Search Results
Discussion Paper
The Dollar in the U.S. International Transactions (USIT) Model
The dollar's 20 percent climb against a broad index of foreign currencies since the middle of 2014 has led to an increased focus on how dollar fluctuations affect the U.S. economy. This note provides further detail on the structure and estimation of the trade block of the USIT model. In the context of the model, we present the estimated effect of a 10 percent dollar appreciation on U.S. trade flows and trade prices. We conclude with an assessment of the model's performance since the dollar began its steep appreciation in the summer of 2014.
Working Paper
Tariffs and Goods-Market Search Frictions
We study uniform tariffs in a general equilibrium dynamic model with search frictions between heterogeneous exporting producers and importing retailers. We analytically characterize unilateral import tariffs that maximize domestic welfare. Search frictions lower these tariffs because of market thickness effects, which reinforce aggregate production nonconvexities. A calibration using 2016 U.S. and Chinese data suggests that optimal U.S. unilateral and Nash equilibrium tariffs with baseline search frictions are 10 ppt. below those in a model with reduced search frictions. Changes in welfare in ...
Working Paper
The Rise of Exporting By U.S. Firms
Although a great deal of ink has been spilled over the consequences of globalization, we do not yet fully understand the causes of increased worldwide trade. Using confidential microdata from the U.S. Census, we document widespread entry into countries abroad by U.S. firms from 1987 to 2006. We show that this extensive margin growth is unlikely to have been due to significant declines in entry costs. We instead find evidence of large roles for the development of the internet, trade agreements, and foreign income growth in driving these trends.
Working Paper
Bunching Estimation of Elasticities Using Stata
A continuous distribution of agents that face a piecewise-linear schedule of incentives results in a distribution of responses with mass points located where the slope (kink) or intercept (notch) of the schedule changes. Bunching methods use these mass points to estimate an elasticity parameter, which summarizes agents' responses to incentives. This article introduces the command bunching, which implements new non-parametric and semi-parametric identification methods for estimating elasticities developed by Bertanha et al. (2021). These methods rely on weaker assumptions than currently made ...
Working Paper
Goods-Market Frictions and International Trade
We add goods-market frictions to a general equilibrium dynamic model with heterogeneous exporting producers and identical importing retailers. Our tractable framework leads to endogenously unmatched producers, which attenuate welfare responses to foreign shocks but increase the trade elasticity relative to a model without search costs. Search frictions are quantitatively important in our calibration, attenuating welfare responses to tariffs by 40 percent and increasing the trade elasticity by 50 percent. Eliminating search costs raises welfare by 1 percent and increasing them by only a few ...
Discussion Paper
Seasonal Unemployment Rate Differences by Race, Ethnicity, and Gender
The labor market experiences of Americans differ by race, ethnicity, and gender. For example, between 1977 and 2019, the monthly standard deviation (volatility) of the unemployment rate for Black workers was 3.2 percent, substantially higher than the 1.5 percent experienced by their white counterparts.
Discussion Paper
Introducing New Valuation Change Data for U.S. Cross-Border Portfolio Holdings
The most comprehensive data on cross-border capital holdings for the United States come from the Treasury International Capital (TIC) System. These data inform the official U.S. balance of payments statistics and are crucial for understanding U.S. capital flows, their causes, and their effects on the U.S. economy.