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Rojas Bernal, Luis Alejandro

University of British Columbia

In this dissertation, I contribute to the theory of macroeconomic aggregation by building a neoclassic environment for production network economies with heterogeneous households and distortions, both for closed and open economies. In this environment, labor supply can be endogenous or exogenous. My main objective is to provide decompositions that capture the effect of microeconomic shocks on aggregate measures of real output, country-level production, and household-specific measures of real consumption. Chapter 2 provides decompositions that capture the effect of distributional variations on aggregate measures of real output and idiosyncratic measures of real consumption. The main theoretical contribution of this chapter is to show that variations in the distributions of labor income and consumption expenditure influence total factor productivity (TFP), and these effects are only neutral under highly restrictive conditions. The TFP decomposition I introduce is the first for a distorted general production network economy with household heterogeneity in preferences and income. Chapter 3 provides a novel country-level aggregate efficiency wedge decomposition that accounts for the possibility that factors of production and dividends cross national boundaries. The main contribution is to provide decompositions and sufficient statistics for the country-level TFP that account for the complexity of global supply chains and factoral reallocation across countries. My findings illustrate the interplay of global supply chains and economic spillovers through intermediate input markets. Chapter 4 provides evidence for how changes in global input-output networks between 1965 and 2000 were advantageous for developing countries and unfavorable for advanced economies. For example, holding the global input-output network fixed, TFP growth in China and India would have been 26.6% and 9.7% lower between 1965 and 2000. Whereas for the US and Australia, TFP growth would have been 4.0% and 16.8% higher. Finally, I show that the dynamics of the domestic intermediate input cost share capture the importance that the structure of the global input-output network has on the amplification of shocks on TFP. These results illustrate the importance of industrial linkages and robust domestic intermediate input markets for economic growth.

Text

2024-06-06

Attribution-NonCommercial-NoDerivatives 4.0 International

http://hdl.handle.net/2429/88419

Economics

University of British Columbia

UBCV

http://creativecommons.org/licenses/by-nc-nd/4.0/