Publications
Growing Like India: The Unequal Effects of Service-Led Growth (with Tianyu Fan and Fabrizio Zilibotti) [Econometrica, Vol 91, No 4, 2023]
In many developing countries, structural transformation takes the form of a rapid rise of services with limited industrialization. Is the rise of services only due to income effects or can growth be service-led? For the case of India, service-led growth was an important driver of rising living standard. However, these gains were heavily skewed toward high-income households living in urban districts.
- Slides
- VoxDev
- I4I column
- Corrigendum
Sprouting Cities: How Rural America Industrialized (with Fabian Eckert and John Juneau) [AEA P&P, Vol. 113, 2023]
Between 1880 to 1940, the US transformed from a largely agrarian to an industrialized economy. The emergence of new cities in Rural America played a big part for this transition.
Market Size and Spatial Growth - Evidence from Germany's Post-War Population Expulsions [Econometrica, Vol 90, No 5, 2022]
The forced settlement of refugees in post-war Germany increased local productivity and triggered the industrialization of rural areas.
- Appendix
- Online Appendix
- Slides
Heterogeneous Markups, Growth and Endogenous Misallocation [Econometrica, Vol 88, No. 5, 2020]
A tractable Schumpeterian model of firm-dynamics with Bertrand competition and endogenous markups. Main theory take-away: creative destruction is pro-competitive because it limits firms’ ability to accumulate market power.
- Appendix
- Online Appendix
- Slides
Lack of Selection and Limits to Delegation: Firm Dynamics in Developing Countries (with Ufuk Akcigit and Harun Alp) [American Economic Review, Vol 111, No. 1, 2021]
Frictions to delegating managerial tasks are a key reason why firms in India do not grow. We discipline our quantitative model with experimental evidence on managerial practices and firm performance.
- Online Appendix
- I4I column
Firm Size, Quality Bias and Import Demand (with Joaquin Blaum and Claire Lelarge) [Journal of International Economics, Vol 120, 2019]
A novel fact: large firms concentrate their import spending on their top trading partners. An explanation: this pattern is consistent with a standard model of importing if firm productivity and input quality are complements and countries differ in their ability to produce high quality inputs.
- Online Appendix
The Gains From Input Trade with Heterogeneous Importers (with Joaquin Blaum and Claire Lelarge) [AEJ Macro, Vol 10, No. 4, 2018]
We derive a simple formula to compute the aggregate effects of input trade if firms differ in their import intensity. Our formula only requires firm-level data on value added and domestic expenditure shares in material spending, is easy to implement, and holds in a variety of settings.
- Online Appendix
- Slides
- VOX column
Creative Destruction, Distance to Frontier, and Economic Development (with Fabrizio Zilibotti) [prepared for "The Economics of Creative Destruction - A Festschrift in honor of Philippe Aghion and Peter Howitt"]
A simple multi-country model of creative destruction with endogenous firm dynamics. In richer economies, firms are on average larger and the best firms grow over time. In poorer economies, there is little creative destruction, and firms remain small. Industrial polices that selectively target productive firms can be beneficial in poor countries while being harmful in countries close to the technological frontier.
Discussion of “The ‘Matthew effect’ and market concentration: Search complementarities and monopsony power” by Fernández-Villaverde, Mandelman, Yu and Zanetti [Journal of Monetary Economics, Vol 121, 2021]
Solutions Manual for: "Introduction to Modern Economic Growth" by D. Acemoglu, Princeton University Press (with Alp Simsek)
In many developing countries, structural transformation takes the form of a rapid rise of services with limited industrialization. Is the rise of services only due to income effects or can growth be service-led? For the case of India, service-led growth was an important driver of rising living standard. However, these gains were heavily skewed toward high-income households living in urban districts.
- Slides
- VoxDev
- I4I column
- Corrigendum
Sprouting Cities: How Rural America Industrialized (with Fabian Eckert and John Juneau) [AEA P&P, Vol. 113, 2023]
Between 1880 to 1940, the US transformed from a largely agrarian to an industrialized economy. The emergence of new cities in Rural America played a big part for this transition.
Market Size and Spatial Growth - Evidence from Germany's Post-War Population Expulsions [Econometrica, Vol 90, No 5, 2022]
The forced settlement of refugees in post-war Germany increased local productivity and triggered the industrialization of rural areas.
- Appendix
- Online Appendix
- Slides
Heterogeneous Markups, Growth and Endogenous Misallocation [Econometrica, Vol 88, No. 5, 2020]
A tractable Schumpeterian model of firm-dynamics with Bertrand competition and endogenous markups. Main theory take-away: creative destruction is pro-competitive because it limits firms’ ability to accumulate market power.
- Appendix
- Online Appendix
- Slides
Lack of Selection and Limits to Delegation: Firm Dynamics in Developing Countries (with Ufuk Akcigit and Harun Alp) [American Economic Review, Vol 111, No. 1, 2021]
Frictions to delegating managerial tasks are a key reason why firms in India do not grow. We discipline our quantitative model with experimental evidence on managerial practices and firm performance.
- Online Appendix
- I4I column
Firm Size, Quality Bias and Import Demand (with Joaquin Blaum and Claire Lelarge) [Journal of International Economics, Vol 120, 2019]
A novel fact: large firms concentrate their import spending on their top trading partners. An explanation: this pattern is consistent with a standard model of importing if firm productivity and input quality are complements and countries differ in their ability to produce high quality inputs.
- Online Appendix
The Gains From Input Trade with Heterogeneous Importers (with Joaquin Blaum and Claire Lelarge) [AEJ Macro, Vol 10, No. 4, 2018]
We derive a simple formula to compute the aggregate effects of input trade if firms differ in their import intensity. Our formula only requires firm-level data on value added and domestic expenditure shares in material spending, is easy to implement, and holds in a variety of settings.
- Online Appendix
- Slides
- VOX column
Creative Destruction, Distance to Frontier, and Economic Development (with Fabrizio Zilibotti) [prepared for "The Economics of Creative Destruction - A Festschrift in honor of Philippe Aghion and Peter Howitt"]
A simple multi-country model of creative destruction with endogenous firm dynamics. In richer economies, firms are on average larger and the best firms grow over time. In poorer economies, there is little creative destruction, and firms remain small. Industrial polices that selectively target productive firms can be beneficial in poor countries while being harmful in countries close to the technological frontier.
Discussion of “The ‘Matthew effect’ and market concentration: Search complementarities and monopsony power” by Fernández-Villaverde, Mandelman, Yu and Zanetti [Journal of Monetary Economics, Vol 121, 2021]
Solutions Manual for: "Introduction to Modern Economic Growth" by D. Acemoglu, Princeton University Press (with Alp Simsek)
Working Papers
Population Growth and Firm-Product Dynamics (with Conor Walsh) [accepted, JPE Macro]
Should we be concerned about the secular trend of falling population growth? Yes. We propose a tractable model of firm-based growth and show that declining fertility leads to falling creative destruction, rising concentration, larger firms, less entry and lower growth. For the US case, the observed and projected demographic changes go a long way to rationalize what we have seen since 1980.
- Appendix
- Online Appendix
- Slides
Spatial Structural Change (with Fabian Eckert)
Between 1880 and 1920, the US agricultural employment share halved from 50% to 25%. Yet, despite this demise of the agricultural sector, growth was rural biased: agricultural locations saw both faster wage growth and industrialization. We show that spatial technology diffusion and catch-up growth played a key role for this pattern.
- Appendix
- Slides
- A Crosswalk for US Spatial Data 1790 - 2000: pdf; Website with codes
Spatial Firm Sorting and Local Monopsony Power (with Ilse Lindenlaub and Ryungha Oh) [submitted]
High-wage locations have substantially lower labor shares and higher wage dispersion. These facts are readily implied by a parsimonious model of firm sorting, where monopsony power stems from search frictions and“superstar” firms sort into productive locations. Why? Positive sorting leads to steeper wage ladders and hence higher inequality. At the same time, it reduces local labor shares because productive firms have more monopsony power.
- Appendix
- Online Appendix
From Rural Fields to Urban Kitchens: Structural Change and the Decline of Women's Work In India (with Pam Torola, Lindsey Uniat, and Fabrizio Zilibotti)
Female labor force participation in Indian cities is very low. Why? Higher spousal incomes reduce labor supply through income effects and labor market distortions depress women's urban wages.
A Theory of Endogenous Degrowth and Environmental Sustainability (with Philippe Aghion, Timo Boppart, Matt Schwartzman, and Fabrizio Zilibotti)
Do we have to choose between economic growth and environmental damages? Not necessarily. By shifting innovation toward quality growth instead of quantity growth, clean growth is possible. Structural change toward services helps in that endeavor.
High Frequency Mobility in Three African Countries (with Paul Blanchard, Douglas Gollin, and Martina Kirchberger)
Using high-frequency cell-phone data from users in Kenya, Tanzania, and Nigeria, we document that residents from rural areas and small towns routinely travel to the largest cities to frequent stores, restaurants, and cultural venues. Such "consumption trips" make non-tradable services tradable. A simple theory highlights that urban residents are the main beneficiaries of this novel form of trade because rural visitors create additional demand.
Should we be concerned about the secular trend of falling population growth? Yes. We propose a tractable model of firm-based growth and show that declining fertility leads to falling creative destruction, rising concentration, larger firms, less entry and lower growth. For the US case, the observed and projected demographic changes go a long way to rationalize what we have seen since 1980.
- Appendix
- Online Appendix
- Slides
Spatial Structural Change (with Fabian Eckert)
Between 1880 and 1920, the US agricultural employment share halved from 50% to 25%. Yet, despite this demise of the agricultural sector, growth was rural biased: agricultural locations saw both faster wage growth and industrialization. We show that spatial technology diffusion and catch-up growth played a key role for this pattern.
- Appendix
- Slides
- A Crosswalk for US Spatial Data 1790 - 2000: pdf; Website with codes
Spatial Firm Sorting and Local Monopsony Power (with Ilse Lindenlaub and Ryungha Oh) [submitted]
High-wage locations have substantially lower labor shares and higher wage dispersion. These facts are readily implied by a parsimonious model of firm sorting, where monopsony power stems from search frictions and“superstar” firms sort into productive locations. Why? Positive sorting leads to steeper wage ladders and hence higher inequality. At the same time, it reduces local labor shares because productive firms have more monopsony power.
- Appendix
- Online Appendix
From Rural Fields to Urban Kitchens: Structural Change and the Decline of Women's Work In India (with Pam Torola, Lindsey Uniat, and Fabrizio Zilibotti)
Female labor force participation in Indian cities is very low. Why? Higher spousal incomes reduce labor supply through income effects and labor market distortions depress women's urban wages.
A Theory of Endogenous Degrowth and Environmental Sustainability (with Philippe Aghion, Timo Boppart, Matt Schwartzman, and Fabrizio Zilibotti)
Do we have to choose between economic growth and environmental damages? Not necessarily. By shifting innovation toward quality growth instead of quantity growth, clean growth is possible. Structural change toward services helps in that endeavor.
High Frequency Mobility in Three African Countries (with Paul Blanchard, Douglas Gollin, and Martina Kirchberger)
Using high-frequency cell-phone data from users in Kenya, Tanzania, and Nigeria, we document that residents from rural areas and small towns routinely travel to the largest cities to frequent stores, restaurants, and cultural venues. Such "consumption trips" make non-tradable services tradable. A simple theory highlights that urban residents are the main beneficiaries of this novel form of trade because rural visitors create additional demand.
Work in Progress
Immigration, Innovation, and Spatial Economic Development: Theory and Evidence from the Age of Mass Migration (with Costas Arkolakis and Sun Kyoung Lee)
- Slides
Technology Adoption and the Big Pull (with Jesse Perla)
- Slides
Technology Adoption and the Big Pull (with Jesse Perla)
