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François DE SOYRES (Banque Mondial Washington) “Value Added and Productivity Linkages Across Countries”

April 18, 12:15 pm - 1:30 pm

Time: 12:15pm – 13:30 pm
Date: 18th of April 2019
Place: Room 3001

François DE SOYRES (Banque Mondial Washington) “Value Added and Productivity Linkages Across Countries

Abstract : What is the relationship between international trade and business cycle synchronization? Using data from 40 countries, I find that trade in intermediate inputs plays a significant role in synchronizing GDP fluctuations across countries while trade in final goods is not significant. Motivated by this new fact, I build a model of international trade in intermediates that is able to replicate more than 85% of the empirical trade-comovement slope, offering the first quantitative solution for the “Trade Comovement Puzzle”. The model relies on two key assumptions: (i) price distortions due to monopolistic competition and (ii) fluctuations in the mass of firms serving each country. The combination of those ingredients creates a link between domestic measured productivity and foreign shocks through trade linkages. Finally, I provide evidence for the importance of those elements in the link between foreign shocks and domestic GDP.

Details

Date:
April 18
Time:
12:15 pm - 1:30 pm
Event Categories:
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Organizers

Edouard CHALLE
Julien PRAT