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SUMMARY:PASS-THROUGH AND FIRM BEHAVIOUR IN GENERALISED ECONOMIC MODELS WIT
 H AN APPLICATION TO THE TRADE COST PUZZLE OF INTERNATIONAL TRADE - Michal 
 Fabinger\, Assistant Professor of Economics\, University of Tokyo
DTSTART:20190312T123000Z
DTEND:20190312T140000Z
UID:TALK120922@talks.cam.ac.uk
CONTACT:Emily Brown
DESCRIPTION:The theme of this talk is avoiding restrictive assumptions in 
 economic modeling without sacrificing tractability. The first part of the 
 talk is based on work with Takanori Adachi (Multidimensional Pass-Through 
 and Welfare Measures under Oligopoly). It provides a substantial generalis
 ation of the pass-through framework of Weyl & Fabinger (JPE 2013). We show
  how to incorporate arbitrary types of taxation and/or interventions\, as 
 well as firm heterogeneity\, while keeping the economic relationships simp
 le and transparent. \n\n\n\nThe second part of the talk is based on work w
 ith Glen Weyl (Functional Forms for Tractable Economic Models and the Cost
  Structure of International Trade). We show how to obtain closed-form solu
 tions to economic models while relaxing assumptions such as constant-elast
 icity demand or constant marginal cost. We use these techniques to gain nu
 merical tractability within a large-scale\, computationally intensive mode
 l of global trade flows. Our results provide a solution to the long-standi
 ng trade cost puzzle of international trade: we can explain the observed r
 apid falloff of trade with distance without an unrealistically strong dist
 ance-dependence of trade costs. 
LOCATION:Castle Teaching Room\, Cambridge Judge Business School
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