Trade, Inequality and Development

10 July 2018. It’s Day 5 at the 2018 Summer Institute of the Econometric Society, and we’ve finally reached the panel discussions covering topics of trade and development. As attendees arrived at Hotel Azalai here in Cotonou, it quickly became apparent that we were going to have another full house for our two speakers of the day, Simon Alder (University of North Carolina) and Illenin Kondo (University of Notre Dame).

Dr. Alder began the day with a lecture on transportation infrastructure and regional development, comparing and contrasting two case studies. China’s National Expressway Network (NEN) and India’s Golden Quadrilateral (GQ) are two different highway networks developed to improve economic efficiency through transport infrastructure and market access. While India’s strategy focused on constructing a highway network connecting the economic powerhouses of India’s four largest cities, China’s strategy established a web of interconnected highways that included each city with a population of 500,000 or more in the NEN. Professor Alder focused on the aggregate and distributional effects of India’s GQ, which produced an increase of 2.46% of annual GDP, yet did not extend market access to the interior and intermediate cities of India. Had India had adopted a more convergent strategy like China’s NEN, aggregate income—as well as inclusion and development of intermediate cities—would have increased substantially.

During the afternoon session, Dr. Kondo focused on the recent advancements of global trade, inequality, and development.  Kondo particularly honed in on how labor markets were affected by increased trade between the U.S. and China 2000 to 2007 – U.S. imports from China almost doubled. Using an array of intricate econometric models to explain household and firm behavior in response to this increased trade, Kondo expounded upon the heterogeneous effects across 38 countries, 50 U.S. states, and 22 sectors.

Another successful day at the Summer Institute was concluded! Micah Didion, an ASE student here from Wisconsin in the United States, weighed in on the SIES:

Personally, I am very thankful for these courses, as not only do they help to explain the current events happening around the world, but they allow students to see how to effectively present one’s research and publications.

Above: Dr. Alder discusses the computation of shortest paths through a given network. Below: Dr. Kondo talks with a group of students at the end of day.