Labor Markets, Search Frictions and International Trade: Assessing the China Shock

The goal of this paper is to assess quantitatively the impact that the emergence of China in the international markets during the 1990s had on the U.S. economy (i.e. the so-called China Shock). To do so, I build a model with two sectors producing two final goods, each of them using as the only input...

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Autor principal: Mac Mullen, Marcos
Formato: Objeto de conferencia
Lenguaje:Inglés
Publicado: 2018
Materias:
Ciencias Económicas
China
international markets
Acceso en línea:http://sedici.unlp.edu.ar/handle/10915/165309
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SEDICI (UNLP) de Universidad Nacional de La Plata
id I19-R120-10915-165309
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spelling I19-R120-10915-1653092024-04-25T20:02:00Z http://sedici.unlp.edu.ar/handle/10915/165309 Labor Markets, Search Frictions and International Trade: Assessing the China Shock Mac Mullen, Marcos 2018-11 2018 2024-04-25T15:50:49Z en Ciencias Económicas China international markets The goal of this paper is to assess quantitatively the impact that the emergence of China in the international markets during the 1990s had on the U.S. economy (i.e. the so-called China Shock). To do so, I build a model with two sectors producing two final goods, each of them using as the only input of production an intermediate good specific to each sector. Final goods are produced in a perfectly competitive environment. The intermediate goods are produced in a frictional environment with labor as the only input. First I calibrate the closed economy model to match some salient stylized facts from the 1980s in the U.S. Then to assess the China Shock I introduce a new country (China) in the international scene. I proceed with two calibration strategies: (i) calibrate China such that it matches the variation in the price of imports relative to the price of exports for the U.S. between the average of the 1980s and the average of 2005-2007, (ii) Calibrate China such that variation in allocations are close to the ones observed in data, for the same window of time. I found that under calibration (i) the China Shock in the model explains 26.38% of the variation in the share of employment in the manufacturing sector, 16.28% of the variation in the share of manufacturing production and 27.40% of the variation in the share of wages of the manufacturing sector. Finally, under calibration (ii) I found that the change in relative price needed to match between 80 to 90 percent of the variation in allocations is around 3.47 times the one observed in data. Facultad de Ciencias Económicas Objeto de conferencia Objeto de conferencia http://creativecommons.org/licenses/by-nc-sa/4.0/ Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) application/pdf
institution Universidad Nacional de La Plata
institution_str I-19
repository_str R-120
collection SEDICI (UNLP)
language Inglés
topic Ciencias Económicas
China
international markets
spellingShingle Ciencias Económicas
China
international markets
Mac Mullen, Marcos
Labor Markets, Search Frictions and International Trade: Assessing the China Shock
topic_facet Ciencias Económicas
China
international markets
description The goal of this paper is to assess quantitatively the impact that the emergence of China in the international markets during the 1990s had on the U.S. economy (i.e. the so-called China Shock). To do so, I build a model with two sectors producing two final goods, each of them using as the only input of production an intermediate good specific to each sector. Final goods are produced in a perfectly competitive environment. The intermediate goods are produced in a frictional environment with labor as the only input. First I calibrate the closed economy model to match some salient stylized facts from the 1980s in the U.S. Then to assess the China Shock I introduce a new country (China) in the international scene. I proceed with two calibration strategies: (i) calibrate China such that it matches the variation in the price of imports relative to the price of exports for the U.S. between the average of the 1980s and the average of 2005-2007, (ii) Calibrate China such that variation in allocations are close to the ones observed in data, for the same window of time. I found that under calibration (i) the China Shock in the model explains 26.38% of the variation in the share of employment in the manufacturing sector, 16.28% of the variation in the share of manufacturing production and 27.40% of the variation in the share of wages of the manufacturing sector. Finally, under calibration (ii) I found that the change in relative price needed to match between 80 to 90 percent of the variation in allocations is around 3.47 times the one observed in data.
format Objeto de conferencia
Objeto de conferencia
author Mac Mullen, Marcos
author_facet Mac Mullen, Marcos
author_sort Mac Mullen, Marcos
title Labor Markets, Search Frictions and International Trade: Assessing the China Shock
title_short Labor Markets, Search Frictions and International Trade: Assessing the China Shock
title_full Labor Markets, Search Frictions and International Trade: Assessing the China Shock
title_fullStr Labor Markets, Search Frictions and International Trade: Assessing the China Shock
title_full_unstemmed Labor Markets, Search Frictions and International Trade: Assessing the China Shock
title_sort labor markets, search frictions and international trade: assessing the china shock
publishDate 2018
url http://sedici.unlp.edu.ar/handle/10915/165309
work_keys_str_mv AT macmullenmarcos labormarketssearchfrictionsandinternationaltradeassessingthechinashock
_version_ 1807222776389435392

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