Browsing by Subject "Foreign trade"
Now showing 1 - 2 of 2
Results Per Page
Sort Options
Item Essays on international trade(2010-05) French, Scott Thomas; Corbae, Dean; Abrevaya, Jason; Freitas, Kripa; Ramondo, Natalia; Ruhl, KimThis dissertation consists of three essays pertaining to the causes of the levels and composition of the international trade flows of nations, and the consequential implications for the levels of per capita income and welfare of their populations. The first of these documents a pattern of comparative advantage in product level, bilateral trade data that conventional quantitative trade models have difficulty explaining. It goes on to develop a theory of product level productivity differences based on endogenous differences in the allocation of research and development into product and process innovation across countries over time, and it shows that, when fitted to cross-country manufacturing wage data, the predicted product level technology distribution is consistent with the observed trade pattern. The second essay shows that the distribution of technology levels inferred in the first essay can help explain the inability of both ad-hoc and theoretically based gravity models of trade to account for the observed positive correlation between the percentage of manufacturing output that is traded and countries' per capita income. It derives a modified gravity equation based on a Ricardian model of trade with deterministic product level technology differences across countries. It then uses estimates from a product level gravity estimation to compute the component of this equation that differs from a conventional gravity equation in order to determine the extent to which the observed concentration of comparative advantage in a common set of products for low-income countries explains the small percentage of their output that is exported. The final essay shows that a simple model of firm profit maximization in the presence of sunk costs of entering the export market is broadly consistent with the observed persistence of exporting behavior in firm level data. It uses this simple model and moments from data on US manufacturing firms to estimate the value of the sunk export entry costs faced by these firms using an indirect inference strategy. These costs are shown to be substantial relative the revenue stream of a typical firm.Item Essays on international trade and intergenerational human capital transmission(2010-05) Cengiz, Gulfer; Freitas, Kripa M.; Corbae, Dean; Kuruscu, Burhanettin; Ramondo, Natalia; Alti, AydoganFirst chapter aims to quantify the role of trade in capital goods in cross country income differences. I construct a multi-country general equilibrium model of trade along the line of Eaton and Kortum (2002) and Alvarez and Lucas (2007) and introduce trade in capital goods and capital accumulation. In this framework, comparative advantage and the costs of international trade determine the pattern of production, specialization, and trade. I calibrate the model for 53 countries by estimating trade barriers and calibrating productivity parameters to match the bilateral trade data in 1996. The model is used to analyze full trade liberalizations. I find that removing barriers on investment goods accounts a large portion of reducing cross-country income differences and welfare gain. Counterfactual exercises suggest that developing countries gain relatively more than developed countries. In the second chapter, I focus on the impact of free trade on exportimport ratios in two different sectors. I employ a multi-country general equilibrium model of bilateral trade patterns along the line of Eaton and Kortum (2002) and Alvarez and Lucas (2007). I calibrate the model for 20 countries by estimating trade barriers and calibrating productivity parameters to match the bilateral trade data in 1996. The model is used to analyze full trade liberalizations. The impacts of free trade are predicted to be an increase in the export-import ratios in the comparative advantage sector and a decline in the comparative disadvantage sector, on average. In developing countries the average percentage change in export-import ratios exceeds the average percentage change in export-import ratios in developed countries. Finally, in the third chapter, I focus on the intergenerational human capital transmission. I develop and calibrate a theoretical model that considers three mechanisms of intergenerational transmission of human capital: (i) persistence in learning ability; (ii) parental investment in child’s human capital; (iii) higher teaching productivity of parents with more human capital. Within this framework, I find that (i) and (ii) plays important roles while (iii) does not. In addition the model generates the documented fact that higherwage parents spending more time teaching their children in spite of the higher opportunity cost. I asses the role of nature and nurture effects in intergenerational persistence of earnings and I find that nature accounts a large portion of the intergenerational persistence in earnings. I also quantify the relative importance of these mechanisms on wage inequality.