Trade Day: Schedule for Felix Tintelnot

Demand Shocks to a Production Network: Firm Responses and Worker Impacts

    Date:  04/28/2022 (Thu)

    Time:  3:15pm- 4:45pm

    Location:  Seminar will be held on-site: 113 Soc Sci

    Organizer:  Rafael Dix Carneiro

Meeting Schedule: Login or email the organizer to schedule a meeting.

    All meetings will be held in the same location as the seminar unless otherwise noted.

    9:00am - Rafael Dix-Carneiro

    9:30am - Andrew Greenland

   10:00am - Daniel Yi Xu

   10:30am - Sung-Ju Wu

   11:00am - Xian Jiang

   11:30am - Seminar Pol Antras (11.45am to 1pm)

   12:00pm - Global Sourcing and Multinational Activity: A Unified Approach

    1:00pm - Reserved for Lunch

    1:30pm - Reserved for Lunch

    2:00pm - Nurullah Gulec

    2:30pm - David Shin

    3:15pm - Seminar Presentation (3:15pm to 4:45pm)

    3:30pm - Demand Shocks to a Production Network: Firm Responses and Worker Impacts

    5:00pm - Laura Castillo-Martinez

    Additional Comments:  Abstract: We analyze how changes in firm output–induced by exogenous changes in foreign demand–affect wages, employment, and the sourcing of inputs from the domestic production network. We find that, on average, the response of input purchases is larger and more instantaneous than that of labor costs. The elasticity of input purchases differs according to the providing sector, which allows us to characterize what fraction of goods or services that a sector provides is used for fixed inputs and what fraction is used for variable inputs. We also find that firm-level wages of both direct and indirect exporters respond to firm-specific demand shocks. We then examine how accounting for the presence and degree of fixed costs and imperfect competition in the labor market affect the propagation of demand or supply shocks. Our counterfactual analysis shows that adjusting the input-output matrix to account for fixed inputs leads to substantially larger welfare losses from tariffs or negative foreign demand shocks. Co-authors: Emmanuel Dhyne, Ken Kikkawa, Toshiaki Komatsu, Magne Mogstad