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: We examine the optimal combinations of upfront fees and royalties for technology licensing under decentralized and centralized wage bargaining. When the innovator shares the benefits of a cost-saving innovation with two duopoly firms, labor unions, and consumers, the innovator optimally chooses a per-unit royalty (fixed fee) under decentralized (centralized) bargaining. Cost-saving technology licensing is penalized by a high wage rate under decentralized bargaining, inducing the innovator to mask the cost reduction through royalty licensing. Despite this masking, the low wage pass-through rate under decentralized bargaining makes all relevant parties better off, but labor unions worse off than under centralized bargaining.
Work in Progress
Powering Intelligence: Data Centers and Spatial Welfare
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)