Academic Research

2023 Jan 23

Research Seminar: Author Location & Attention on Open Science Platforms / Evidence from COVID-19 Preprints

10:15am to 11:30am

Location: 

Belfer L1 Weil Town Hall, HKS / Zoom (registration information below)

The Growth Lab Research Seminar series is a weekly seminar that brings together researchers from across the academic spectrum who share an interest in growth and development.

Speaker: Megan MacGarvie,  Associate Professor, Boston University/Research Associate at the National Bureau of Economic Research

Abstract: Online platforms such as preprint servers have become an important way to disseminate new scientific knowledge prior to peer review. However, little is known about how attention to preprints may vary...

Read more about Research Seminar: Author Location & Attention on Open Science Platforms / Evidence from COVID-19 Preprints

Gambling on Development: The Role of Local Elites in a Growth-Based Future

Stefan Dercon is Professor of Economic Policy at the Blavatnik School of Government and the Economics Department, and a Fellow of Jesus College. He is also Director of the Centre for the Study of African Economies. Prof. Dercon's latest book, "Gambling on Development: Why Some Countries Win and Others Lose" draws on his academic research as well as his policy experience across three decades and 40-odd countries, exploring why some countries have managed to settle on elite bargains favoring growth and development, and others did not.

This podcast was moderated by Clement...

Read more about Gambling on Development: The Role of Local Elites in a Growth-Based Future
Javorcik, B.S., et al., 2022. Economic Costs of Friend-shoring.Abstract
Geo-political tensions and disruptions to global value chains have led policymakers to reevaluate their approach to globalisation. Many countries are considering regionalisation and friend-shoring – trading primarily with countries sharing similar values – as a way of minimising exposure to weaponisation of trade and securing access to critical inputs. If followed through, this process has the potential to reverse global economic integration of recent decades. This paper estimates the economic costs of friend-shoring using a quantitative model incorporating inter-country inter-industry linkages. The results suggest that friend-shoring may lead to real GDP losses of up to 4.6% of global GDP. Thus, although friend-shoring may provide insurance against extreme disruptions and increase the security of supply of vital inputs, it would come at a significant cost.

#DevTalks: The Case of Knowledge-Intensive Services in Costa Rica

Speaker: Andres Valenciano, John F. Kennedy Fellow, HKS MC/MPA '23

Moderator: Alejandro Rueda-Sanz, Research Fellow, Growth Lab

About the speaker: Andres is currently a John F. Kennedy Fellow at the MC/MPA program at Harvard Kennedy School. Previously he was the Minister of Foreign Trade of Costa Rica, responsible for Costa Rican foreign trade policies, export promotion, and attraction of foreign investment, as well as the official representation before several multilateral organizations, such as the World Trade Organization (WTO). During his tenure, he was...

Read more about #DevTalks: The Case of Knowledge-Intensive Services in Costa Rica
Eichengreen, B., Hausmann, R. & Panizza, U., 2022. Yet it Endures: The Persistence of Original Sin.Abstract
Notwithstanding announcements of progress, "international original sin" (the denomination of external debt in foreign currency) remains a persistent phenomenon in emerging markets. Although some middle-income countries have succeeded in developing markets in local-currency sovereign debt and attracting foreign investors, they continue to hedge their currency exposures through transactions with local pension funds and other resident investors. The result is to shift the locus of currency mismatches within emerging economies but not to eliminate them. Other countries have limited original sin by limiting external borrowing, passing up valuable investment opportunities in pursuit of stability. We document these trends, analyzing regional and global aggregates and national case studies. Our conclusion is that there remains a case for an international initiative to address currency risk in low- and middle-income economies so they can more fully exploit economic development opportunities.
2022 Nov 28

Research Seminar: Electoral Turnovers

10:15am to 11:30am

Location: 

Weil Hall (Belfer L1) / Zoom (registration information below)

The Growth Lab Research Seminar series is a weekly seminar that brings together researchers from across the academic spectrum who share an interest in growth and development.

Speaker: Vincent Pons, Associate Professor, Harvard Business School

Abstract: In most national elections, voters face a key choice between continuity and change. Electoral turnovers occur when the incumbent candidate or party fails to...

Read more about Research Seminar: Electoral Turnovers
2022 Nov 21

Why Follow the Fed? Monetary Policy in Times of US Tightening

10:15am to 11:30am

Location: 

Weil Hall (Belfer L1) / Zoom (registration information below)

The Growth Lab Research Seminar series is a weekly seminar that brings together researchers from across the academic spectrum who share an interest in growth and development.

Speaker: Gonzalo Huertas, Economist, International Monetary Fund

Abstract: I conduct interviews with 32 Central Bankers from Emerging Markets and present five unifying themes that explain their behavior when reacting to a U.S. monetary tightening. I then estimate the impulse response functions of their two main monetary tools, the policy rate...

Read more about Why Follow the Fed? Monetary Policy in Times of US Tightening
Hausmann, R., Schetter, U. & Yildirim, M.A., 2022. On the Design of Effective Sanctions: The Case of Bans on Exports to Russia.Abstract
We analyze the effects of bans on exports at the level of 5,000 products and show how our results can inform economic sanctions against Russia after its invasion of Ukraine. We begin with characterizing export restrictions imposed by the EU and the US until mid May 2022. We then propose a theoretically-grounded criterion for targeting export bans at the 6-digit HS level. Our results show that the cost to Russia are highly convex in the market share of the sanctioning parties, i.e., there are large benefits from coordinating export bans among a broad coalition of countries. Applying our results to Russia, we find that sanctions imposed by the EU and the US are not systematically related to our arguments once we condition on Russia’s total imports of a product from participating countries. Quantitative evaluations of the export bans show (i) that they are very effective with the welfare loss typically ∼100 times larger for Russia than for the sanctioners. (ii) Improved coordination of the sanctions and targeting sanctions based on our criterion allows to increase the costs to Russia by about 60% with little to no extra cost to the sanctioners. (iii) There is scope for increasing the cost to Russia further by expanding the set of sanctioned products.
2022 Oct 17

The Value of Skills: New Evidence From Apprenticeship Plans

10:15am to 11:30am

Location: 

Weil Hall (Belfer L1) / Zoom (registration information below)

The Growth Lab Research Seminar series is a weekly seminar that brings together researchers from across the academic spectrum who share an interest in growth and development. This seminar is co-sponsored by the Project on Workforce at Harvard University.

Speaker: Christina LangerPhD candidate at KU...

Read more about The Value of Skills: New Evidence From Apprenticeship Plans
Schetter, U., 2022. A Measure of Countries’ Distance to Frontier Based on Comparative Advantage.Abstract
This paper presents a structural ranking of countries by their distance to frontier. The ranking is based on comparative advantage. Hence, it reveals information on the productive capabilities of countries that is fundamentally different from GDP per capita. The ranking is centered on the assumption that countries’ capabilities across products are similar to those of other countries with comparable distance to frontier. It can be micro-founded using standard trade models. The estimation strategy provides a general, non-parametric approach to uncovering a log-supermodular structure from the data, and I use it to also derive a structural ranking of products by their complexity. The underlying theory provides a flexible micro-foundation for the Economic Complexity Index (Hidalgo and Hausmann, 2009).
Diodato, D., Hausmann, R. & Schetter, U., 2022. A Simple Theory of Economic Development at the Extensive Industry Margin.Abstract
We revisit the well-known fact that richer countries tend to produce a larger variety of goods and analyze economic development through (export) diversifcation. We show that countries are more likely to enter ‘nearby’ industries, i.e., industries that require fewer new occupations. To rationalize this finding, we develop a small open economy (SOE) model of economic development at the extensive industry margin. In our model, industries differ in their input requirements of non-tradeable occupations or tasks. The SOE grows if profit maximizing frms decide to enter new, more advanced industries, which requires training workers in all occupations that are new to the economy. As a consequence, the SOE is more likely to enter nearby industries in line with our motivating fact. We provide indirect evidence in support of our main mechanism and then discuss implications: We show that there may be multiple equilibria along the development path, with some equilibria leading on a pathway to prosperity while others resulting in an income trap, and discuss implications for industrial policy. We finally show that the rise of China has a non-monotonic effect on the growth prospects of other developing countries, and provide suggestive evidence for this theoretical prediction.
di Giovanni, J., et al., 2022. Global Supply Chain Pressures, International Trade, and Inflation.Abstract

We study the impact of the Covid-19 pandemic on Euro Area inflation and how it compares to the experiences of other countries, such as the United States, over the two-year period 2020-21. Our model-based calibration exercises deliver four key results: 1) Compositional effects – the switch from services to goods consumption – are amplified through global input-output linkages, affecting both trade and inflation. 2) Inflation can be higher under sector-specific labor shortages relative to a scenario with no such supply shocks. 3) Foreign shocks and global supply chain bottlenecks played an outsized role relative to domestic aggregate demand shocks in explaining Euro Area inflation over 2020-21. 4) International trade did not respond to changes in GDP as strongly as it did during the 2008-09 crisis despite strong demand for goods. These lower trade elasticities in part reflect supply chain bottlenecks. These four results imply that policies aimed at stimulating aggregate demand would not have produced as high an inflation as the one observed in the data without the negative sectoral supply shocks.

Pages