Friday, Jan. 6, 2023 8:00 AM - 10:00 AM (CST)
- Chair: Enrico Moretti, University of California Berkeley
The Political Economy of Transport Investments: Evidence from the California High-Speed Rail
AbstractA large literature estimates the impact of transportation infrastructure investments on economic outcomes. What forces determine the allocation of such investments? In democratic environments, these decisions are partly shaped by the preferences of voters and may also reflect preferences of policymakers. In this paper, we ask: how important are voters’ and policy-makers’ preferences in shaping the transport investments that are implemented? To what extent are these preferences a function of political values relative to economic gains? We study these questions in the context of California’s High-Speed Rail (HSR). We combine detailed voting data with a quantitative spatial framework to estimate the importance of political preferences and economic effects in shaping constituents’ preferences for the HSR. We then study the extent to which these preferences can shape transportation infrastructure projects, as designed by policy makers.
Adoption of Foreign Products, Information Externalities, and Domestic Firm Networks
AbstractWe document a new channel through which firms learn about the local demand for foreign products. We leverage data on imports by individuals in Costa Rica to analyze how engagement with e-commerce diffuses across peers. A new foreign product purchased by a close neighbor significantly increases an individual’s own demand of the same product. This increase in demand can also trigger a response from the firms that are most exposed to clients who conduct online purchases abroad, in the form of retailers importing and selling the same product after perceiving it has high local demand. The presence of information externalities suggests that the gains from trade may be larger than previously documented.
Goods Trade and Capital Investments in the Global Economy
AbstractWe develop a new theoretical framework for modelling this interaction between goods trade
and capital investments. Our framework rationalizes key features of the observed data. We allow
for a large number of asymmetric countries connected by a network of trade and capital investments. We provide microfoundations for gravity equations for trade and capital investments. We use our framework to examine the following questions: Are capital investments complements
or substitutes for goods trade? How much bigger are the gains from globalization when trade
integration is combined with international capital liberalization? How is the impact of China’s
economic growth on its East Asian neighbors altered when capital is free to move across borders
as well as goods? How much larger are the costs of Brexit for the United Kingdom when capital
is free to reallocate internationally? How does this reallocation of capital a ect the distributional consequences of trade disintegration? How much greater are the costs of international sanctions for targeting and targeted countries when restrictions on capital investments are combined with barriers to trade in goods? What are the global implications of a decoupling between China and the United States?
- R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location
- F0 - General