differences especially across sectors and firms of different ownership types caution against any single narrative.

A trend-cycle BVAR decomposition investigates the role of different slow-moving trends – i.e., globalization, expectations, automation, labor demand and supply – in shaping the slow-moving dynamics of trend inflation. Despite well-anchored expectations, slow-moving imported “cost-push” factors induced disinflationary pressure keeping trend inflation below target. The cycle block provides evidence of inflation volatility increasingly driven by international factors. These results can explain why, from 2000 in the U.S. and before the recent surge, inflation remained both below target and silent to domestic slack.

We introduce heterogeneity between workers and entrepreneurs in a standard Fisherian model to study Sudden Stop dynamics and optimal policy. The distinction between workers and entrepreneurs introduces a redistributive motive that meaningfully interacts with Fisherian deflation. While in tranquil times redistribution is driven by the relative marginal utilities of consumption, the planner additionally favors entrepreneurs during Sudden Stops to mitigate Fisherian deflation. We show how heterogeneity adds to the understanding of how ex ante and ex post policies can be best designed to alleviate the negative effects of Sudden Stops.

We revisit the occurrence of self-fulfilling crises in sovereign debt markets under time-varying interest rates and growth in Eaton and Gersovitz (1981)’s model. We show that, when long-term interest rates exceed growth, insolvency is solely caused by the exhaustion of the sovereign’s debt repayment capacity subject to limited commitment. Indeed, high interest rates impose discipline on market sentiments, because creditors necessarily become more optimistic about solvency when the sovereign reduces debt exposure. Creditors’ beliefs respond instead ambiguously under low interest rates fluctuating around growth. As long as interest rates exceed growth, debt reduction alleviates the fiscal burden. However, the sovereign also benefits from the prospect of rolling over outstanding debt as long as interest rates remain below growth. Thus, creditors’ sentiments might adjust adversely to fiscal consolidation. When the default punishment is not disproportionately severe, this mechanism sustains belief-driven debt crises even when fundamentals would otherwise ensure solvency.

Using linked employer–employee data for Germany, we provide evidence for job polarisation between firms and identify offshoring as an important determinant of these employment changes. To accommodate these findings, we set up a model in which offshoring to a low-wage country can lead to job polarisation in the high-wage country due to a reallocation of labour across firms that differ in productivity and pay wages that are positively linked to their profits. Offshoring is chosen only by the most productive firms, and only for those tasks with the lowest variable offshoring costs. A reduction in those variable costs increases offshoring at the intensive and at the extensive margin. Well in line with our evidence, this causes domestic employment shifts from the newly offshoring firms in the middle of the productivity distribution to firms at the tails of this distribution, paying either very low or very high wages.

We document that plants belonging to small and mid-sized firms are geographically concentrated, while large firms are much more dispersed. These differences are sizable; firms with 2 plants have a dispersion that is 5 log points lower than predicted by industry location patterns, while the corresponding figure is less than 2 log points for firms with 40 plants and less than a half log point for firms with 100 or more plants. These patterns are qualitatively robust across industries, time periods, and alternative specifications. We also find that plants that are farther from the firm headquarters employ less workers than closer plants within the same firm, and that this relationship is attenuated in large firms. We interpret these findings through the lens of a model of plant location in which more productive firms endogenously choose to lower their cost of geographic expansion.