International macroeconomics literature has made important contributions to understand how business cycles transmit across countries, and to analyze how trade policy affects welfare. This dissertation contains three papers that are closely related to these branches of the economic literature. On the one hand, we explore the effect of common trade partners on business cycle comovement and find that countries with more similar trade partners have more synchronized business cycles. Once we account for the effect of common trade partners, the overall effect of trade on business cycle comovement doubles. On the other hand, we study Colombia's trade integration over a 30 year period through the lens of a general equilibrium model with a dynamic export technology. We find that a decline in tariffs accounts for about 75 percent of the growth in exports as a share of manufacturing sales. The remaining 25 percent can be attributed to changes in the export technology and market access. These changes in policy and export technology boost welfare and production, specially in the short run. Finally, we develop a two-country multi-sector model with input-output linkages and dynamic export decisions to analyze aggregate and sector trade policies. This paper fills the gap between static-multi sector models and the literature of one-sector dynamic exporters. We use our set-up to analyze Colombia's trade liberalization in the early 1990's and find that a unilateral trade liberalization has a positive effect on welfare, exports, investment and output. Consistent with the static literature we observe that welfare gains are bigger when we include input-output linkages, add more sectors and liberalize sectors with no comparative advantage.
|Commitee:||Bai, Yan, Reichman, Daniel|
|School:||University of Rochester|
|Department:||School of Arts and Sciences|
|School Location:||United States -- New York|
|Source:||DAI-A 82/3(E), Dissertation Abstracts International|
|Subjects:||Economics, Economic theory, Commerce-Business|
|Keywords:||Business cycles fluctuations, Gains from trade, International business cycles, Trade, Trade liberalization, Trade policy|
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