Ana Cecilia Fieler | Ph.D. Candidate

“Non-Homotheticity and Bilateral Trade: Evidence and a Quantitative Explanation”
Econometrica, 79(4), p. 1069-1101, July 2011, appendix, program and data files

"Trade, Quality Upgrading, and Input Linkages: A Theory with Evidence from Colombia," with Marcela Eslava and Daniel Yi Xu, September 2016, appendix, revise and resubmit at American Economic Review

"(Indirect) Input Linkages" American Economic Review: Papers & Proceedings, 105(5), p. 662-666, 2015

"Gravity of Unit Values" with Jonathan Eaton (draft coming soon)

Within finely-defined product categories, rich countries import and export varieties at higher unit prices. While these patterns suggest that rich and poor countries consume and produce different goods, we argue that unit prices are not informative about how income per capita influences the welfare effects of international trade shocks.  The standard explanation for patterns of unit prices uses only one dimension of quality: Rich importers buy more expensive higher-quality goods, and rich exporters specialize in these goods. We show that this argument cannot explain the data—not even qualitatively. We develop a model with two dimensions of quality: One that is disproportionately valued by rich consumers, and one that is equally valued by everyone. The model explains data on unit prices very well, and it delivers a gravity equation for trade flows so that the welfare effects of foreign shocks follow Arkolakis, Costinot, Rodriguez-Clare (2012). Model parameters are recovered from data through simple OLS regressions.

We present two extensions of the model. First, we allow for per-unit trade cost to rationalize the increasing relationship between unit prices and distance. Second, the model remains tractable when we introduce heterogeneity across sectors in the relationship between unit prices, and importer and exporter per capita income.

"Home-Market Effects on Innovation" with Justin Caron and Thibault Fally
(draft coming soon)

We estimate the home-market effect and study its implications for inequality within and across countries. The home-market effect occurs when exogenous differences in demand across countries generate endogenous differences in comparative advantages through technical change that is specific to a country and sector. Estimating it has proved difficult because econometricians do not observe differences in demand. They observe only expenditures, which depends on supply through prices. Our solution is to exploit non-homotheticity in preferences to construct instruments for the location of production, which determines comparative advantage through the home-market effect.

Motivated by data, the model features factor-biased technologies and imperfect technology diffusion.  Consistent with data, income-elastic goods in the model are endogenously more skill intensive within countries.

Home-market effects generate across-country inequalities because countries differ in their access to larger, richer markets. They generate within-country inequalities through skill-biased technical change. We use counterfactual simulations using the estimated model to evaluate the effects of trade and technology diffusion on inequalities.

"Escaping Import Competition and Gains from Trade through Backward Linkages" with Ann Harrison

We study the effects of import competition on Chinese firms, when China decreased its trade barriers upon entry in the WTO. When quality is not observed, standard measures of productivity confound changes in quality with changes in markups. We present a model where import competition increases investments in product differentiation but has an ambiguous effect on measured productivity: The increase in product differentiation pushes measured productivity up, but the decrease in markups pushes it downward. Consistent with the model, evidence of investment in product differentiation appears in (i) the measured productivity of input suppliers, (ii) patent applications, and (iii) skill intensity of firms switching sectors. 

"Growth and Product Cycles" with Gustavo Camilo

We propose propose a Schumpeterian model of economic growth where sector-specific innovations lead firms and workers to reallocate across sectors. The model features constant aggregate growth, and it is able to replicate novel data facts about heterogeneous growth in value added, number of firms, and number of workers across sectors. At the micro-level, the model generates product cycles documented by Gort, Klepper (1982) and Klepper (1996).

Older papers & other publications

“Mapping the Match between UK Exports and Demand in Emerging Markets: Final Report for the Asia Task Force”, joint with Jonathan Eaton and Ana Maria Santacreu, a report prepared for the United Kingdom Trade & Investment ( UK government organization)

“Quality Differentiation in International Trade: Theory and Evidence” working paper, 2012, appendix

“Models of Repeated Partnership with Limited Information” mimeo, 2004

Copyright 2007 Ana Cecilia Fieler. Site by CM.