Call for Papers: Conference on Macroeconomic Implications of Trade Policies and Trade Shocks

Call for Papers: Conference on Macroeconomic Implications of Trade Policies and Trade Shocks

Sponsored by the Clausen Center for International Business and Policy at Berkeley and the Peterson Institute for International Economics University of California, Berkeley, February 13-14, 2020

Call for Papers

The last two decades of rapidly shifting comparative advantage have been associated with economic and social dislocations and trade policy tensions. Those factors played a central role in the election of Donald Trump to the U.S. presidency, who followed through on threats of aggressive trade actions against America’s trade partners. Because both major U.S. political parties now embrace trade skepticism, more belligerent international trade policies and the accompanying trade disputes are likely to remain a feature of the global scene even under future presidents.

Much of the trade-skeptic agenda comes from a desire to shift macroeconomic outcomes – whether labor-market outcomes, trade deficits, or overall economic growth. It is therefore critical for policymakers to have a firm grasp on the macro implications of trade policies. The academic literature on that subject has lagged behind modern modeling advances in other areas of economics, perhaps because those advances occurred in a period when a rules-based international trading system largely kept trade hostilities in check. Policymakers intervening to offset supposed effects of trade would also benefit from a better understanding of how the forces of globalization (as opposed to other economic trends) have shaped economic outcomes.

This conference aims to update the analytical framework for analyzing trade policies and trade shocks to encompass modern developments in macro modeling and in trade theory. The goal is to encourage people to write papers that are compatible with the basic requirements in both the trade and macro literatures and allow economists to provide quantitative answers to questions about the short- and long-run impacts of trade policies and shocks on the trade balance, employment, real wages, income distribution, growth, and welfare.

To that end, we welcome submissions across a range of topics that include but are not restricted to theoretical and empirical studies on:

  • The effects of trade shocks on
    • labor-market dynamics
    • income distribution
    • external imbalances and growth
    • exchange rates
    • direct investment flows and production location
  • The rising importance and implications of global value chains.
  • The appropriate macro policies to deal with trade shocks.
  • The links between trade deficits and labor market outcomes.
  • The role of bilateral imbalances and the economic costs of trade diversion in response to tariffs.
  • The dynamics of trade warfare.
  • The possible emergence of regional trading blocs.
  • Macro impacts of quotas and other quantitative trade restrictions.
  • Impact and longer-run effects of Brexit.
  • Trade and investment effects of potential tax reforms.
  • The linkages between global trade volume and global growth.
  • The effects of trade policy uncertainty

Papers that integrate some aspect of trade in a macro framework will have priority. Proposals should be no more than 300 words in length and should give a clear account of the question(s) to be addressed and the analytical and/or empirical methodology, although they may be accompanied by draft papers.

Please send all proposals to:

The deadline for receipt of proposals is September 12, 2019. 

Download a PDF of this call for papers.

Public procurement in developing countries

Public procurement in developing countries

by Andres Gonzalez-Lira

Creating effective institutions that regulate the way public authorities purchase goods, works, and services is critical to promote a level playing field for all businesses and ensuring efficient resource allocation. This research project aims to study the role of different institutional features in improving economic efficiency.

Multiproduct firms and markup

Multiproduct firms and markup

by Chaewon Baek & Todd Messer

Many studies in international trade and macroeconomics typically assume that all firms produce only a single product. However, as emphasized by Hottman et al. (2016), multi-product firms actually account for a significant portion of sales and tend to be large. This project aims to investigate the implications of relaxing the assumption of single-product firms. In particular, we examine the importance of product scope in explaining how markups are determined and distributed across firms. First, theoretically, we argue that the definition of a firm-level markup is no longer obvious when one relaxes the assumption of single-product firms. Markups can then vary due to how product scope affects pricing decisions by product. Second, we test the theory in the data by matching bar code level sales to firm production data in order to estimate how markups are related to product scope. Our results have important implications in explaining declining competition since the 1980s and patterns of international trade.

Informality, Commuting & Urban transport improvements: evidence from Mexico City

Informality, Commuting & Urban transport improvements: evidence from Mexico City

by Roman Zarate

This paper assesses the impact of urban transit improvements on labor allocation between informal and formal firms in Mexico City. I exploit the construction of new subway lines and a Bus Rapid Transit (BRT) system to study the relationship between commuting costs and informality rates. An important characteristic of labor markets in developing countries is the presence of informal, household-run businesses that employ more than 60% of the total workforce, and are substantially less productive than formal firms. This study explores a new mechanism that can explain the prevalence of informal workers: the high commuting costs within cities. In the second part, I develop a quantitative urban model to measure the welfare effects of these improvements accounting for this reallocation across sectors and estimate optimal policies to attract more workers to formal firms.

Labor Effects of Multinational Firms Entry

Labor Effects of Multinational Firms Entry

by Isabela Manelici & Jose P. Vasquez

This project studies the impact of the entry of multinational corporations (MNCs) on worker outcomes using administrative data from Costa Rica. Policy makers from developed and developing countries alike and at all levels of government compete for the attraction of superstar firms (typically MNCs) through large economic incentives. In return, they expect an improvement in the labor market conditions of their jurisdiction. Despite the pervasiveness of such incentives, there is relatively little worker-level evidence on the impact of MNCs on the labor market and, in particular, on the distribution of labor earnings.  Our project would contribute to the literature by providing evidence on who are the winners, the losers, and how the impacts of MNC entry are distributed across different worker groups (by education, occupation, initial position in the income distribution etc.).

Unlocking access to credit through technological innovation

Unlocking access to credit through technological innovation

by Paul Gertler, Brett Green, Catherine Wolfram

The proliferation of mobile technologies and digital payments systems have the potential to radically change the credit market landscape in developing economies. In this project we will explore how a combination of these recent advances have facilitated an innovative fi nancial contract that utilizes a new form of collateral, which is designed to enhance technology adoption and access to collateralized borrowing the developing world. We will then explore the extent to which this collateral can be \re-used” to provide poor households with a ordable and recurrent access to credit markets.