Government procurement plays a significant role in shaping domestic production and trade flows, yet its impact on international trade is not fully understood. This paper examines how fiscal policy shocks from U.S. government procurement influence exports, imports, and the trade balance at the industry level.  I leverage variation in Department of Defense contract awards by industry and over time, using the defense news shock instrument to identify exogenous procurement shocks. I then incorporate domestic input-output linkages to estimate the effect of direct and indirect procurement shocks on trade flows. Using panel local projections to trade dynamic effects, my baseline results indicate that a $1 increase in procurement is associated with a $0.02 rise in imports and a $0.03 rise in the trade deficit within a quarter of the shock. However, when predicting procurement using the external instrument, I find no statistically significant effects on trade outcomes.

Artificial Intelligence (AI) has the potential to reshape countries’ comparative advantage and transform international trade patterns. In this paper, we model the effect of AI technologies on bilateral trade flows by introducing an AI shock to the production process and analyzing how this shock influences trade dynamics. We then empirically estimate the relationship between AI exposure and bilateral exports in recent years. Our findings reveal that AI has a significant positive correlation with trade: a one standard deviation increase in AI exposure is associated with a 31 percent rise in exports, on average. Additionally, we explore how this effect varies across trading partners, highlighting distinct patterns between advanced, emerging, and low-income economies.

This paper contributes to the broader narrative on the fiscal impact of immigration by estimating how it affects general sales tax revenue in the U.S. Since immigrants endogenously sort themselves among states, I employ a Bartik-style shift-share instrument to predict immigrant inflow by state and decade based on the country of origin. My preliminary results indicate that, on average, immigrant inflow per capita has a statistically insignificant relationship with change in sales tax revenue per capita.

While the World Trade Organization (WTO) has successfully lowered tariffs to sustainable levels, there has been a substantial rise in alternative protectionist measures, like standards and regulations, as trade policy instruments. These Non-tariff Measures (NTMs) have led to an imbalance in market access between developed and developing economies, with alarming repercussions in agricultural trade. This paper provides a brief overview of NTMs, focusing on Sanitary and Phyto-Sanitary (SPS) measures and their effect on developing countries' trade. Specifically, we analyze SPS notifications based on three different country classifications - the WTO classification, income-based World Bank Classification, and the agricultural sector share to GDP or GDP-based classification. Our results indicate that developed countries are the primary cause of the surge in NTMs.

Over the past 30 years, the world has witnessed a period of income convergence, as the gap in income levels between economies has narrowed. Economic growth has improved living conditions for many people around the world but not all individuals and economies have benefited equally from the changes brought about by more open trade. This year’s Report explores the interlinkages of trade and inclusiveness across and within economies, discussing how trade policies need to be complemented by domestic policies to make the benefits of trade more inclusive. The Report underlines that diversifying global value chains, reducing trade costs through digitalization, and transitioning to a low-carbon economy can create new opportunities for low- and middle-income economies. Furthermore, when trade policies are complemented by domestic measures, such as labour, education and competition policies, the gains from trade can more easily flow to workers and consumers. Enhanced WTO cooperation with other international organizations can magnify their combined action to increase inclusiveness across and within economies.