Research interests
International Trade, Environmental Economics, Innovation and Spillover
Working papers
Green Industrial Policy in a Globalized Economy (Formerly titled: Green Industrial Policies and the Energy Transition in the Globalized Economy)
Excellence Award, 2024 Korea-America Economic Association Job Market Conference
Fumio Dei Award, 2024 IEFS Japan Fumio Dei Conference
Abstract: This paper studies green industrial policy in an open economy when key energy-transition inputs are internationally tradable. I develop a dynamic multi-country general equilibrium trade model with input--output linkages in which renewable-energy equipment is traded, electricity generation is local, and equipment production features learning-by-doing spillovers. The model highlights a sharp difference between two instruments. Subsidies to renewable generation raise domestic equipment demand and imports, shifting production and learning gains toward foreign suppliers and worsening the subsidizing country’s terms of trade. Subsidies to domestic equipment manufacturing expand home production, concentrate learning domestically, and lower the world price of clean equipment, accelerating decarbonization abroad. Quantitatively, applying the framework to the U.S. Inflation Reduction Act implies sizable global CO2 reductions and small welfare gains, with the U.S. capturing a larger welfare gain than the world as a whole; incidence is shaped by equipment import penetration and the locality of learning.
Learning and Expectations in Dynamic Spatial Economies (Supplementary Appendix) (with Jingting Fan and Fernando Parro) NBER WP #31504
Abstract: The impact of shocks in dynamic spatial environments depends on how forward- looking agents anticipate the path of future fundamentals. We develop a framework that incorporates flexible beliefs about future fundamentals into a general class of dynamic spatial models, allowing for beliefs that are evolving, uncertain, and heterogeneous across agents. This framework provides a tractable methodology to quantify the consequences of both ex-ante and ex-post shocks. We apply it to two settings: an ex- post evaluation of the China productivity shock on the U.S. economy, and an ex-ante study of the economic impacts of climate change. In both cases, we study the impact of deviating from perfect foresight on key economic outcomes.
Wage Bargaining Institutions, Technology Licensing, and Welfare (with Seung-Gyu Sim)
Abstract: This paper examines how wage bargaining institutions shape technology licensing and welfare in a unionized duopoly. We show that an outside innovator with a non-drastic cost-saving technology licenses it through a pure royalty (fixed-fee) contract rather than a two-part tariff under decentralized (centralized) wage bargaining. Under decentralized bargaining, adopting the cost-saving technology raises wages, incentivizing the innovator to mask efficiency gains with royalties. Despite production inefficiencies due to royalty licensing, decentralized firm-level bargaining lowers wages, increases industry output, and makes consumers, licensees, and the innovator better off, while labor unions benefit more under centralized bargaining.
Powering Intelligence: Data Centers and Spatial Welfare
Abstract: Artificial intelligence is often viewed as “weightless,” yet its production increasingly relies on electricity-intensive datacenters that cluster geographically. Using a stacked event-study design with balancing-authority (BA) electricity prices, I show that major datacenter expansions raise electricity prices in tight grids with scarce headroom, while effects are negligible in non-tight markets. I embed these findings in a quantitative spatial general-equilibrium model in which Compute (datacenter AI services) is highly tradable, but its production is tied to local electricity constraints. This structure implies a production–consumption decoupling: benefits diffuse widely through trade, while congestion costs remain local and spill over within BAs. In a counterfactual based on the announced datacenter pipeline, the model-implied compute price index falls by about 60% nationally while average retail electricity prices rise by about 8%. Aggregate real income increases by 0.31%, but heterogeneity is large: AI hubs gain about 0.54%, whereas congested datacenter hubs experience double-digit electricity inflation and muted gains.
Work in Progress
The Carbon Cost of Free Trade: Optimal Carbon Tax as a Trade Policy Disguise
(Selected) Published journal articles
Predoctoral research
Technology Licensing and Environmental Policy Instruments: Price Control versus Quantity Control (with Seung-Gyu Sim), Resource and Energy Economics, 2020, Volume 62, November 2020, 101187 (working paper version)
Refereed articles in interdisciplinary journals
Economic and Air Pollution Disparities: Insights from Transportation Infrastructure Expansion (with Sunbin Yoo, Junya Kumagai, Kohei Kawasaki, Bingqi Zhang, and Shunsuke Managi), Transportation Research Part D: Transport and Environment, 2023, Vol. 125, 103981
Covered in Earth-graphy (in Japanese)