Brothers in arms: The value of coalitions in sanctions regimes, with Julian Hinz, Katrin Kamin and Joschka Wanner. Economic Policy: Special Issue on Geoeconomics (forthcoming)

Abstract: This paper examines the impact of coalitions on the economic costs of the 2012 Iran and 2014 Russia sanctions. By estimating and simulating a quantitative general equilibrium trade model under different coalition setups, we (i) dissect welfare losses for sanctions senders and target; (ii) compare prospective coalition partners and; (iii) provide bounds for the sanctions potential — the maximum welfare change attainable — when sanctions are scaled vertically, i.e. with measures deepening up to an embargo, and horizontally, i.e. with coalitions expanding up to a global regime. To gauge the significance of simulation outcomes, we implement a Bayesian bootstrap procedure that generates confidence bands. Relative to unilateral action, we find that coalitions magnify welfare losses imposed while their impact on domestic welfare loss incurred depends on the design and sectoral dimension of sanctions. Hypothetical cooperation of large developing economies such as China additionally raises the deterrent force of coalitions. Finally, we quantify transfers that equalise welfare losses across coalition members to further demonstrate asymmetries in the relative economic burden of sanctions.

Trade Liberalization along the Firm Size Distribution: The Case of the EU-South Korea FTA, with Gabriel Felbermayr. Review of International Economics, 2023. 

Abstract: Leading theories suggest that amongst continuing exporters, lower variable trade costs should boost exports of smaller firms by the same or greater percentage rate than larger firms. However, investigating the impact of the deep EU-South Korea FTA with French customs data, we find robust evidence to the contrary. Applying a triple-difference framework, we report that the FTA increased sales in the top quartile of continuous exporters by 71.5% points more than in the bottom quartile. More than 90% of that growth premium is driven by reductions in NTBs. These findings suggest an additional channel driving the distributional effects of FTAs.

Après-ski: The Spread of Coronavirus from Ischgl through Germany, with Gabriel Felbermayr and Julian Hinz. German Economic Review, 2021. 

Abstract: The Austrian ski resort of Ischgl is commonly claimed to be ground zero for the diffusion of the SARS-CoV-2 virus in the first wave of infections experienced by Germany. Drawing on data for 401 German counties, we find that conditional on geographical latitude and testing behavior by health authorities, road distance to Ischgl is indeed an important predictor of infection cases, but – in line with expectations – not of fatality rates. Were all German counties located as far from Ischgl as the most distant county of Vorpommern-Rügen, Germany would have seen about 45 % fewer COVID-19 cases. A simple diffusion model predicts that the absolute value of the distance-to-Ischgl elasticity should fall over time when inter- and intra-county mobility are unrestricted. We test this hypothesis and conclude that the German lockdown measures have halted the spread of the virus.