FES International Research Seminar Series with Professor Laura Alfaro, Harvard Business School, USA

Our last speaker this semester in the FES International Research Seminar Series is Laura Alfaro, who is the Warren Alpert Professor of Business Administration atHarvard Business School. Laura is also a Faculty Research Associate in the National Bureau of Economic Research's International Finance and Macroeconomics Program and the International Trade and Investment Program, member of the International Finance Corporation (IFC) Economic Advisory Board, the Latin-American Financial Regulatory Committee (CLAAF), Faculty Associate at Harvard's Weatherhead Center for International Affairs, and member of the David Rockefeller Center for Latin American Studies’ (DRCLAS) policy committee, among others. She served as Minister of National Planning and Economic Policy in Costa Rica from 2010-2012. In 2008, she was honored as a Young Global Leader by the World Economic Forum. Laura is the author of multiple articles published in leading academic journals such as the American Economic Review, Review of Economic Studies, Journal of Political Economy, Journal of International Economics, and of Harvard Business School cases related to the field of international economics and in particular international capital flows, foreign direct investment, sovereign debt, trade, and emerging markets.

Speaker: Laura Alfaro, Harvard Business School and NBER

Title:  The Real Exchange Rate, Innovation and Productivity: Regional Heterogeneity, Asymmetries and Hysteresis (joint with Alejandro Cunat, Harald Fadinger, and Janping Liu)

The abstract: 

We evaluate manufacturingfirms’ responses to changes in the real exchangerate (RER) usingdetailed firm-level data for a large set of countries for the period 2001-2010. We uncover the following stylized facts: In export-oriented emerging Asia, real depreciations are associated with faster growth of firm-level TFP, higher sales and cash-flow, and higher probabilities to engage in R&D and to export. We find negative effects for firms in other emerging economies, which are relatively more import dependent, and nosignificant effects for firms in industrialized economies. Motivated by these facts, we build a dynamic model in which real depreciations raise the cost of importing intermediates, affect demand, borrowing-constraints and the profitability of engaging in innovation (R&D). We decompose the effects of RER  changes on productivity growth across regions in to these channels. We estimate the model and quantitatively evaluate the different mechanisms by providing counterfactual simulations of temporary RER mov ements and conduct several robustness analyses.  Effects on physical TFP growth, while different across regions, are non-linear and asymmetric.

 Date: May 29, 2018

 Time: 12:10-13:30

 Venue: Shabolovka campus, room 3211

 FES Seminars webpage: https://economics.hse.ru/en/seminars/ 

For external participants: to order the pass, please contact dmalbakhova@hse.ru