Results

Journal article

Journal of International Economics:

Endogenous mobility in pandemics: theory and evidence from the United States

We analyze infectious diseases in a general equilibrium model with endogenous mobility, where forward-looking agents weigh disease risks against economic opportunities in cross-regional mobility decisions. This generates...Read more...

CEP discussion paper

Sticky gravity

International trade flows show strong persistence over time. Standard static gravity models cannot rationalize this persistence and lack a micro-foundation for including lagged trade flows as a determinant of current tra...Read more...

Journal article

Journal of International Economics:

Technical change, jobs, and wages in the global economy

This paper presents a compact and intuitive framework that consolidates, simplifies, and extends results on the links between technology, trade, and labour market outcomes. It makes three main contributions. First, it pr...Read more...

CEP discussion paper

Roads to development? Urbanization without growth in Zambia

This study explores the impacts of road improvements in a country characterized by "urbanization without growth". Our analysis reveals that, although road upgrades increase population growth, they do not significantly ad...Read more...

CEP discussion paper

New venture creation: innovativeness, speed-to-breakeven and revenue tradeoffs

We present a Schumpeterian growth model with new venture creation, under uncertainty, which explains the tradeoff between speed-to-breakeven, revenue-at-breakeven and relates this to the level of innovation. We then expl...Read more...

CEP discussion paper

Empirical welfare analysis with hedonic budget constraints

We analyze demand settings where heterogeneous consumers maximize utility for product attributes subject to a nonlinear budget constraint. We develop nonparametric methods for welfare-analysis of interventions that chang...Read more...

Journal article

Journal of Economic Geography:

On the productivity advantage of cities

Agglomeration externalities are the key factor explaining the existence of cities and their size. However, while the various micro foundations of agglomeration externalities stress the importance of total factor producti...Read more...

Journal article

PNAS:

Coordination dynamics between fuel cell and battery technologies in the transition to clean cars

Significant progress reconciling economic activities with a stable climate requires radical and rapid technological change in multiple sectors. Here, we study the case of the automotive industry?s transition to electric ...Read more...

CEP discussion paper

Endogenous mobility in pandemics: theory and evidence from the United States

We study infectious diseases in a spatial epidemiology model with forward-looking individuals who weigh disease environments against economic opportunities when moving across regions. This endogenous mobility allows regi...Read more...

Journal article

The Economic Journal:

Unraveling firms: demand, productivity and markups heterogeneity

We develop a novel framework that simultaneously allows recovering heterogeneity in demand, quantity TFP and markups across firms while leaving the correlation between the three dimensions unrestricted. We accomplish thi...Read more...

CEP discussion paper

Sparse production networks

Firm-to-firm connections in domestic and international production networks play a fundamental role in economic outcomes. Firm heterogeneity and the sparse nature of firm-to-firm connections implicitly discipline network ...Read more...

Journal article

Political Behaviour:

Does the number of candidates increase turnout? Causal evidence from two-round elections

A long-lasting question in comparative politics is whether the number of candidates/parties increases turnout. Existing observational studies on the topic find mixed results. We thus apply a regression discontinuity desi...Read more...

CEP discussion paper

Endogenous cross-region human mobility and pandemics

We study infectious diseases using a Susceptible-Infected-Recovered-Deceased model with endogenous cross-region human mobility. Individuals weigh the risk of infection against economic opportunities when moving across re...Read more...

CEP discussion paper

Foreign ownership and robot adoption

This paper shows that multinational enterprises (MNEs) spur the adoption of industrial robots. First, I document a positive and robust correlation between multinational production and robot adoption using a new cross-cou...Read more...

Journal article

Energy for Sustainable Development :

Assessing reliability of electricity grid services from space: the case of Uttar Pradesh, India

While most households around the world have access to electricity, the number of hours per day when the grid supplies them with adequate voltage can be low. Improving the reliability of electricity is crucial to make pro...Read more...

Blog

VoxEU:

Quantifying the full impact of country-specific policies on trade flows

Rebecca Freeman, Mario Larch, Angelos Theodorakopoulos and Yoto Yotov propose a solution to issues measuring country-specific impact using structural gravity models - a popular way to analyse the impact of trade policie...Read more...

Journal article

Economica:

Suburbanization in the USA, 1970-2010

The second half of the 20th century saw large-scale suburbanization in the USA, with the median share of residents who work in the county where they live falling from 87% to 71% between 1970 and 2000. We introduce a new ...Read more...

Journal article

Journal of Common Market Studies:

The effect on foreign direct investment of membership in the European Union

This article explores the impact of EU membership on foreign direct investment (FDI). It analyses empirically how the effects of such deep integration differ from other forms and investigates what drives these effects. U...Read more...

Journal article

Journal of Economic Geography:

Local economic conditions and the nature of new housing supply

We explore the effects of local economic conditions on the type and size of newly constructed housing units in a city. Exploiting the 1984?2004 metro area samples of the American Housing Survey and US Census building per...Read more...

CEP discussion paper

The UK's great demand and supply recession

We revisit UK?s poor productivity performance since the Great Recession by means of both a suitable theoretical framework and firm-level prices and quantities data for detailed products allowing us to both measure demand...Read more...

CEP discussion paper

Quality of life in a dynamic spatial model

We develop a dynamic spatial model in which heterogeneous workers are imperfectly mobile and forward-looking and yet all structural fundamentals can be inverted without assuming that the economy is in a stationary spatia...Read more...

CentrePiece article

Globalisation and pandemics: surprising interactions

Pandemics are only possible because of international travel. But perhaps surprisingly, in the absence of social distancing, a more globalised country will not necessarily suffer a worse outbreak. Pol Antras, Stephen Redd...Read more...

CEP discussion paper

Prime locations

We harness big data to detect prime locations - large clusters of knowledge-based tradable services - in 125 global cities and track changes in the within-city geography of prime service jobs over a century. Historically...Read more...

Journal article

Labour Economics:

Job polarization and the declining quality of knowledge workers: evidence from the UK and Germany

Across the developed world, employment has polarized clearly by occupation, but changes to the wage structure have been harder to interpret. We examine changes to the wage structure in the UK and Germany, two countries w...Read more...

CEP discussion paper

Globalization and pandemics

We develop a model of human interaction to analyze the relationship between globalization and pandemics. Our framework provides joint microfoundations for the gravity equation for international trade and the Susceptible-...Read more...

Journal article

Journal of Urban Economics:

Land tenure and land-use in a developing city: a quantitative spatial model applied to Kampala, Uganda

Land rights and tenure systems are an important factor behind poor housing and inefficient land-use in developing country cities. In Kampala, Uganda, four systems of land tenure coexist, allowing a detailed study of the ...Read more...

CEP discussion paper

On the productivity advantage of cities

Ever since Marshall (1890) agglomeration externalities have been viewed as the key factor explaining the existence of cities and their size. However, while the various micro foundations of agglomeration externalities str...Read more...

CEP discussion paper

Rising protectionism and global value chains: quantifying the general equilibrium effects

Quantifying the effects of trade policy in the age of ?global value chains? (GVCs) requires an enhanced analytical framework that takes the observed international input-output relations in due account. However, existing ...Read more...

Journal article

The Quarterly Journal of Economics:

The price ain't right? hospital prices and health spending on the privately insured

We use insurance claims data covering 28% of individuals with employersponsored health insurance in the United States to study the variation in health spending on the privately insured, examine the structure of insurer-h...Read more...

CEP discussion paper

Economic integration, foreign investment and international trade: the effects of membership of the European Union

This paper investigates the importance of economic integration in simultaneously fostering foreign direct investment (FDI) and international trade. These have rarely been analyzed jointly using contemporary econometric m...Read more...

Journal article

The Quarterly Journal of Economics:

Reference-dependent job search: evidence from Hungary

We propose a model of job search with reference-dependent preferences, with loss aversion relative to recent income (the reference point). In this model, newly unemployed individuals search hard since consumption is belo...Read more...

CEP discussion paper

Goods and factor market integration: a quantitative assessment of the EU enlargement

The economic effects from labor market integration are crucially affected by the extent to which countries are open to trade. In this paper we build a multi-country dynamic general equilibrium model with trade in goods a...Read more...

Journal article

American Economic Review:

A structural model of the retail market for illicit drugs

We estimate a model of illicit drugs markets using data on purchases of crack cocaine. Buyers are searching for high-quality drugs, but they determine drugs' quality (i.e., their purity) only after consuming them. Hence,...Read more...

Journal article

IZA Journal of Labor and Development:

Pathways from school to work in the developing world

This paper uses novel micro data from the ILO-STWT surveys to provide evidence on the duration, endpoint, and determinants of the transition from school to work in a sample of 23 low- and middle-income countries around t...Read more...

Journal article

Review of International Economics:

The geometry of the distance coefficient in gravity equations in international trade

Gravity equations in trade imply that trade flows are proportional to the size of a country and inversely proportional to distance. This paper develops the analogy of gravity in physics with gravity in trade and provides...Read more...

Journal article

The Review of Economic Studies:

Estimating strategic models of international treaty formation

This article develops an empirical framework for analysing the timing of international treaties. A treaty is modelled as a dynamic game among governments that decide on participation in every period. The net benefit of t...Read more...

Journal article

Journal of International Economics:

Goods trade, factor mobility and welfare

We develop a quantitative spatial model that incorporates a rich geography of trade costs and labor mobility with heterogeneous worker preferences across locations. We provide comparative statics for the unique equilibri...Read more...

Journal article

Journal for Labour Market Research:

The future of the German industrial relations model [Die Zukunft des deutschen Modells der Arbeitsbeziehungen]

The paper examines recent evidence on the erosion of the German industrial relations model. Although its coverage has declined, much of this has occurred in smaller and newer establishments, and compared with Britain, it...Read more...

CEP discussion paper

The optimal timing of UI benefits: theory and evidence from Sweden

This paper provides a simple, yet general framework to analyze the optimal time profile of benefits during the unemployment spell. We derive simple sufficient-statistics formulae capturing the insurance value and incenti...Read more...

Journal article

The World Bank Economic Review:

The political economy of trade policy: gone for good? Subsidies with export share requirements in China: 2002-13

This paper presents a simple model of subsidies with export share requirements (ESR) in a heterogeneous firm environment. A two-country general equilibrium version of the model with a single 100% ESR is calibrated using ...Read more...

Journal article

Feature Issue:

What predicts a successful life? A life-course model of well-being

Policy makers who care about well-being need a recursive model of how adult life-satisfaction is predicted by childhood influences, acting both directly and (indirectly) through adult circumstances. We estimate such a mo...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Local Economic Conditions and the Nature of New Housing Supply

We present a modified open monocentric city model that assumes that land is available for conversion into new housing throughout the city. The model predicts that positive local income shocks (i) increase the city?s shar...Read more...

Journal article

American Economic Review:

Market size, competition, and the product mix of exporters

We build a theoretical model of multi-product firms that highlights how competition across market destinations affects both a firm's exported product range and product mix. We show how tougher competition in an export ma...Read more...

CentrePiece article

Has job polarisation squeezed the American middle class?

Job polarisation has had strong effects on US workers? relative wages, according to research by Michael Boehm. His study examines whether the decline in manufacturing and clerical jobs has been responsible for the laggin...Read more...

CEP discussion paper

What predicts a successful life? A life-course model of well-being

If policy-makers care about well-being, they need a recursive model of how adult life-satisfaction is predicted by childhood influences, acting both directly and (indirectly) through adult circumstances. We estimate such...Read more...

CEP discussion paper

Has job polarization squeezed the middle class? Evidence from the allocation of talents

Over the last two decades, earnings in the United States increased at the top and at the bottom of the wage distribution but not in the middle - the intensely debated middle class squeeze. At the same time there was a su...Read more...

CEP discussion paper

Policy Design in a Model with Swings in Risk Appetite

This paper studies the policy implications of habits and cyclical changes in agents' appetite for risk-taking. To do so, it analyses the non-linear solution of a New Keynesian (NK) model, in which slow-moving habits help...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Do Homeowners Benefit Urban Neighborhoods? Evidence from Housing Prices

Homeownership is heavily subsidized in many countries mainly through the tax code. The adverse effects of lenient tax treatment of owner-occupied housing on economic efficiency and growth are large and well documented in...Read more...

CEP discussion paper

The Allocation of Talent over the Business Cycle and its Effect on Sectoral Productivity

It is well documented that graduates enter different occupations in recessions than in booms. In this article, we examine the impact of this reallocation for long-term productivity and output across sectors. We develop a...Read more...

CEP discussion paper

Goods Trade, Factor Mobility and Welfare

This paper extends a recent class of quantitative models of international trade to incorporate factor mobility within countries. We present a model-based decomposition of the variance of economic activity into the contri...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Investigating Agglomeration Economies in a Panel of European Cities and Regions

This paper investigates agglomeration economies in an annual panel of NUTS 2 and NUTS 3 city regions across France, Germany, Ireland, Italy, Spain and the UK over 1980-2006 and comparing three sub-samples to see if the e...Read more...

CEP discussion paper

Long Term Implications of the ICT Revolution: Applying the Lessons of Growth Theory and Growth Accounting

How big a boost to long run growth can countries expect from the ICT revolution? I use the results of growth accounting and the insights from a two-sector growth model to answer this question. The use of a two-sector rat...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Modelling and Forecasting UK Mortgage Arrears and Possessions

This paper presents new models for aggregate UK data on mortgage possessions (foreclosures) and mortgage arrears (payment delinquencies). The innovations include the treatment of difficult to observe variations in loan q...Read more...

CEP discussion paper

Crisis? What Crisis? Currency vs. Banking in the Financial Crisis of 1931

This paper examines the role of currency and banking in the German financial crisis of 1931 for both Germany and the U.S. We specify a structural dynamic factor model to identify financial and monetary factors separately...Read more...

CEP discussion paper

Depression Econometrics: A FAVAR Model of Monetary Policy During the Great Depression

The prominent role of monetary policy in the U.S. interwar depression has been conventional wisdom since Friedman and Schwartz (1963). This paper presents evidence on both the surprise and the systematic components of mo...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Productivity and Firm Selection: Quantifying the 'New' Gains from Trade

We discuss how standard computable equilibrium models of trade policy can be enriched with selection effects without missing other important channels of adjustment. This is achieved by estimating and simulating a partial...Read more...

CEP discussion paper

Interim Rank, Risk Taking and Performance in Dynamic Tournaments

Little is known about the effects of revealing information on relative performance during a dynamic tournament. We empirically study the impact of interim rank on risk taking and performance using data on professionals c...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Common and Spatial Drivers in Regional Business Cycles

We examine real business cycle convergence for 41 euro area regions and 48 US states. Results obtained by a panel model with spatial correlation indicate that the relevance of common business cycle factors is rather stab...Read more...

CEP discussion paper

Accounting for Research and Productivity Growth Across Industries

What factors underlie industry differences in research intensity and productivity growth? We develop a multi-sector endogenous growth model allowing for industry specific parameters in the production functions for output...Read more...

CEP discussion paper

Relative Factor Endowments and International Portfolio Choice

This paper presents a model of international portfolio choice based on cross-country differences in relative factor abundance. Countries have varying degrees of similarity in their factor endowment ratios, and are subjec...Read more...

CEP discussion paper

Tax Cuts in Open Economies

A reduction in income tax rates generates substantial dynamic responses within the framework of the standard neoclassical growth model. The short-run revenue loss after an income tax cut is partly - or, depending on para...Read more...

CEP discussion paper

The Shimer Puzzle and the Correct Identification of Productivity Shocks

Shimer (2005a) claims that the Mortensen-Pissarides search model of unemployment lacks an ampiflication mechanism because it cannot generate the observed business cycle fluctuations in unemployment given labor productivi...Read more...

CEP discussion paper

Productivity, Aggregate Demand and Unemployment Fluctuations

This paper presents new empirical evidence on the cyclical behavior of US unemployment that poses a challenge to standard search and matching models. The correlation between cyclical unemployment and the cyclical compone...Read more...

CEP discussion paper

Measuring Organization Capital in Japan: An Empirical Assessment Using Firm-Level Data

Globalization and the ICT revolution of the 1990s have forced many firms to reorganize in order to survive in a more competitive market. There are several approaches that can be used to assess the measurement of organiza...Read more...

CEP discussion paper

An R&D-Based Model of Multi-Sector Growth

We develop a multi-sector general equilibrium model in which productivity growth is driven by the production of sector-specific knowledge. In the model, we find that long run differences in total factor productivity grow...Read more...

CEP discussion paper

Trade and Growth with Heterogeneous Firms

This paper explores the impact of trade on growth when firms are heterogeneous. We find that greater openness produces anti-and pro-growth effects. The Melitz-model selection effects raises the expected cost of introduci...Read more...

CEP discussion paper

Factor Price Equality and the Economies of the United States

We develop a methodology for identifying departures from relative factor price equality across regions that is valid under general assumptions about production, markets and factors. Application of this methodology to the...Read more...

CEP discussion paper

Labor and the Market Value of the Firm

What role does labor play in a firm?s market value? We explore this question using a production-based asset pricing model with frictions in the adjustment of both capital and labor. We posit that hiring of labor is akin ...Read more...

CEP discussion paper

Profit Share and Returns on Capital Stock in Italy: the Role of Privatisations behind the Rise of the 1990s

Profit share in Italy has been growing between the mid-1970s and the mid-1990s, remaining stable at historically high levels since than. After dropping in the first half of the 1070s, owing to an unprecedented rapid rise...Read more...

CEP discussion paper

Balanced Growth With Structural Change

We study a multi-sector model of growth with differences in TFP growth rates across sectors and derive sufficient conditions for the coexistence of a balanced aggregate growth path, with all aggregates growing at the sam...Read more...

CEP discussion paper

Relative Wage Variation and Industry Location

Relative wages vary considerably across regions of the United Kingdom, with skill-abundant regions exhibiting lower skill premia than skill-scarce regions. This paper shows that the location of economic activity is corre...Read more...

CEP discussion paper

Factor Price Equalization in the UK?

This paper develops a general test of factor price equalization that is robust to unobserved regional productivity differences, unobserved region- industry factor quality differences and variation in production technolog...Read more...

CEP discussion paper

Educational Attainment, Labour Market Institutions, and the Structure of Production

A key feature of OECD economic growth since the early 1970s has been the secular decline in manufacturing's share of GDP and the secular rise of service sectors. This paper examines the role played by relative prices, t...Read more...

CEP discussion paper

The Structure of Wages in What Should be a Competitive Labour Market

This paper examines the structure of wages in a very specific labour market, for care assistants in residential homes for the elderly on England's 'sunshine coast'. This sector corresponds closely to economists' notion...Read more...

CEP discussion paper

Measuring the Cost Effectiveness of an R&D Tax Credit for the UK

This paper investigates the economic impact of the government's proposed new UK R&D tax credit. We measure the benefit of the credit by the effect on value added in the short and long?run. This is simulated from existin...Read more...

CEP discussion paper

Factor Endowments and Production in European Regions

This paper analyses patterns of production across 14 industries in 45 regions from 7 European countries since 1975. We estimate a structural equation derived directly from Heckscher-Ohlin theory that relates an industry'...Read more...

CEP discussion paper

Minimum Wages and Employment

This paper investigates the effect of minimum wages on employment using a panel of US state-based data. We estimate a minimalist dynamic version of the specification implied by neo-classical theory. We find statistically...Read more...

CEP discussion paper

Fixed-Term Contracts and the Duration Distribution of Unemployment

In the mid-1980s, many European countries introduced fixed-term contracts. Since then their labor markets have become more dynamic. This paper studies the implications of such reforms for the duration distribution of une...Read more...

CEP discussion paper

Externalities in the Matching of Workers and Firms in Britain

We provide empirical evidence on the nature of spatial externalities in a matching model for the UK. We use a monthly panel of outflows, unemployment and vacancy stocks data from the registers at Jobcentres in the UK; th...Read more...

CEP discussion paper

Factor Residuals in SUR Regressions: Estimating Panels Allowing for Cross Sectional Correlation

This paper describes a method for estimating panels by imposing a factor structure on the residuals. The method allows SUR estimation of panel models by providing a full-rank estimator of the system covariance matrix whe...Read more...

CEP discussion paper

Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries

Many writers have claimed that R&D has two 'faces'. In addition to the conventional role of stimulating innovation, R&D enhances technology transfer by improving the ability of firms to learn about advances in the lead...Read more...

CEP discussion paper

The Determinants Of Cross-Border Equity Flows

We apply a new approach to a new panel data set on bilateral gross cross-border equity flows between 14 countries, 1989-96. The remarkably good results have strong implications for theories of asset trade. We find that t...Read more...

CEP discussion paper

Workers' Transitions from Temporary to Permanent Employment: the Spanish Case

This paper studies the duration pattern of fixed-term contracts and the determinants of the transformation of these into permanent ones. To address this issue we estimate a duration model for temporary employment, with c...Read more...

CEP discussion paper

The Dynamics of International Specialisation

The theoretical literature on trade and growth suggests that comparative advantage is endogenous and evolves over time. However, most empirical analysis of international trade flows is essentially static in nature. This ...Read more...