Events

Dr. Joaquin Blaum
Assistant Professor of Economics
Brown University

I investigate the consequences of firms’ joint import and export decisions in the context of large devaluations. I provide empirical evidence that large devaluations are characterized by an increase in the aggregate share of imported inputs in total input spending, and by reallocation of resources towards import intensive firms, contrary to what standard quantitative trade models predict. These facts are explained by the expansion of exporters, which are intense importers. I develop a model where firms globally decide their import and export strategies and discipline it to match salient features of the Mexican micro data. After a counterfactual devaluation, the model predicts that the aggregate import share increases as exporters gain market share. The model predicts that the devaluation has a positive effect on aggregate productivity, in contrast to the negative effect predicted by the standard model of importing used in the literature.

This is a joint seminar organized by HKU, CUHK, City U, HKUST and Lingnan U.

Please contact Xiameng PAN at xmpan@connect.hku.hk for registration.