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Ivan Allen College of Liberal Arts
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ItemTrade Trend and Treasures(Georgia Institute of Technology, 2022-07-30) Wang, XiaoxiThis dissertation examines the trend and treasures in international trade. The first chapter investigates the explanatory power of the backbone theory of international trade. It builds a model of comparative advantage to explain China’s opening to international trade in the mid-19th century. The model departs from perfect competition and balanced trade. This paper uses the natural experiment of China’s opening and constructs a unique and nearly complete dataset containing autarky prices and national trade flows at the product level, compiled from primary archival sources recently made accessible. The paper finds China’s pattern of trade is consistent with the theory of comparative advantage. The second chapter introduces a country’s foreign exchange management as a packed policy package composed of foreign exchange reserves, short-term interest rates and long-term interest rates. The paper builds a model to describe an exporter in a country without currency mismatch, who faces a trade-off between substitutable assets denoted in local currency and the dominant foreign currency. Empirical analysis of 32 OECD countries during 2001–2020 shows that countries with more robust foreign exchange management experienced a decreased total export volume, product diversity, and trade partner intensity. In such countries, industries with better capital support gain a comparative advantage. The third chapter identifies the reliance on USD as trade treasures as a channel on trade pattern. Specifically, the paper introduces the impact of USD on the US imports, through the channel of FX reserves accumulated by the exporting countries. The dataset covers the monthly data of 61 countries across 21 industries during January 2011 to December 2019. During the US Federal Reserve’s shift of its monetary policy to Taper Tantrum, the USD inverted its weakness to a stronger upward trend. The paper estimates if the reliance on USD as trade treasures has impact during the long-term and the short-term post-Taper Tantrum time. The paper finds that countries with stronger reliance on USD as trade treasures gained a comparative advantage in industries with higher financial vulnerability in exports to the US. Such positive impact was deterred by the Taper Tantrum shock, but still hold in the long-term.
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ItemThree Essays on the Impacts of Trade Liberalization(Georgia Institute of Technology, 2021-07-27) Yang, TongyangThis dissertation examines how a negative income shock induced by globalization affected US local economies through various channels, including labor market outcomes, crime rates, and poverty. The first chapter provides empirical results that trade liberalization with China reduced gender gaps in local U.S. labor markets. In MSAs with higher exposure to trade liberalization, the simple wage gender gap decreased, while the residual wage gap increased, indicating important selection effects in labor force participation decisions. The reduction in the gender labor force participation gap was driven by higher entry of women, in particular more educated women, and exit of the less educated men. This results in intrahousehold adjustments in work dynamics, with women entering the labor force to offset the lost income of male partners who left the labor force. We show that trade liberalization increased female workers' unemployment rate and reliance on part-time jobs. The second chapter provides empirical evidence that regions with higher minimum wage experienced reductions in crime after trade liberalization with China. Estimation shows that a negative income shock resulting from trade liberalization with China caused a rise in property crimes, while a higher minimum wage had a buffering effect on crimes. Notably, the most significant impact was on young adults aged 20-29. A higher minimum wage may bring younger workers to the labor market, thereby reducing potential property crime rates. This chapter suggests that a higher minimum wage could function as a form of insurance as it reduces crime in the presence of a negative income shock. The third chapter examines US-China trade liberalization's effect on socioeconomic indicators. We employ the Multidimensional Deprivation Index (MDI) and estimate the difference-in-difference model. Results show that young adults aged 17-24 experienced significant multidimensional deprivation mainly due to highschool education deprivation. There may also exist inter-generational spillover effects within the household - parents' labor market displacement due to trade liberalization may impact their children's wellbeing. Additionally, minimum wage and social welfare expenditures do not help alleviate the multidimensionally deprived population. This finding confirms that there was not much overlap between the income poor and those who were multidimensionally deprived.
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ItemEssays on the Economics of Climate Change and Geoengineering(Georgia Institute of Technology, 2020-12-06) Harding, AnthonyIn this dissertation, I examine the relationship between climate and economic activity. In particular, I analyze methods for the measurement of climate change impacts on macroeconomic outcomes and the role of solar geoengineering in reducing these impacts. Solar geoengineering is different from traditional mitigation in at least three ways; it is inexpensive, quick, and imperfect. These characteristics place the technology as an imperfect but arguably inevitable insurance policy against the extreme effects of climate change. As such, it is important to understand effect of the solar geoengineering option on aggregate and distributional economic outcomes. To examine the economic impacts of solar geoengineering, this study applies an empirically estimated causal relationship between country-level economic growth and climate to illustrative future climate scenarios with and without solar geoengineering. Solar geoengineering is found to have an uncertain, model dependent impact on global economic outcomes but is consistently found to reduce inter-country income inequality by averting the worst economic impacts of climate change in poorer countries. The final study of this dissertation examines the methodology for estimating macroeconomic impacts of climate change to analyze contrasting results between microeconomic and macroeconomic empirical studies of the US. This study develops a general equilibrium theoretical framework with weather shocks that demonstrates how local, micro-level weather shocks impact macroeconomic growth. Using the theoretical findings, I construct macroeconomic impacts of weather shocks across the spatial distribution and industrial composition of economic activity in the US. Weather shocks are found to have a significant impact at the microeconomic level, but as impacts are aggregated, the significance becomes masked by the aggregation. This suggests that macroeconomic impact estimates may obscure important underlying heterogeneity in weather impacts.
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ItemThe crowning of king cotton in the American south: Evidence from 1840 to 1975(Georgia Institute of Technology, 2020-07-28) Mao, XiThis is an episode of Southern cotton kingdom across the antebellum and postbellum periods. The study includes two events to explore the importance of cotton during the antebellum and postbellum periods. The study first uses the repeal of the British Corn Laws in the antebellum period to causally estimate the relationship among overseas cotton demand, cotton production, slavery, and political affiliation on pro-slavery in the American South. The results suggest that a single episode of trade liberalization can explain slaves' growth in cotton suitable land in the South, as well as the realignment of the political affiliation of pro-slavery in the antebellum South. The outbreak of the American Civil War in 1861 appeared to be an internal conflict caused by slavery. In fact, it was an irreconcilable conflict between the North and South political affiliations in the resource distribution of cotton production. The study estimates the causal relationship between cotton production and the polarization of landholding, using the magnitude of the Boll Weevil infestation in the agricultural South. The impact of the cotton economy lasted a long time after the Civil War in the South. The thesis evidence cotton significantly affected the land redistribution and land inequality in the South by the Boll Weevil infestation. Together, the repeal of the Corn Laws and the arrival of Boll Weevil allow us to causally explain the role of cotton in shaping the United States today.
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ItemInternalizing externalities: Roles of networks, clubs and policy commitments(Georgia Institute of Technology, 2020-04-26) Qu, JingwenExternalities arising from actions of one player in the economy and directly affecting the well-being of another are ubiquitous. In these situations, market equilibria often fail to be efficient. This dissertation explores the roles of networks, clubs and policy commitments in the internalization of externalities and thus in the generation of efficient outcomes. The first essay examines how network-based social incentives would affect the provision of public goods in endogenous networks. The second essay analyzes results of the formation of multiple climate clubs, as well as the role of free trade agreements among club members therein. The third essay studies effects of policy commitments to the provision of a new global-warming-relieving technology called solar radiation management relative to effects of policy commitments to carbon mitigation.