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Jonathan Dingel, University of Chicago, Booth

Monday, February 26, 2018 -
12:30pm to 2:00pm
415 Rafik B. Hariri Building, McDonough School of Business

Presenter: Jonathan Dingel
Paper:  The Spatial Structure of Endowments, Trade, and Inequality: Evidence from the Global Climate

Abstract: This paper shows that welfare inequality in a trading network is greater when productivities are rearranged such that neighboring locations are more similar. An increase in the spatial correlation of productivities amplifies cross-country welfare dispersion by increasing the correlation between productivity and the gains from trade. To empirically examine this prediction, we study how global agricultural trade responds to exogenous changes in the spatial correlation of agricultural productivity driven by a naturally occurring global climatic phenomenon. As predicted, higher spatial correlation in cereal yields increases the correlation between productivity and the gains from trade. In a forecasting application, climate-change projections for 2099 that incorporate this general-equilibrium effect exhibit substantially greater global welfare inequality, with higher welfare losses across most of Africa. 


The International Economics Seminar series is presented jointly with the Walsh School of Foreign Service and the Economics Department of Georgetown University.