Yuriy Gorodnichenko | Clausen Center

Yuriy Gorodnichenko

Associate Professor

Department of Economics

Yuriy Gorodnichenko is associate professor in the Economics department at the University of California, Berkeley. He is a Faculty Research Fellow at the National Bureau of Economic Research (Cambridge, Massachusetts); and Research Fellow at the Institute of the Study of Labor (IZA). Professor Gorodnichenko is Associate Editor of the Journal of the European Economic Association, and Visiting Scholar at the San Francisco Federal Reserve Bank. His areas of research interest include monetary economics; aggregate implications of informal frictions; business cycles; development, productivity and income differences; and, inequality.

Summary of recent papers:

Price Setting in Online Markets: Basic facts, international comparisons, and cross-border integration

Date: March 2016

Coauthors: Oleksandr Talavera

Citation: Forthcoming, American Economic Review

We document basic facts about prices in online markets in the U.S. and Canada, a rapidly growing segment of the retail sector. Relative to prices in regular stores, prices in online markets are more flexible as well as exhibit stronger pass-through (60-75 percent) and faster convergence (half-life less than 2 months) in response to movements of the nominal exchange rate. Multiple margins of adjustment (frequency of price changes, direction of price changes, size of price changes, exit of sellers) are active in the process of responding to nominal exchange rate shocks. Furthermore, we use the richness of our dataset to show that degree of competition, stickiness of prices, synchronization of price changes, reputation of sellers, and returns to search effort are important determinants of pass-through and speed of price adjustment for international price differentials.

 

Cultural and Global Sourcing

Date: May 2015

Coauthors: Bohdan Kukharskyy, Gerard Roland

Citation: NBER Working Papers, No. 21198

This paper develops a model of global sourcing with culturally dissimilar countries. Production of final goods requires the coordination of decisions between the headquarter of a multinational firm and managers of their component suppliers. Managers of both units are assumed to have strong beliefs about the right course of action and are reluctant to adjust their decisions. We characterize the optimal allocation of decision rights across firms when contracts are incomplete. Our theoretical model delivers two key predictions: the incentive of a firm to integrate (rather than outsource) its input supply is decreasing in the cultural distance between the home and the host country and decreasing in trade costs between the two countries. Combining data from the U.S. Census Bureau's Related Party Trade with various measures for cultural distance and trade cost, we find empirical evidence strongly supportive of these two predictions.

Clausen-Supported Research