I am an assistant professor in the Economics Department at the University of Oslo and a researcher in the Macroeconomics Group at Statistics Norway. My research interests include topics in international macro, trade, finance, and migration.
Exporting not only provides firms with profit opportunities, but can also provide for risk diversification if is demand is stochastic and shocks are imperfectly correlated across countries. I develop a general equilibrium trade model, with risk-averse investors and complete asset markets, to show 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. The model yields a risk-augmented gravity equation, predicting that, conditional on trade costs and market size, exporters sell smaller quantities to countries whose shocks contribute more to aggregate volatility. I estimate the risk-augmented gravity equation using thirty years of data on trade flows and find support for the model's prediction. A counterfactual experiment shows that demand-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] [Latest version] 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. [VoxEU][CEPR Discussion Paper No. 14193][PDF] Reject&Resubmit at The AER.
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] under review.
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), Revitalising Multilateralism: Pragmatic Ideas for the New WTO Director-General, a VoxEU.org eBook, CEPR Press, 2020. [Link]
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]