Many countries tax business revenue, effectively taxing every intermediate transaction in the supply chain. Why is this important? In production networks, such cascading taxes act like within-country tariffs on services, inflating input costs, suppressing cross-sector trade, and pushing firms toward inefficient vertical integration, with potentially large general-equilibrium consequences for entry, wages, and welfare—yet the magnitude has been unclear. What makes it hard to measure? Exogenous shifts in tax structure are rare, spillovers propagate across sectors and regions, vertical integration is poorly observed, and welfare effects require a structural counterfactual.

To tackle this problem, I exploit China’s staggered Business-to-VAT (B2V) reform, which removed cascading taxes on services. Combining SAT tax records, registry-based entry data, and interregional input–output tables for 2012 and 2017, I estimate event-study difference-in-differences and Poisson pseudo-maximum-likelihood gravity equations, then build a spatial general-equilibrium model with endogenous entry and an explicit make-or-buy margin. I identify an overall trade elasticity of 4.47 using a cross-product gravity estimator that nets out unobservables, solve the model in exact-hat algebra, and discipline in-house shares by matching observed entry responses.

I find that entry in treated service sectors increases by 21 percent; revenues of smaller and newer firms increase by 22 percent; and service-involving trade increases by 35.6 percent overall (47.9 percent within provinces; 20.7 percent across provinces). Quantitatively, eliminating cascading taxes raises welfare by 4.3 percent and real wages by 5.3 percent nationwide; in a revenue-neutral counterfactual, 94 percent of the welfare gain remains. In production networks, tax structure beats tax level: removing domestic ``tariffs'' inside the supply chain delivers most of the gains.

Many countries heavily rely on commodities for their production and exports, rendering them susceptible to fluctuations in global commodity prices. This paper investigates the impact of exogenous commodity price shocks on the domestic credit market, with a particular focus on credit allocation across firms. Using detailed credit registry data from Brazil and leveraging regional and bank-level variation in commodity exposure, we find that commodity price booms enhance domestic financial conditions, leading to an expansion in bank lending and improved credit conditions. This expansion is accompanied by considerable spillovers both across and within sectors, with significant improvement in credit conditions concentrated in the nontradable sector, and among smaller firms. We explore the potential channels driving these patterns and discuss broader macroeconomic implications.

This paper examines regional heterogeneity in the transmission of China’s monetary policy by estimating the effects of national-level monetary shocks on GDP growth across different economic regions. Using a Local Projections framework and an externally identified M2 monetary policy shock series from Chen et al. (2018), I find that the economically advanced East (coastal) region exhibits significantly weaker output responses compared to the rest of the country. While this pattern suggests that monetary expansion disproportionately stimulates growth in less-developed regions, further analysis indicates that the underlying drivers—such as differential land supply policies and a limited exchange rate channel—may reflect structural constraints rather than targeted policy effectiveness. These findings underscore the importance of understanding regional characteristics in shaping the aggregate impact of monetary policy and suggest that national policy interventions may need to be evaluated cautiously and complemented by region-specific strategies to improve the overall transmission process.

We examine how foreign aid shapes urban development in Sub-Saharan Africa at the very local level. Using data on 1,643 georeferenced Chinese aid projects, we analyze the effect of aid on the evolution of built surface and volume on 100-meter grids within a 2-kilometer radius microregion. Our staggered difference-in-differences approach reveals that foreign aid projects significantly increase local urbanization, with the effects decreasing with distance from the projects.  Treatment effects are mostly driven by residential development, particularly in previously underdeveloped areas. Our findings contribute to the understanding of the consequences of foreign aid on urban transformations in the developing world.