Globalization has, in varying degrees, made all trade global in one way or another. That has made data on trade between countries and within countries—and the underlying dynamics within that data—increasingly difficult to untangle. Thomas Chaney, in opening this spring’s Becker Friedman Institute conference on trade, chose to frame this data problem as an opportunity to study trade economics more holistically. That set the tone for a conference that allowed economists to discuss problems related to trade in terms of both their intra- and international implications at once.
Erasing the distinction between global and local trade allows more complete thinking on certain issues. For instance, David Atkin’s presentation on globalization focused on the location-based costs that different nations’ proximity to one another imposed on a standard basket of goods. The point? Decomposing the costs of importing needed goods from near and far, and being able to ask if international trade is nurturing or suffocating developing economies. Atkin and his coauthors used Google Maps and CPI microdata to measure the markup incurred by more remote countries, painting a picture of who wins and loses as the world economy grows increasingly interconnected.
But interconnectedness does not preclude heterogeneity, as illustrated in Jessie Handbury‘s work on nutritional disparities based on socioeconomic status. In examining why diet-related health problems disproportionately affect the poor and uneducated, Handbury found that access to healthy food was not a panacea to getting varying global populations to eat better. Unique aspects of their experience shaped their dietary preferences; improving access to such foods made more of a difference than lowering prices of healthy items, but more often, more education was a stronger factor in healthier eating. Thus, Handbury concluded, efforts to address nutritional disparities around the world must be multi-pronged, affording people greater access to healthy food as well as providing the sorts of educational opportunities that encourage citizens to make healthier decisions about what they eat.
Cities offer a microcosm of sorts for trade economists, one that Treb Allen and his coauthors took advantage of to develop a general equilibrium model that can evaluate how design of zoning policies—not unlike differing trade policies between countries—create positive economic activity that spills between zones. Most models of cities account for negative externalities, but Allen accounted for the role that place has in shaping where people choose to live and work, painting a picture of how people commute and where they spend their time as a product of how different parts of a city are zoned for different lifestyles and use cases. The resulting model creates interesting maps of good and bad areas to live in a city like Chicago—a useful way to evaluate the unintended consequences that place-based policies can have on the lives of individuals.
The wide variety of scholarship being discussed at this year’s conference certainly seems to validate the holistic method of discussing trade models and data. Hopefully, these increasingly interconnected datasets will lead to even more interconnected conversations between such scholars.
—Mark Riechers