Markets and Markups: Evidence on the Rising Market Power of Exporters from China
Winner of the Emerald Best Paper Award at the 2018 China Finance Review International Conference
Journal of Political Economy: Macroeconomics, Accepted
Markups and Inflation in Oligopolistic Markets: Evidence from
Wholesale Price Data
American Economic Journal: Macroeconomics, Accepted
What Drives Exporters’ Market Dynamics? A New Framework for Disentangling Micro Shocks
Journal of International Economics, 2025
Monetary Policy Transmission amid Demand Reallocations
International Journal of Central Banking, 2025
The Pro-competitive Effects of Trade Agreements
Journal of International Economics, 2024
Invoicing and the Dynamics of Pricing-to-Market:
Evidence from UK Export Prices around the Brexit Referendum
Journal of International Economics, 2022
The Looming Threat of Tariff Hikes: Entry into Exporting under Trade Agreement Renegotiation
AEA: Papers and Proceedings, 2020
Trade Policy Uncertainty and Optimal Monetary Policy
Trade policy uncertainty has become a salient macroeconomic risk, yet its transmission in open economies remains not fully understood analytically. In models with stochastic volatility, uncertainty shocks are higher-order objects that vanish from linearized approximations and are therefore typically studied only numerically. This paper provides an analytical characterization in a small open economy New Keynesian model with export-tariff uncertainty. Under complete markets, the equilibrium collapses to a tractable two-equation nonlinear system in producer-price inflation and the terms of trade, delivering closed-form third-order impulse responses. The solution reveals two opposing Jensen wedges - a New Keynesian Phillips curve (pricing) wedge and an asset-market (inverse-return) wedge - whose net effect on output depends on trade openness and trade elasticity and may change qualitatively depending on price stickiness and the monetary policy rule. Under a mild common-persistence condition, the full uncertainty response admits an exact decomposition into two standard first-order shocks - productivity and risk premium - with time-invariant weights, bridging higher-order and linear analyses. Under the Ramsey-optimal policy, strict stabilization of producer-price inflation is optimal and the divine coincidence extends to tariff uncertainty: allocations are invariant to the volatility state up to third order.
Trade Wars and the Reallocation of Market Power in Global Export Markets
Trade wars do not just reallocate trade flows - they reshape market structure. Tariffs induce foreign exporters to compress price–cost markups or exit destination markets. We develop a multi-country model with Cournot competition and rich production-network linkages spanning both final goods and intermediate inputs. A central innovation is that firms make endogenous market-participation decisions, allowing entry and exit to interact with variable markups under oligopolistic competition. We provide an analytical characterization of this interaction and quantify its implications in general equilibrium. In a U.S.-centered trade war, endogenous exit by foreign exporters substantially amplifies welfare losses relative to a no-exit benchmark. By contrast, when foreign firms reduce markups to remain active, losses are attenuated: U.S. welfare declines fall from 1.52 to 1.26 percent, and Canada’s from 3.0 to 0.4 percent. Production networks further magnify these effects—by roughly a factor of six in our quantitative model.
Payment Innovations and Currency Competition in Trade
When payment innovations such as stablecoins and multilateral CBDC bridges lower cross-border transaction costs, do they entrench dominant currencies or unwind them? We build a multi-country general equilibrium model in which exporters choose an invoicing currency, are paid in it, and fund supplier payments from those receipts. We introduce currency-specific conversion costs that operate through two settlement channels - buyer-side conversion and import-payment funding - alongside the standard pricing motive. The import-payment channel generates strategic complementarity even under constant markups, a mechanism absent from existing invoicing models that rely on variable markups or sticky price input linkages. In a model calibrated to 63 countries, targeted USD cost reductions raise the dollar's global invoicing share by 15 percentage points (from 53% to 68%), while broad reductions lower it by 18 percentage points (to 35%) and nearly triple producer currency invoicing. Payment costs reshape the sticky price channel: with conversion costs, rigidity favors the low-cost vehicle currency; without payment frictions, it favors home currencies.
The Swift Decline of the British Pound: Evidence from UK Trade-invoicing after the Brexit Vote
Using administrative transactions data from the United Kingdom, we document a swift decline in sterling use among British exporters after the 2016 Brexit vote. Through a novel decomposition, we document most of this decline comes from two sources: (i) continuously-operating firms switching from sterling to dollars or local currencies and (ii) reductions in trade volumes and transactions for sterling-loyal firms. We quantify the role of firm and market heterogeneity in driving these changes and document that firms which served markets with more US competitors and used more dollar-invoiced imported inputs were more likely to switch to dollars after the Brexit vote. Altogether, our findings provide the first quantitative evidence on the channels that contribute to changes in aggregate invoicing shares amidst political upheaval.
Dominant Currency Dynamics:
Evidence on Dollar-invoicing from UK Exporters
How do the choices of individual firms contribute to the dominance of a currency in global trade? Using export transactions data from the UK over 2010-2016, we document strong evidence of two mechanisms that promote the use of a dominant currency: (1) prior experience: the probability that a firm invoices its exports to a new market in a dominant currency is increasing in the number of years the firm has used the dominant currency in its existing markets; (2) strategic complementarity: a firm is more likely to invoice its exports in the currency chosen by the majority of its competitors in a foreign destination market in order to stabilize its residual demand in that market. We show that the introduction of a managerial fixed cost of currency management into a model of invoicing currency choice yields dynamic paths of currency choice that match our empirical findings.
The Price Impacts of Trade Agreements
How is Brexit Affecting the Role of Sterling in UK Trade?
Pro-competitive Provisions in Deep Trade Agreements
Will ‘Level Playing Field’ Issues Derail the UK-EU Negotiations?
The Sterling Depreciation and UK Price Competitiveness
The Impact of Brexit Uncertainty on UK Exports
A Granular Analysis of the Exposure of UK Exports to EU Tariffs, Quotas and Antidumping under ‘No Deal’
Renegotiation of Trade Agreements and Firm Exporting Decisions: Evidence from the Impact of Brexit on UK Exports
Firm-level Pass Through: A Machine Learning Approach