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.
Firms facing uncertain demand at the time of production expose their shareholders to volatile returns. Risk-averse investors trading multiple assets will favor stocks that tend to yield high returns in bad times, that is, when the marginal utility of consumption is high. In this paper, I develop a firm-level gravity model of trade with risk-averse investors to show that firms seeking to maximize their present value will take into account that shareholders discount expected profits depending on the correlation with their expected marginal utility of consumption. The model predicts that, ceteris paribus, firms sell more to markets where profits covary less with the income of their investors. This holds true even in the presence of complete and internationally integrated financial markets. To test the model's prediction, I use data on stock returns to estimate covariances between demand growth in export markets and expected marginal utility growth of investors in 21 countries. I then show that the covariance pattern is reflected in the pattern of these countries' exports across destination markets and time within narrowly defined product-level categories, as predicted by the model. I conclude that by maximizing shareholder value, exporters are actively engaged in global risk sharing. [PDF]
Container ships are the engines of global trade. In this paper, we use satellite data revealing the worldwide movements of all container ships to calculate the optimal travel routes of containerized goods. Few countries have direct shipping connections to their trade partners. An implication is that trade between two countries is determined by trade costs to and from third countries. We estimate the impact of local shocks to the shipping network on global trade by means of a natural experiment: the Panama Canal expansion in 2016. Based on a difference-in-difference estimation, we find that the trade between country pairs whose fastest shipping routes passes through the Panama Canal increased by 9-10% after the expansion. We quantify the trade and welfare effects of the shock using a canonical Ricardian model of trade. The expansion increased world real income by USD 20 billion, and the gains per capita were concentrated among Central American countries which use the canal intensively. The results highlight the importance of trade networks for the quantification of the gains from trade. [PDF]
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]
ifo Beiträge zur Wirtschaftsforschung 74, ifo Institute, 2017. [PDF]