Structural Change and Global Trade
Time：10:30am - 12:00pm, June 19, 2019
Venue：Room 359S, Overseas Exchange Center, Peking University
(Senior economist and research advisor on the macroeconomics team in the research department at the Federal Reserve Bank of Chicago)
Services, which are less traded than goods, rose from 58 percent of world expenditure in 1970 to 79 percent in 2015. In a trade model featuring nonhomothetic preferences and input-output linkages, we find that such structural change has restrained the growth in world trade to GDP by 15 percentage points over this period. This is about half the magnitude that declining trade costs have boosted openness. Moreover, structural change dampens the measured gains from trade by incorporating endogenous responses of expenditure shares to the trade regime. Ongoing structural change implies declining openness, even absent rising protectionism. In the face of continued structural change, high-income countries stand to gain more from trade liberalization in services rather than in goods, and low-income countries, the opposite.
Jing Zhang is a senior economist and research advisor on the macroeconomics team in the research department at the Federal Reserve Bank of Chicago. Her research focuses a variety of topics in international economics and macroeconomics, including international financial market frictions, currency and financial crisis, international capital flows, international risk-sharing, sovereign debt and sovereign defaults, fiscal policy in open economies, structural change in an open economy, the evolution and impact of global comparative advantage, household portfolio rebalancing in a general equilibrium, firm financing and growth dynamics and adverse selection in labor markets. Her research has appeared in Econometrica, the Journal of Monetary Economics, the Journal of International Economics, American Economic Journal: Macroeconomics, the European Economics Review, the IMF Economic Review and Economic Policy. She serves as an associate editor at the Journal of Economic Dynamics and Control. Prior to joining the department in 2013, Zhang was an assistant professor of economics at the University of Michigan. Zhang received her Ph.D. in economics from the University of Minnesota.