“The Short and Long-Run Effects of International Environmental Agreements on Trade" (with Josh Ederington and Maurizio Zanardi) Journal of International Economics, 2022, (139):103685
Does the ratification of an international environmental agreement (IEA) reduce a country's competitiveness on world markets? In this paper, we take a gravity regression approach to answering this question by using industry-level bilateral trade data and employing time-varying country fixed effects to control for the endogeneity of treaty participation. Based on sample of 200+ countries and over 40-years, we find that ratifying an IEA results in a significant compositional shift towards exporting cleaner and importing dirtier manufacturing goods. In addition, we find significant lagged effects to ratifying the Kyoto Protocol as the compositional shift towards exporting cleaner goods becomes even stronger in the long run. However, we find little evidence that the ratification of IEAs contributed to an overall decline in manufacturing exports as we uncover only small and insignificant effects of IEAs ratification on the median-polluting manufacturing industry.
"The Good News and Bad News About International Environmental Agreements" (with Josh Ederington and Maurizio Zanardi) VoxEU.org, 2022, 11 November
"The Effect of Bilateral Labor Agreements on Trade" (with Anna Maximova) Journal of Economic Integration, 2022, 37(4):649-704
The period following the end of World War II is marked by higher degrees of international cooperation aimed, among others, at promoting economic integration. As part of these efforts, national governments adopted policies to remove/reduce barriers that hindered the exchange of goods and, later, services as well as the movement of capital and labor. While the effect of international trade and investment treaties on trade has been thoroughly documented, the potential impact of bilateral labor agreements (BLAs) on commerce flows has received little to no attention. This paper uses a novel dataset of (BLAs) within a gravity framework and finds that, over a five-year period since signature, BLAs have positive and significant effects on aggregate exports and on exports of differentiated goods (i.e., miscellaneous manufactured goods and chemicals).
"The Effect of Bilateral Labor Agreements on the Margins of Trade" (with Anna Maximova)
Despite the post-World War II proliferation of bilateral labor agreements (BLAs), their effect on trade has received little attention. This paper combines a novel BLAs dataset with trade data for 207 exporters and importers between 1962 and 2018 and, in a gravity framework, finds that BLAs have positive and significant effects on aggregate exports over a five-year period since signature (i.e., 7\%). Further evidence suggests that the BLAs' trade-promotion effects unfold primarily along the intensive margin, especially within sectors that are characterized by product differentiation. Together, these results suggest that BLAs necessarily lower the variable transaction costs.
“Uncovering the Link Between International Environmental Agreements and Emissions" (with Josh Ederington and Maurizio Zanardi) Working Paper
Previous studies emphasize a clear connection between the ratification of International Environmental Agreements (IEAs) and a decline in emissions within the ratifying nation. However, the channels through which IEAs affect emissions are less clear. We seek to shed light on this matter by investigating whether IEAs reduce emissions through a decline in economic activity (scale effect), a shift towards less-polluting sectors (composition effect), or a reduction in sectoral pollution intensity (technique effect). While we find little to no evidence of IEA scale and compositional effects, we do uncover strong evidence in favor of the technique effect. We then proceed by dissecting the technique effect. In doing so we find that IEAs lead to a decline in sector-level energy intensity (amount of energy used to generate \$1,000 of value added) and a change in the energy mix (increased use of petroleum products and less use of coal, crude, and gases).
"Economic Integration and Bilateral Export Concentration: The Euro Effect" Working Paper
A common finding in the international trade literature is that economic integration leads to export diversification. By documenting a positive link between adopting the European common currency and bilateral export concentration, the current work shows that this is not always the case. Using a panel data approach, I find that exports between eurozone members are on average more concentrated than those among countries which do not share the euro. Central to this outcome is that some economic integration agreements, such as the European Economic and Monetary Union, may lead to a drop in not only trade but horizontal FDI costs as well. Theoretically, the results can be explained by the substitutability between exporting and horizontal FDI within a two-sector, two-firm type model which allows for sectoral trade cost heterogeneity.
"The Kyoto Protocol and the Carbon Content of Bilateral Export Flows" Working Paper
This study adds to the literature on the Kyoto protocol and the carbon content of bilateral trade. It does so by analyzing the effect of ratifying the Kyoto protocol on exports, the carbon dioxide (CO2) intensity of exports, and the CO2 emissions embodied in exports within a novel dataset of 149 countries observed between 1995-2012. For parties that took on binding emission caps, the ratification of Kyoto protocol leads to (i) lower CO2 emissions embodied in exports, (ii) lower CO2 emission intensities, but (iii) higher overall exports. For the same group of countries, a year-by-year analysis underlines a permanent decline in both the CO2 emission intensities and the CO2 content of exports that is attributable to the Kyoto ratification. Furthermore, this analysis also points out to a short-run decline in exports. In the long run, however, exports are found to recover. Also, the commitment type or whether a party was designated as a transition economy at the time of ratification are found to shape the above three outcomes.
This study adds to the literature on the Kyoto protocol and the carbon content of bilateral trade. It does so by analyzing the effect of ratifying the Kyoto protocol on exports, the carbon dioxide (CO2) intensity of exports, and the CO2 emissions embodied in exports within a novel dataset of 149 countries observed between 1995-2012. For parties that took on binding emission caps, the ratification of Kyoto protocol leads to (i) lower CO2 emissions embodied in exports, (ii) lower CO2 emission intensities, but (iii) higher overall exports. For the same group of countries, a year-by-year analysis underlines a permanent decline in both the CO2 emission intensities and the CO2 content of exports that is attributable to the Kyoto ratification. Furthermore, this analysis also points out to a short-run decline in exports. In the long run, however, exports are found to recover. Also, the commitment type or whether a party was designated as a transition economy at the time of ratification are found to shape the above three outcomes.
"A Stroll Down the Dollar Street: Teaching Per-Capita GDP Using Internationally-Comparable Photographs" (with Steve M. Muchiri, and Anna Maximova) Journal of Economics Teaching, 2023, 8(2):87-113
We propose an activity that draws on over 44,000 internationally comparable photographs (of households and their living conditions) that help students connect cross-country differences in real per-capita GDP with differences in living conditions. First, students virtually visit approximately twenty households across five countries (four of their choice and the United States) and document their living conditions. Second, students collect real GDP per capita data for these countries, compare it, and link it to the observed differences in living conditions. Ultimately, this process allows the students to understand how differences in real GDP per capita relate to the differences in living conditions and learn some of the advantages and disadvantages of using real per-capita GDP to measure living conditions.
"Teaching Economics with Breaking Bad" (with Steve M. Muchiri, and Jadrian Wooten) Journal of Economics Teaching, 2022, 7(1):74-91
The paper builds on the existing literature, to expand the stock of “chalk-and-talk” alternatives and reduce the cost of implementing such alternatives. Specifically, the paper proposes three lesson plans, which are based on a series of Breaking Bad scenes identified in Duncan et al. (2020) and featured as part of the associated online companion, BreakingBadEcon.com. The lesson plans rely on the economic content within the scenes to introduce and emphasize a notable array of microeconomic concepts while also facilitating the assessment of concept comprehension and student learning.
"The Economics of Breaking Bad" (with Daniel F. Duncan and Steve M. Muchiri) Journal of Economics and Finance Education, 2019, 18(2):15-42
Following the recent trend toward new pedagogical methods aimed at connecting with today’s economics students, we explore the economic principles which can be taught using the popular Breaking Bad television series. We perform an exhaustive examination of the entire series and document precise instances that can be used to convey important economic principles in the microeconomics curriculum. Breaking Bad provides the instructor with the opportunity to teach economic concepts using material that appeals to student’s affinity for all things pop culture and includes interesting subject matter such as drugs and crime. We view the combination of interesting subject material and the use of video clips in the classroom as a way to foster an active learning environment in our economics courses.
"Where do Rebounds Go? Using Rubber Balls to Teach Price Elasticity" (with Steve M. Muchiri) Journal of Economics Teaching, 2019, 4(2):60-75
Motivation and interest are important determinants of academic performance (Becker, 1997). Nevertheless, engaging and motivating students involves presenting the material in an active and inclusive way. To facilitate this, the current paper develops an in-class activity that simplifies the process of introducing one of the core, most important, and yet least-understood concepts in introductory economics: price elasticity. It does so by relating the otherwise-abstract concept to the basic and familiar image of a bouncing ball. Specifically, we use a ball’s bounce upon being dropped against the floor to visually demonstrate the quantity’s response to a change in the price of a good or service.