Research

Working Papers

Trade Wars and Rumors of Trade Wars: The Dynamic Effects of the U.S.-China Tariff Hikes 

(with Carter Mix) 

Updated draft coming soon!

Abtract: We develop a general equilibrium dynamic trade model to study the effects of the U.S.--China tariff hikes on the global economy.  Our model captures key trade patterns since the tariff hikes, such as the pace of the decline in U.S.-China bilateral trade and the reallocation of global imports from the U.S. toward China.  Our model suggests that the welfare losses from the tariff hikes are quite large for both the U.S. and China.  China's losses are much larger, as the tariff hikes induced sizable terms of trade movements that alleviate U.S. welfare losses but worsen the U.S. trade deficit.  Expectations about the persistence of the tariff hikes shape aggregate dynamics but have little effect on welfare.

The Dynamics of Global Sourcing (submitted)

International Finance Discussion Papers #1337

Finalist for the 2023 Distinguished CESifo Affiliate Award

Finalist for the WTO Essay Award for Young Economists 2020

27th FREIT-EIIT Best Graduate Student Paper

Econometric Society Winter School Best Paper in Applied Economics 2020

Abstract: This paper studies a model of heterogeneous importers that features static cross-country interdependence and dynamic dependence through sunk costs. Using data on Chinese chemicals producers, I find that source countries are complementary in the production. Furthermore, I estimate the sunk costs of importing using a partial identification approach under the revealed preferences assumption. The existence of cross-country interdependence and sunk costs implies that temporary trade shocks in one market can have long-lasting externalities on other markets through firm-level decisions. 

Export Market Expansion, Labor-Market Power, and Labor Shares: Evidence from a Small Open Economy (submitted)

(with Devashish Mitra and Hoang Pham) 

International Finance Discussion Papers #1394

Abstract: We examine the impact of an export market expansion created by the US-Vietnam Bilateral Trade Agreement (BTA) on labor market competition among Vietnamese manufacturing firms. We measure distortionary wedges between equilibrium marginal revenue products of labor (MRPL) and wages nonparametrically and find that the median firm pays workers 59% of their MRPL. The BTA permanently decreases labor market distortion in manufacturing by 3.4%, mainly for domestic private firms. The median distortion is 26% higher for women than men, and the decline in distortion for women drives the overall distortion reduction. We shed some light on the mechanisms for these results.

Anticipation Effect of the TPP on Vietnamese Manufacturing Firms

Abstract: Using a firm-level dataset between 2010 and 2017, I study whether Vietnamese firms adjusted their productivity in anticipation of the Trans-Pacific Partnership (TPP). I find that an expected reduction of 10 percentage points in export tariffs leads to a 4% increase in productivity in 2016, the year that the TPP was signed and highly anticipated. However, an expected reduction of 10 percentage points in import tariffs causes a 3% decrease in productivity. The results are consistent with the notion that improved access to export markets and future export revenues encourage productivity-enhancing activities, while increased foreign competition, which lowers future revenues, discourages firms from improving productivity. 

Policy Writings

As the U.S. Is Derisking from China, Other Foreign U.S. Suppliers Are Relying More on Chinese Imports (FEDS Note, August 2024)

(with Gordon Lewis) 

Global trade patterns in the wake of the 2018-2019 US-China tariff hikes (FEDS Note, April 2024)

(with Flora Haberkorn, Gordon Lewis,  Carter Mix, and Dylan Moore)