REF 2021 ICS: "Modelling the Impact of Future Trade Agreements on the United Kingdom's Economy", with A. Nicolae (see 'The UK's Exit from the EU' tab for more details)
Perceived Job Security and Politicians’ Legislative Effort, Public Choice (2025) - Online Appendix
Losing Sleep at the International Market: Daylight Saving Time and Exchange Rates, Economics Letters (2024)
International Trade, Non-Trading Firms and Their Impact on Productivity, with S. Millard and A. Nicolae, Bank of England Staff Working Paper No. 787 (2019)
Variable Trade Costs and the Dynamics of International Trade - This Version October 2024
Abstract:
What is the optimal specification for variable trade costs? Existing research in static settings has compared the ability of alternative specifications for variable trade costs, including the canonical 'Iceberg' costs, to match long run trends in the data, as well as the long-run welfare responses to trade liberalisation. We extend the previous static analysis to a dynamic framework to examine the optimal specification of variable trade costs when matching key dynamic moments in US trade data. We provide new evidence on the dynamics of US trade costs and show that, in a standard framework, as in empirical settings, a model that combines iceberg and non-iceberg costs is most successful at matching many of the key moments in the data. We also show that the choice of variable trade cost specification has dynamic welfare implications above and beyond static welfare differences.
To the Victor Go the Spoils? Asymmetric Trade Impacts of Inter-State Conflict - This Version June 2024
Abstract:
The impact of inter-state conflict on international trade is large and persistent at an aggregate level. However, within this negative impact, there is the potential for significant asymmetries and heterogeneity, depending on the outcome of the conflict. We examine the asymmetric impact of war on trade for 183 countries over the period 1950-2019, using the gravity model, and find evidence of significant asymmetries for trade between belligerent countries, with exports falling significantly more for victorious countries than for those that lost the inter-state conflict. These asymmetries also extend to trade between belligerent and neutral countries. Using counterfactual analysis indicates that the costs of war to trade on a exporter-year basis range from a 60% reduction to a 10% increase in total exports, with larger aggregate trade reductions predicted for lower income countries than for higher income countries.
Intermediate Inputs and the Transmission of Macroeconomic Shocks - This Version May 2025
Abstract:
In this paper we examine the combined role of horizontal and vertical trade in intermediate inputs and endogenous firm entry and exit in driving the intra-national and international transmission of shocks in a DSGE model of international trade. We show that this combination introduces a new quantitatively important channel through which macroeconomic shocks propagate within and between countries. The new channel has significant implications for the relationship between trade and business cycle comovement internationally, eliminating the 'Trade Comovement Puzzle'. Examining the specific case of the trade de-liberalization resulting from the UK's exit from the EU, we show that the predicted business cycle impact of 'Brexit' varies considerably depending on the realized nature of the trade cost shock. We support our predictions with new empirical evidence on the impact of the extensive margin of firms' trading on bilateral GDP comovement.
The Interaction of Labour Market Frictions and Heterogeneous Firms: Implications for Productivity, Unemployment and Vacancies, with S. Millard and A. Nicolae
Abstract:
The inability of Mortensen-Pissarides search and matching labour market models to match the observed volatility of unemployment, vacancies and the vacancy to unemployment ratio, the `Shimer (2005) Puzzle', remains one of the most significant puzzles in macroeconomics. We show that endogenous fluctuations in vacancy posting and unemployment that result from the entry and exit of less productive firms into and out of the market, generates significant volatility in unemployment, vacancies and the vacancy to unemployment ratio. Thus, we offer a potential solution for the Shimer (2005) Puzzle.
Gravity, Inter-Industry Heterogeneity and the Patterns of International Trade Revisited