CEPII, Recherche et Expertise sur l'economie mondiale
Jeudi 17 janvier 2019
14.30-15.30 - CEPII, 20 avenue de Ségur, 75007 Paris
Research seminar « Fundamental Moments »

Laurent Pauwels
Senior Lecturer
University of Sydney
Laurent Pauwels, Senior Lecturer at the University of Sydney, will present the main findings of his paper "Fundamental Moments" co-authored with Jean Imbs, Paris School of Economics.

Global trade can give rise to global hubs, which find themselves at the center of the global economy. A hub is a center of activity - geographic or sectoral - whose influence on the global economy is large enough that local disturbances have observable consequences in the aggregate. This paper investigates the existence, nature, and rise of such hubs through a model of worldwide input-output linkages. The model is fitted to the World Input-Output Database (WIOD) to evaluate the importance of vertical trade in creating global hubs with significant effects on the volatility of countries' cycles, and their international correlation. The paper's  results suggest that specialization has sizeably increased worldwide since 1995, with significant consequences on GDP volatility and co-movements, especially in developed countries. The increase in specialization, in turn, is well explained by international trade.

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