Simon Fuchs (Dartmouth Visiting Ph.D Student) will present:
"Shifting the Spatial Equilibrium: Evidence on Trade Adjustment from a  Natural Experiment "
at 12:15pm on Tuesday, September 19, 2017 in (051 Buchanan) Volanakis - TUCK
Lunch will be served at noon.

If you will be attending the Lunch Seminar please RSVP to Doreen Aher at TUCK so she can order the appropriate amount of food.
[log in to unmask]<mailto:[log in to unmask]>


Abstract:


This study provides causal evidence that an asymmetric temporary trade shock to a set of connected locations can permanently change the spatial and structural composition of an economy. I analyse Spain during and after WW1, a setting which features the intersection of two natural experiments, that is the Spanish flu from 1918/19 which reduced labour supply heterogeneously across regions within Spain and the export boom due to WW1 which dramatically increased demand for specific sectors. Analysing a novel dataset combining detailed information on regional labor markets with trade data, I show in the reduced form that the trade shock induced large scale re-allocation of labor across sectors and provinces within Spain inducing dynamics that persisted into the 1920s. Furthermore, I exploit this exogenous variation to estimate an economic geography model in order to ask the counterfactual question to what extent the trade shock shifted the equilibrium of the Spanish economy permanently. In order to credibly inform my modelling choice I flexibly estimate a meta economic geography model that nests both exogenous and endogenous sources of comparative advantage. Comparing the steady states of the pre-shock and post-shock economy I find substantial persistent reallocation of labor across provinces and sectors.


Paper not available at this time.





########################################################################

To unsubscribe from the ECONOMICS-SEMINARS list, click the following link:
https://listserv.dartmouth.edu/scripts/wa.exe?SUBED1=ECONOMICS-SEMINARS