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International business cycles have become highly synchronized across countries. To understand this empirical phenomenon, I develop a multi-country real business cycle model with trade that captures potential explanations such as shocks to productivity and trade. Then I match the data exactly with the endogenous outcomes of the model so that shocks fully account for the data, including GDP and trade shares. Calibrating the model to a panel of G7 countries during 1992–2014, I find that trade-linkage shocks, which capture increased globalization and trade volatility, account for the most in explaining the synchronization of international business cycles. In contrast, country-specific shocks play relatively minor roles. Furthermore, I use my model to address the trade co-movement puzzle, which states that international real business cycle models should be predicting a much stronger link between trade and cross-country GDP correlations. Once I account for the trade-linkage shocks, the model predicts a strong link between trade and business cycle co-movement.


We examine the impact of international trade on the gender wage gap and female labor force participation using a multi-sector quantitative trade model that incorporates endogenous labor supply and home production. In this model, as trade increases, the male- and intermediate-intensive goods sector reduces labor inputs in favor of cheaper imported intermediates. Since goods and services are complements, this shift increases the demand for labor in the services sector, which is female-intensive, leading to an increase in female labor force participation and a decrease in the gender wage gap. Additionally, since home production is less intermediate-intensive than market production, individuals substitute home production with market goods and services, further increasing female labor force participation. We find that trade explains 12% of the increased female labor force participation and 14% of the decreased gender wage gap.


WORK IN PROGRESS


OLDER WORK

Controlled school choice over public schools has been an important concern for both the parents of students and schools. It gives numerous options for how fairness and diversity considerations can be balanced. The notion of diversity is often imposed by limiting the number of admitted students who have the same type (quotas), or by reserving seats for each student type (reserves). The controlled school choice rule that I explore in this paper is the combination of “reserves” and “quotas,” where schools implement minimum reserves (a soft bound) and maximum quotas (a hard bound) together. In this paper, I provide a full characterization of the mixed bounds approach, and show that it satisfies the requirements for the existence of a student-optimal stable matching.