Hi! I'm an Assistant Professor of Economics at NYU Abu Dhabi and CESifo Research Affiliate. I was previously a postdoctoral fellow at HEC Lausanne. I obtained my PhD in Economics at the University of Michigan in 2021.
Research interests: International economics
Email: bbonadio@nyu.edu
CV | Google scholar | Twitter
Ports vs. Roads: Infrastructure, Market Access and Regional Outcomes
Current draft, (March 2025) | Coverage: VoxDev
What determines the relative gains from improving different parts of a transportation network? Focusing on port and road improvements in India, I develop a framework to jointly estimate the port quality and road-type trade costs using a novel transaction-level export dataset. I embed these estimates in a general equilibrium model of international and domestic trade. I emphasize a key elasticity of route switching, that governs both relative returns to different types of infrastructures and their complementarity. Port improvements have higher returns under the current infrastructure network, and there are gains from better coordination between road and port investments.
Feeding the Tigers: Remittances and Conflict in Sri Lanka, with Andrei Levchenko, Dominic Rohner and Mathias Thoenig
Current draft, (June 2025)
This paper estimates and quantifies the impact of the diaspora remittance flows on the conflict intensity and outcomes in the Sri Lankan Civil War during the period 1996-2009. We develop an approach to infer which remittance inflows were likely to benefit the Tamil Tiger rebels relative to the central government based on Facebook connections data at the subnational level. Using shocks to source country remittance outflows, we showthat exogenous increases in remittances accessible to the Tamil Tigers significantly increased their fighting strength. We then set up a quantitative model of two-sided armed conflict over many contested geographic locations, augmented with remittance flows that affect the fighting strengths of the two sides. We structurally estimate the key parameters using remittance and conflict data, and calibrate the model to the Sri Lankan subdistricts over the period of the conflict. Our main quantitative finding is that remittances had a significant impact on the timing of the central government victory, and were a substantially more important component of the military strength of the Tamil Tigers than of the government. Remittances that favored the Tamil Tiger rebels may have prolonged the war by as much as 14 years.
Playing with blocs: Quantifying decoupling, with Zhen Huo, Elliot Kang, Andrei Levchenko, Nitya Pandalai-Nayar, Petia Topalova, and Hiroshi Toma
Current draft, (October 2024)
We adopt a data-driven approach to measure trade fragmentation over the period 2015-2023. We assign countries to the US bloc, the China bloc, or to an unaligned group based on whether their trade costs with the US and China increased or decreased over this period. We find that the US bloc and the China bloc each contain roughly a quarter of the countries in the world, with about half the countries remaining unaligned. However, we also find that as cross-bloc trade costs increased, within-bloc trade costs fell. We use a quantitative model to compute the real income effects of this reconfiguration of the global trade costs. The median country in the world, and the median country within each bloc, has 0.4-0.6% higher real income as a result of the observed decoupling, contrary to the widespread belief that fragmentation has been welfare-reducing. Finally, we find a modest amount of bloc misalignment: the median country in the US bloc would actually be better off in the China bloc, and vice versa. These results suggest that trade decoupling does not always follow trade-driven economic interests.
And There Was Light: Trade and the Development of Border Regions, with Marius Brülhart, and Guillaume Rais
Current draft, (December 2024)
Does international trade help or hinder the economic development of border regions? Theory tends to suggest that trade helps, but it can also predict the reverse. We estimate how changes in bilateral trade volumes affect economic activity along roads running inland from international borders, using satellite night-light measurements for up to 1,799 border-crossing roads worldwide. We observe a significant ‘border shadow’: on average, lights are 18 percent dimmer within 50 kilometers of the border than further inland. We find this difference to be reduced by trade expansion as measured by exports and instrumented with asymmetric tariff changes on the opposite side of the border. In our baseline estimate, a 10% increase in exports to a particular neighbor country is associated with a brightening of lights by some 2.8 percent at the border, but by only 1.6 percent 300 kilometers inland. We provide evidence that local export-oriented production is a significant mechanism behind the observed effect. Our empirical results can also shed light on equilibrium properties in a variety of spatial models.
Migrants, Trade and Market Access
forthcoming, Review of Economics and Statistics | Final draft (September 2023), replication package
Migrants shape market access: first, they reduce international trade frictions and second, they change the geographical location of domestic demand. This paper shows that both effects are quantitatively relevant. It estimates the sensitivity of exports and imports to immigrant population and quantifies these effects in a model of inter- and intra-national trade and migration calibrated to US states and foreign countries. Reducing US migrant population shares back to 1980s levels increases import (export) trade costs by 7% (2.5%) on average and decreases US natives’ real wages by more than 2%. States with higher exposure to immigrant consumer demand (both from within the state and from other states) than to migrant labor supply competition suffer more from the removal of migrants. States with higher export and import exposure suffer more from the increased trade costs.
Globalization, Structural Change and International Comovement, with Zhen Huo, Andrei Levchenko and Nitya Pandalai-Nayar
Journal of Monetary Economics, 151 (April 2025), 103745 | Final draft, replication package (see also BHPL model code)
We study the roles of globalization and structural change in the evolution of international GDP comovement over the period 1978–2007. In this period, trade integration between advanced economies increased rapidly while average GDP correlations remained stable. Structural change – reallocation of economic activity towards services – is important in resolving this apparent puzzle. Business cycle shocks in the service sector are less internationally correlated than in manufacturing, and thus structural change lowers GDP comovement by increasing the GDP share of less correlated sectors. Globalization – reductions in trade costs – exerts two opposing effects on international comovement. While greater trade linkages increase international transmission of shocks, globalization also induces structural change towards services. We quantify these effects in a multi-country, multi-sector model of international production and trade. The two opposing effects of globalization on comovement largely cancel each other out, limiting the net contribution of globalization to increasing international comovement
Global Supply Chains in the Pandemic, with Zhen Huo, Andrei Levchenko and Nitya Pandalai-Nayar
Journal of International Economics, 133 (November 2021), 103534 | Bhagwati Award (best international trade paper published in the JIE in 2021-22) | Final draft, replication package (see also BHPL model code), Coverage: VoxEU column, The Economist, Economic Report of the President (2022, 2023, 2024)
We study the role of global supply chains in the impact of the Covid-19 pandemic on GDP growth using a multi-sector quantitative framework implemented on 64 countries. We discipline the labor supply shock across sectors and countries using the fraction of work in the sector that can be done from home, interacted with the stringency with which countries imposed lockdown measures. One quarter of the total model-implied real GDP decline is due to transmission through global supply chains. However, “renationalization” of global supply chains does not in general make countries more resilient to pandemic-induced contractions in labor supply. This is because eliminating reliance on foreign inputs increases reliance on the domestic inputs, which are also disrupted due to nationwide lockdowns. In fact, trade can insulate a country imposing a stringent lockdown from the pandemic-shock, as its foreign inputs are less disrupted than its domestic ones. Finally, unilateral lifting of the lockdowns in the largest economies can contribute as much as 2.5% to GDP growth in some of their smaller trade partners.
The Speed of the Exchange Rate Pass-Through, with Philip Sauré and Andreas Fischer
Journal of the European Economic Association, 18:1 (2020) | replication package, VoxEU column
On January 15, 2015, the Swiss National Bank discontinued its minimum exchange rate policy of 1 euro against 1.2 Swiss francs. This policy change resulted in a sharp, unanticipated, and permanent appreciation of the Swiss franc by more than 11% against the euro. We analyze the pass-through of this unusually clean exchange rate shock into import unit values at the daily frequency using Swiss transaction-level trade data. Our key findings are twofold. First, for goods invoiced in euros, the pass-through is immediate and complete. Second, for goods invoiced in Swiss francs, the pass-through is partial and exceptionally fast: beginning on the second working day after the exchange rate shock, the medium-run pass-through is reached after 12 working days.
The Economics and Politics of Revoking NAFTA, with Raphael Auer and Andrei Levchenko
IMF Economic Review, 68:1 (2020), Special Issue: 2018 IMF Jacques Polak Annual Research Conference | VoxEU column, Coverage: Financial Post (Canada), Financial Times
We provide a quantitative assessment of both the aggregate and the distributional effects of revoking NAFTA using a multi-country, multi-sector, multi-factor model of world production and trade with global input-output linkages. Revoking NAFTA would reduce US welfare by about 0.2%, and Canadian and Mexican welfare by about 2%. The distributional impacts of revoking NAFTA across workers in different sectors are an order of magnitude larger in all three countries, ranging from -2.7 to 2.23% in the United States. We combine the quantitative results with information on the geographic distribution of sectoral employment, and compute average real wage changes in each US congressional district, Mexican state, and Canadian province. We then examine the political correlates of the economic effects. Congressional district-level real wage changes are negatively correlated with the Trump vote share in 2016: districts that voted more for Trump would on average experience greater real wage reductions if NAFTA is revoked.
Checkpoints and Local Economic Development, with Veda Narasimhan
Social Network in Production Network, with Jaedo Choi