Essays on Regional and International Economics PDF Download

Author: Akira Sasahara
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ISBN: 9780355150629
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Languages : en
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Book Description
This thesis is a collection of three of my papers during my Ph.D. studies. The goal of this thesis is to improve our understanding on regional economics (the first and second chapters) and international economics (the third chapter). The three chapters aim to make theoretical and empirical contributions to the ongoing research. In the first chapter, I propose a model with multiple cities that allows inter-city interactions through costly trade, internal migrations, and firm relocation. The model is guided by the empirical observation that educated workers, larger firms, and skill-intensive and high-wage sectors are concentrated in larger cities. As a result, the model features multiple sectors, heterogeneous firms, and heterogeneous workers. The comparative statics of the model focuses on three shocks: falling transport costs, declining education costs, and increasing high-skill intensities. I show that: (i) there is a non-monotonic relationship between transport costs and the spatial income inequality; (ii) a structural transformation triggered by declining education costs reduces the inequality, (iii) the one due to a skill-biased technological change, however, predicts the opposite. The theoretical predictions are confirmed by a panel regression using the data from 32 countries with 1,962 regions. The second chapter investigates the impact of rising temperatures on internal migrations by exploiting historical variations in migrations and temperatures during three decades, 1970-2000. We find that, while internal migrations are mainly determined by economic factors such as income differentials and the degree of urbanization of locations, changes in temperatures also have a significant impact on internal migrations. The result from the location-level dataset suggests that an increase in temperatures induces migrations from poorer locations to richer locations within lower-middle-income countries, and it reduces migrations in poor countries but in a non-systematic way unlike lower-middle income countries. Then we aggregate the dataset at the country-level and find that an increase in temperature reduces the aggregate internal migrations in poor countries while it increases in lower-middle-income countries. These results are consistent with a Roy model with migration costs and suggest that rising temperatures have very different implications depending upon income-levels of countries. The third chapter examines the impact of debt restructurings on trade flows, allowing heterogeneous reactions to restructurings by types of restructurings: post-default and (strictly and weakly) preemptive. Sovereign debt restructurings can be implemented prior to a payment default and the previous work finds that preemptive restructurings lead to lower output losses while post-default restructurings are harmful (Asonuma and Trebesch, 2016). We investigate if there is a similar impact on trade flows. The paper examines dynamic responses of trade to debt restructurings by estimating the local projections. We find that post-default restructurings reduce import values by 8% and the negative effect is persistent until four years after a starting year of restructurings. The impact of post-default restructurings on export values is also negative and they reduce export values by 20% five years after a starting year of restructurings. On the other hand, we do not find a strong evidence that (weakly and strictly) preemptive restructuring reduce trade flows.