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Devils and Wolves International Economics Seminar Series

The seminar series in international economics is jointly organized by Rafael Dix-Carneiro (Duke, on leave for 2022-2023), Luca David Opromolla (NC State), Can Tian (UNC) and Daniel Yi Xu(Duke). The goal is to bring high-quality research in international economics to the Triangle area, in a serious and friendly environment.

February 14, 2023 | Duke Campus

February 16, 2023 | Duke Campus

March 31, 2023 | NC State Campus

April 7, 2023 | NC State Campus

This session is co-organized by the Peterson Institute for International Economics (PIIE).

Past Events

January 20, 2023 | Duke Campus

November 11, 2022 | NC State Campus

October 21, 2022 | NC State Campus

October 20, 2022 | NC State Campus

April 28, 2022 | Duke Campus

  • Pol Antras, Harvard University |  “Global Sourcing and Multinational Activity: A Unified Approach”
  • Felix Tintelnot, University of Chicago | “Demand Shocks to a Production Network: Firm Responses an Worker Impacts”

Abstract: We analyze how changes in firm output–induced by exogenous changes in foreign demand–affect wages, employment, and the sourcing of inputs from the domestic production network. We find that, on average, the response of input purchases is larger and more instantaneous than that of labor costs. The elasticity of input purchases differs according to the providing sector, which allows us to characterize what fraction of goods or services that a sector provides is used for fixed inputs and what fraction is used for variable inputs. We also find that firm-level wages of both direct and indirect exporters respond to firm-specific demand shocks. We then examine how accounting for the presence and degree of fixed costs and imperfect competition in the labor market affect the propagation of demand or supply shocks. Our counterfactual analysis shows that adjusting the input-output matrix to account for fixed inputs leads to substantially larger welfare losses from tariffs or negative foreign demand shocks.

April 14, 2022 | NC State Campus

  • Lorenzo Caliendo, Yale University | “On the Mechanics of Spatial Growth”
  • Fernando Parro, Penn State University | “The Quantitative Effects of Trade Policy on Industrial and Labor Location”

Abstract: We evaluate the quantitative effects of trade policy on the location of firms across space and over time. We develop a multi-country, multi-sector dynamic general-equilibrium trade and spatial model with forward-looking decisions of workers on where to supply labor, forward-looking decisions of firms on where to locate production, endogenous capital structure accumulation, and trade in intermediate goods with sectoral linkages. We bring the model to data using trade, production, and data on firm demographics across sector and locations. We use the model to study if trade protectionism can revert the declining trend in the U.S. manufacturing employment and firms; and its impact on the location of production across space and over time. We feed into the model the raise in import tariffs between the U.S. and its major trade partners in the year 2018. We find that these changes in trade policy can result in a persistent increase on manufacturing employment and firms. However, these effects do not revert the long run decline in manufacturing employment and firms. Importantly, the relocation of production comes at the cost of higher prices, lower welfare for households, and heterogeneous effects on firm entry across space. 

  • Alessandro Sforza, University of Bologna | “Shocks and the organization of the firm: who pays the bill?”

Abstract: What happens to firms’ organizational structure when they are hit by a negative shock? By matching employer-employee data with firm loans and bank balance sheets, I study firms’ reactions to a credit shock–the global financial crisis—and compare it to a trade shock—the entry of China in the WTO. When hit by a credit supply shock, firms reduce employment of higher-skilled workers more than lower-skilled production workers, while no adjustment is found on the wages. In contrast, a trade shock affects the hierarchy of the firm from the bottom to the top: firms rescale the organization and reduce employment at all levels. Results support the existence of heterogenous complementarities between working capital and skills along the hierarchy of the firm. Abstracting from general equilibrium effects, I find that firms’ organization is a key channel in the transmission of credit shocks to the real economy.