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Opening Markets: Rules, Norms, and Bargaining in Trade Treaties

The emergence of trade policy as a divisive political issue, both in the United States and abroad, has led to a critical re-interpretation the practice of trade negotiation. At issue is the nature of trade agreements and whether or not one side, or the other, is the better negotiator. In the United States, socalled “bad deals” have been rationalized as the cost of international leadership. But, is this defense of trade treaties justified or more fundamentally, a correct depiction of the content of the agreements?

Formal and Informal Market Institutions: Embeddedness Revisited

Market exchange involves many cognitive and non-cognitive processes -- e.g., search, inference, prediction, negotiation. Much attention has been devoted to these issues both in theory and in experimental economics. I focus on the enforcement of market transactions against opportunistic behavior. I first discuss the different mechanisms that can deter opportunistic breach of contract. Some of these mechanisms rely on rational thought and self-interest; others rely on intrinsic motivation, including emotions. Implications for institutional design are summarized.

Firm Investment Decisions Under Hyperbolic Discounting

This paper constructs a model of corporate investment decisions under hyperbolic discounting of present values. The hyperbolic discounted present value can be interpreted as reflecting irrational myopic preferences or, as this paper demonstrates, reduced-form implications of corporate agency issues. Both cases in an underinvestment problem for the firm, but the firm valuation criteria differ.

Coping with Change: International Differences in the Returns to Skills

Expanded international data from the PIACC survey of adult skills allow us to analyze potential sources of the cross-country variation of comparably estimated labor-market returns to skills in a more diverse set of 32 countries. Returns to skills are systematically larger in countries that have grown faster in the recent past, consistent with models where skills are particularly important for adaption to dynamic economic change.

The Weaker Sex? Vulnerable Men, Resilient Women, and Variations in Sex Differences in Mortality Since 1900

Sex differences in mortality (SDIM) vary over time and place as a function of social, health, and medical circumstances. The magnitude of these variations, and their response to large socioeconomic changes, suggest that biological differences cannot fully account for sex differences in survival. We develop a set of empiric observations about SDIM with which any theory will have to contend.

Multilateral Trade Bargaining and Dominant Strategies

Motivated by GATT bargaining behavior and renegotiation rules, we construct a three-country, two-good general-equilibrium model of trade and examine multilateral tariff bargaining under the constraints of non-discrimination and multilateral reciprocity. We allow for a general family of government preferences and identify bargaining outcomes that can be implemented using dominant strategy proposals for all countries.

Characterizing Global Value Chains

Since the extent of both outsourcing and offshoring varies by sector and country, we develop a set of country-sector level measures of global value chains (GVCs) in terms of average production length, intensity of participation, and relative upstream positions on a production network. We distinguish production activities that are inside a country, and that cross borders once or multiple times. Using these measures, we characterize cross-country production sharing patterns and their evolutions for 35 sectors and 40 countries over 17 years.

Peter Koudijs

Peter Koudijs is an Associate Professor of Finance at the Stanford Graduate School of Business where he teaches History of Financial Crises in the MBA program. He joined the GSB in August 2011. Koudijs received a Bachelor’s degree, cum laude, in economics from the University of Utrecht in the Netherlands. He earned a PhD degree, summa cum laude, in economics at Universitat Pompeu Fabra in Spain in 2011. Koudijs has obtained various grants and fellowships from the European Union, the Economic History Association and different Dutch and Spanish scholarship programs.

The Value of Smarter Teachers: International Evidence on Teacher Cognitive Skills and Student Performance

International differences in teacher quality are commonly hypothesized to be a key determinant of the large international student performance gaps, but lack of consistent quality measures has precluded testing this. Using unique assessment data, we construct country-level measures of teacher cognitive skills. We find substantial differences in teacher cognitive skills across countries, and these are strongly related to student performance. Results are supported by fixed-effects estimation exploiting within-country between-subject variation in teacher skills.

Finding the Equilibrium Real Interest Rate in a Fog of Policy Deviations

A large number of economic research papers have recently been written endeavoring to estimate the current level and trend in the equilibrium real interest rate. These studies are generally model-based: they either use semi-structural time-series and filtering methods or formal structural dynamic stochastic general equilibrium (DSGE) macroeconomic models to examine the relationship between the equilibrium real interest rate and its possible determinants.

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