Job Market Paper
Technology and the Geography of Industrial Policy
Abstract Industrial policy around the world is increasingly targeting sectors heterogeneously across regions to account for sectoral agglomeration externalities. This paper provides a theoretical framework to study when such spatial targeting is optimal. I demonstrate that the optimal policy across regions depends on the underlying productivity structure: whether agglomeration affects Hicks-neutral (input-neutral) or Harrod-neutral (labor-augmenting) productivity, the two dominant formulations in spatial economics. When productivity is Hicks-neutral , optimal industrial subsidies increase with regional sector size. However, when productivity is Harrod-neutral, the optimal industrial subsidy is a constant ad-valorem wage subsidy across all regions. I apply this framework to manufacturing in England using data on 153 regions, where I estimate the productivity structure and the agglomeration elasticity. In the Hicks-neutral case, place-based policies raise welfare by 5.1% versus 2% for uniform subsidies. In the Harrod-neutral case, uniform subsidies raise welfare by 3.1%, while place-based ones reduce welfare by 0.7%. The estimation reveals predominantly Hicks-neutral technology, supporting place-based over uniform policies for manufacturing in England.
Working Papers
The Economic Geography of Climate Risk with Jordan-Rosenthal Kay and Tom Bearpark
Abstract Projected temperature changes are variable in both their magnitude and geography. This paper studies how nonlinear damages and general equilibrium forces filter this climate risk across time and space. To do so, we build a tractable dynamic spatial model linking countries through trade and migration, and derive analytical first- and second-order welfare approximations that decompose the mean and variance of welfare changes into damage function, trade, and migration components. Using an ensemble of temperature projections from CMIP-6 and an empirically estimated damage function, we show that climate change-induced welfare risk is large. The standard deviation of country-level projected welfare loss across temperature projections is on average over 8% - compared to an average welfare loss of 13% - and is spatially unequal. Climate risk inequality is half as large as global income inequality. We show that spatial linkages reshape not only the level of climate damages, but also the spatial distribution of climate risk: accounting for trade and migration can reduce the standard deviation of welfare changes by up to 40% in low-income, internationally integrated nations that can diversify their exposure to local shocks.
Works in Progress
Federal taxes in a spatial economy
Abstract This paper shows that a uniform federal tax can generate heterogeneous regional effects through its interaction with local economic fundamentals and differences in labor-supply elasticities across regions. When regions differ in their intensive-margin labor supply responses, a common tax shock induces unequal changes in after-tax wages and welfare, distorting the spatial allocation of workers. I quantify these effects using a structural spatial general-equilibrium model featuring both state and federal taxes, disciplined by estimates of regional labor demand and labor supply elasticities. The model highlights spatial reallocation as an additional channel through which tax policy affects welfare. Following a federal tax cut, aggregate welfare rises by 5.6 % when migration is restricted and by 7.7 % when workers can relocate, reflecting both within-region heterogeneity and cross-region mobility. The results underscore that understanding the true incidence of federal taxation requires accounting for regional heterogeneity in behavioral elasticities and the ensuing spatial adjustments.