The Consequences of U.S. Technology Changes for Productivity in Advanced Economies, joint with Steffen Elstner

Macroeconomic Dynamics, forthcoming

Ruhr Economic Papers No. 796, RWI (February, 2019)

Working papers

What Are the Effects of Technology Shocks on International Labor Markets? (Ruhr Economic Papers No. 806, RWI, April 2019).

Abstract: How do international labor markets respond to a technology shock and what is the main transmission channel across countries with different labor market institutions? To answer these questions, I identify technology shocks using the approach of Galí (1999) and decompose the responses of total hours worked into movements along the extensive and the intensive margins. Overall, my analysis shows that technology shocks have a negative effect on total hours. This effect is stronger in countries with flexible labor markets, where the adjustment takes place along both margins. In contrast, the responses of total hours are smaller in countries with strict labor market legislation, where labor adjustment takes place along the intensive margin. These differences can be linked to the strictness of institutions that target quantity and price adjustments in the labor market.

Presented at the: 5th Conference of the International Association for Applied Econometrics (Montreal, 2018), 22nd International Conference on Macroeconomic Analysis and International Finance (Rethymno, 2018), 11th RGS Doctoral Conference in Economics (Essen, 2018), Loire Valley Institute of Advanced Studies and Orléans Economics Center: "Globalization and Growth in Eurozone: New Challenges" (Orléans, 2017), RWI Brown Bag Seminar (Essen, 2017), Annual Conference of the European Economics and Finance Society (Ljubljana, 2017).

Growth Prospects and the Trade Balance in Advanced Economies, joint with Ansgar Belke & Steffen Elstner

Latest Version (July, 2020), R&R, Oxford Bulletin of Economics and Statistics

Ruhr Economic Papers No. 827, RWI (February, 2020)

Abstract: Does an improvement in growth prospects lead to a fall in the trade balance? The answer in the literature with a strong focus on the U.S. economy is yes. However, we do not find that improved growth prospects (news shocks) necessarily lead to negative trade balance effects in the G7 countries. We develop a novel news shocks identification scheme, apply it to country-level vector autoregressions (VARs), and obtain the following results. While in the U.S. and Germany, news shocks induce a deterioration of the trade balance, in other G7 countries, news shocks have positive trade balance effects. The differences in the trade balance effects across the G7 countries are mainly due to heterogeneous reactions of exchange rates, labor markets, wealth effects, and monetary policy. Therefore, policy recommendations aimed at reducing the trade imbalances through productivity-enhancing reforms in advanced economies might not entail the targeted effects.

Presented at the: Deutsche Bundesbank's In-house Research Workshop, 28th Annual Virtual Symposium of the Society for Nonlinear Dynamics and Econometrics 2020, 35th Annual Congress of the European Economic Association (EEA Virtual 2020), 29th Meeting of the Midwest Econometrics Group (Columbus (OH), 2019).