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International Friends and Enemies

By Benny Kleinman, Ernest Liu, and Stephen J. Redding

American Economic Journal: Macroeconomics, October 2024

We examine whether, as countries become more economically dependent on a trade partner, they realign politically toward that trade partner. We use network measures of economic exposure to foreign productivity growth derived from the class of trade models ...

Entrepôt: Hubs, Scale, and Trade Costs

By Sharat Ganapati, Woan Foong Wong, and Oren Ziv

American Economic Journal: Macroeconomics, October 2024

We study the global trade network and quantify its trade and welfare impact. We document that the trade network is a hub-and-spoke system where 80 percent of trade is shipped indirectly and largely via entrepôts—major hubs that facilitate trade between...

Is There a Stable Relationship between Unemployment and Future Inflation?

By Terry Fitzgerald, Callum Jones, Mariano Kulish, and Juan Pablo Nicolini

American Economic Journal: Macroeconomics, October 2024

Evaluating the stability of the Phillips curve using aggregate data is challenging due to the bias that endogenous monetary policy imparts on estimated Phillips curve coefficients. We argue that regional data can be used to identify the structural relatio...

New Facts on Consumer Price Rigidity in the Euro Area

By Erwan Gautier, Cristina Conflitti, Riemer P. Faber, Brian Fabo, Ludmila Fadejeva, Valentin Jouvanceau, Jan-Oliver Menz, Teresa Messner, Pavlos Petroulas, Pau Roldan-Blanco, Fabio Rumler, Sergio Santoro, Elisabeth Wieland, and Hélène Zimmer

American Economic Journal: Macroeconomics, October 2024

Using CPI micro data for 11 euro area countries over 2010–2019, we document new findings on consumer price rigidity in the euro area: (i) the average frequency of price changes is 12 percent; (ii) the distribution of price changes is highly dispersed, w...