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 provides firms not only with profit opportunities, but can also provide for risk diversification if demand is imperfectly correlated across countries. This paper shows that the correlation structure of shocks across countries constitutes a hitherto unexplored source of comparative advantage that shapes trade patterns and persists even if financial markets are perfect. 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 cost 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 5% of global trade. Country-level exports would grow by -19% to +13% if all diversification opportunities were eliminated, entailing welfare losses in the range of 4% to 26%. [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]