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Please use this identifier to cite or link to this item: http://hdl.handle.net/11299/139100

Title: Essays in International Trade.
Authors: Pieters, Gina Christelle
Keywords: Development
Issue Date: Jul-2012
Abstract: This dissertation consists of three essays studying di erent aspects of trade and development, and the implications for economic outcomes. The rst essay considers the e ect of trade on consumption inequality. Recent papers have shown that income inequality and consumption inequality do not co-move in the US, I use recent advances in trade theory to examine to what extent this could have been caused by trade. I embed a nonhomothetic hierarchic demand structure into a Melitz-Chaney model of trade with heterogenous models. The second essay, co-authored with Andrew Glover, examines the role of learning and economic growth. We show that the allocation puzzle rst identi ed by [Gourinchas and Jeanne, 2009] has a time dimension: in particular it grows less severe over time. The allocation puzzle is the observation that amongst the developing countries, the fastest growers have the highest net capital out ow, contrary to standard economic theory. We show that the severity of these out ows decreases over time, and propose a learning mechanism that matches these facts. We introduce a kalman lter into a standard IRBC model so that consumers must learn about the trend of growth: in this model countries with volatile growth rates, such as developing countries, will initially increase savings leading to a capital out ow, which persists until consumers learn that a higher growth rate has been established. The third essay, empirical in nature, studies the consequences of using the same business cycle lter for developed and developing countries. I calculate the business cycle length for a sample of countries, and nd large di erences in business cycle length across countries. It is still true, on average, the business cycles and GDP is more volatile in developing countries are shorter than those in developed countries, and that GDP volatility has decreased during the Great Moderation, mirroring results of existing literature. The ratio of consumption to output volatility for both country groups are larger than what has been found previously, with developed countries approaching a ratio of 1 instead of being far less than one as previously documented. Previous papers documented that developing and developed countries have counter-cyclical government expenditure, while I nd the counter-cyclicality of government spending remains weak for developing countries, and actually disappears for most developed countries. The exception is the USA, but this is only when one considers the full sample of years. Net exports are strongly counter-cyclical for emerging economics, while for developed economics these are only weakly counter-cyclical.
Description: University of Minnesota Ph.D. disseratation. August 2012. Major: Economics. Advisors: Timothy J. Kehoe. Fabrizio Perri. 1 computer file (PDF); ix, 86 pages, appendices A-C.
URI: http://purl.umn.edu/139100
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