I am an assistant professor in the Economics Department at the University of Oslo. My research interests include topics in international trade, international finance, and migration.
Exporting not only provides firms with profit opportunities, but can also provide for risk diversification if demand is imperfectly correlated across countries. This paper shows that the correlation pattern of demand shocks across countries constitutes a hitherto unexplored source of comparative advantage that shapes trade flows and persists even if financial markets are complete. With exporters making market-specific choices under uncertainty, countries whose shocks are riskier, in the sense that they contribute more to aggregate volatility, are less attractive destinations for both investment and exports. A gravity-type regression lends support to the hypothesis that, conditional on trade costs and market size, exporters sell smaller quantities in riskier destinations. I develop a general equilibrium trade model, with risk-averse investors and complete asset markets, which rationalizes this novel fact. A counterfactual experiment shows that risk-based comparative advantage accounts for 4.6% of global trade. Country-level exports would grow by -13% to +10% if all diversification opportunities were eliminated, entailing welfare losses in the range of .4% to 16%. [CEPR Discussion Paper No. 14230] [PDF] under review
This paper examines the structure of the shipping network and its implications on global trade and welfare. Using novel data on the movements of container ships, we calculate optimal travel routes. We then estimate the impact of a shock to the network on global trade by means of a natural experiment: the 2016 Panama Canal expansion. Trade between country pairs using the canal increased by 9-10% after the expansion. While the building costs were borne by Panama alone, a model-based quantification shows that the welfare gains were shared by many countries, due to the network structure of shipping. [VOX.eu][CEPR Discussion Paper No. 14193][PDF] under review
We analyze the welfare effects of trade and migration, focusing on two-sided horizontal heterogeneity among workers and firms. We prove the existence of a unique symmetric equilibrium in a two stage game of firm entry (including choice of skill-types) and pricing, involving monopsony power on the labor market and endogenous goods price markups. Trade increases wage markups and worsens the average quality worker-firm matches as well as raising within-firm wage inequality. In contrast, migration lowers wage markups and tends to improve the average matching quality. Our model advocates opening up labor markets simultaneously with trade liberalization. [CESifo Working Paper No. 7355, 2018]
Jahrbücher für Nationalökonomie und Statistik / Journal of Economics and Statistics, 236(6), 2016, 639–664. [ifo Working Paper No. 220, 2016]
International Economics and Economic Policy, forthcoming. [CESifo Working Paper No. 5176, 2015]
in Baldwin, R. E. and S. J. Evenett (eds), COVID-19 and Trade Policy: Why Turning Inward Won’t Work, a VoxEU.org eBook, CEPR Press, 2020. [Link]
ifo Beiträge zur Wirtschaftsforschung 74, ifo Institute, 2017. [PDF]