A quantitative general equilibrium model is calibrated using US and Western European data. Results indicate that the quantitative importance of extensive margin growth in explaining expenditure share shifts and terms of trade movements is substantial.

The expenditure shift pushes terms of trade against economies specialized in the lagging sector —a result opposite to the standard terms-of-trade effect that emerges with unbalanced intensive margin growth. Empirical evidence supports the model's predictions.

A model shows how uneven product diversification generates macro trends qualitatively different from those arising when uneven growth occurs along the intensive margin. With love of variety, consumers endogenously reduce expenditure shares on sectors diversifying production least.

This paper documents that product diversification occurs at systematically lower rates in agricultural sectors compared to manufacturing activities. Trade data shows this pattern holds robustly across countries and decades. Domestic production data for the US and EU confirm the finding.

Congrats Alejandro! Well deserved!

Hi! I’d love to be added!

In LATAM, this is unfortunately not true.

Moreover, we expect center-right incumbent to hand in power peacefully in March. Orsi has even expressed willingness to include opposition in new government!

Tinghan Zhang, tinghan-zhang.github.io

Shobhit Kulshreshtha, sites.google.com/view/shobhit...

Quang-Phuc Phung, quangphucphung.com

Leena Bhattacharya, sites.google.com/view/leenabh...

Dongchen He, dongchen-he.github.io