Essays in macroeconomics and international trade

Ryzhenkov, Mykola

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URN:	urn:nbn:de:bsz:180-madoc-648933
Dokumenttyp:	Dissertation
Erscheinungsjahr:	2023
Ort der Veröffentlichung:	Universität Mannheim
Hochschule:	Universität Mannheim
Gutachter:	Gulyas, Andreas
Datum der mündl. Prüfung:	2 Juni 2023
Sprache der Veröffentlichung:	Englisch
Einrichtung:	Außerfakultäre Einrichtungen > GESS - CDSE (VWL)
Fachgebiet:	330 Wirtschaft
Freie Schlagwörter (Englisch):	macroeconomics , monetary policy , job ladder , worker heterogeneity , international trade , trade liberalization , financial frictions , variable markups , firm heterogeneity
Abstract:	This dissertation contributes to the understanding of how the heterogeneity of workers and firms shapes the economic effects of economic policies. In Chapter 1, I study the reallocation of workers across firms induced by monetary policy shocks. Chapters 2 and 3 are dedicated to studying the gains from trade and reallocation of sales in the aftermath of trade liberalization, and the role of financial frictions and variable markups play in it. Labor Market Effects of Monetary Policy Across Workers and Firms. In the first chapter, based on joint work with Andreas Gulyas (University of Mannheim) and Matthias Meier (University of Mannheim), we use Austrian social security records to analyze the effects of ECB monetary policy on the labor market. Our focus is on the role of worker and firm wage components, defined by an Abowd et al. (1999) wage regression. Our findings show that monetary tightening causes the largest employment losses for low-paid workers who are employed in high-paying firms before the tightening. Monetary tightening further causes a reallocation of workers to lower-paying firms. In particular low-paid workers who were originally employed in low-paying firms are prone to falling down the firm wage ladder. The second and third chapters are based on the current work with Andrii Tarasenko (University of Mannheim) and Volodymyr Vakhitov (American University Kyiv). In Chapter 2, Financial Frictions, Markups, and Trade Liberalization: Stylized Facts, we study the episode of unilateral trade liberalization between the European Union and Ukraine, and document a number of empirical stylized facts. We find that the aggregate capital-labor ratio of Ukrainian exporters to the EU increased after trade liberalization, while non-exporters to the EU did not experience the same pattern. Looking at the contributing factors to the increase in capital intensity, we apply dynamic decomposition of the capital-labor ratio by Melitz and Polanec (2015) and find within-sector reallocation of sales toward more capital-intensive / less financially-constrained firms to be an important driver. Moreover, we also find that reallocation of sales happened towards firms with lower markups. Hence, stylized facts indicate that financial frictions and variable markups could explain reallocation patterns observed among Ukrainian exporters of manufacturing goods to the European Union. Motivated by the findings in Chapter 2, Chapter 3, Financial Frictions, Markups, and Trade Liberalization: Quantitative Exploration, studies effects of trade liberalization in a small open economy with financial frictions and variable markups. We develop a small open-economy model and calibrate it to the Ukrainian manufacturing data. The model is generally based on Kohn et al. (2020) and borrows from Gopinath et al. (2020) and Edmond et al. (2023). The economy is populated by entrepreneurs that own intermediate producers, supply labor to a frictionless labor market, can borrow under a backward-looking collateral constraint, and export upon paying the fixed and iceberg-type cost of exporting. The final good is produced using Kimball (1995) aggregator that gives rise to variable markups in the domestic market, while abroad the markups are assumed to be constant. Unilateral trade liberalization increases welfare and productivity in the domestic economy. Moreover, the allocation of resources improves since the variation of both the effective cost of capital and markups decreases. The gains from trade are lower than in the model without financial frictions, but higher than in the model without variable markups.