Abstract: This study estimates the determinants of trade in healthcare services in the European Union (EU) with a structural gravity framework. Using the EU single market as a setting with minimal general trade barriers, I recover healthcare trade elasticity, country-specific technologies, and bilateral frictions for a panel of 22 members between 2012 and 2019. Estimates provide a trade elasticity of 2.25, and recovered technologies indicate a large divide between healthcare exporters in Western and Central-Eastern Europe. The counterfactual analysis assesses if trade integration can relieve welfare pressures from the aging population. Lessening bilateral frictions by 50% has little impact on current trade shares but converging to best-practice frictions off-sets about 25% of aging welfare loss and a uniform 25% improvement in technology off-sets about 50%. The findings suggest that cross-border healthcare integration can help absorb demographic pressure, but that its largest payoff comes when it expands credible, usable treatment capacity and raises healthcare productivity rather than only marginally lowering bilateral trade frictions.
Abstract: This paper analyzes how financial sanctions may drive BRICS countries to create alternative trade settlement mechanisms. Empirical evidence shows that trade and financial sanctions combined are associated with intra-BRICS trade reorientation, most notably in Russia. Based on this, I construct a dynamic quantitative gravity model that incorporates payment system frictions for dollar-settled trade. BRICS countries may be motivated to create an alternative settlement mechanism to facilitate trade among themselves if it helps them to circumvent the burden of sanctions in their trade operations. However, this alternative mechanism contains recurrent scale-dependent network costs and switching costs. Under collective formation, the planner favors adoption at 8 financial sanctions per country, while full-bloc voluntary entry requires 23 per country. Under sequential formation, China-Russia is the first mutually beneficial arrangement at 27 financial sanctions per country. At the current level of sanctions heterogeneity, China-Russia is the only mutually beneficial pair. Brazil and India may subsequently join, creating an internally and externally stable four-member coalition, and South Africa does not benefit from joining. This may provide policymakers with a tool to evaluate when financial sanctions create an incentive for a set of targeted countries to create alternative trade mechanisms in a context of geoeconomic tension.
Abstract: This paper examines how large trade shocks affect workers differently over the life cycle and how these heterogeneous economic effects translate into electoral outcomes. Using the U.S. China Shock as a source of plausibly exogenous variation in local labor demand across commuting zones, I compare cohorts that age through the shock in more exposed locations to otherwise similar cohorts in less exposed areas. The analysis uses the Autor, Dorn, and Hanson import-penetration exposure measure for identification, while treating the 2000 granting of Permanent Normal Trade Relations (PNTR) to China as the institutional break that helps interpret the timing and intensity of the post-2000 shock. I show that workers approaching retirement in highly exposed commuting zones experience the largest and most persistent income losses, consistent with limited adjustment horizons and irreversible labor market disruptions. These losses are accompanied by significant political consequences: electoral punishment of incumbents is concentrated in locations where trade-induced income declines fall disproportionately on older, highly politically engaged cohorts. The results highlight a behavioral and political-economy amplification mechanism: trade shocks that generate concentrated losses among groups with high electoral participation can produce political responses that are large relative to the average economic shock.