More advanced technologies demand higher degrees of specialization - and longer chains of production connecting raw inputs to final outputs. Longer production chains are subject to a "weakest link" effect: they are more fragile and more prone to failure. Optimal chain length is determined by the...

This paper proposes a framework for gross exports accounting that breaks up a country's gross exports into various value-added components by source and additional double counted terms. By identifying which parts of the official trade data are double counted and the sources of the double...

The trade linked to international production networks - supply-chain trade for short - is associated with momentous global economic changes. This paper presents a portrait of the global pattern of supply-chain trade and how it has evolved since 1995. The paper draws on a variety of data sources...

This paper develops an elementary theory of global supply chains. We consider a world economy with an arbitrary number of countries, one factor of production, a continuum of intermediate goods, and one final good. Production of the final good is sequential and subject to mistakes. In the unique...

Using an original data source, this paper investigates the circumstances under which firms adopt computer numerical control (CNC), an important type of flexible automation which can significantly increase productivity, product variety and quality. The paper shows that arms'-length...

The incidence of taxes on consumers and producers plays a central role in evaluating energy tax policy, yet the literature testing the main predictions of the tax incidence model is sparse. In this paper, we examine the pass-through rate of state gasoline and diesel taxes to retail prices, and...

Trade is measured on a gross sales basis while GDP is measured on a net sales basis, i.e. value added. The rapid internationalisation of production in the last two decades has meant that gross trade flows are increasingly unrepresentative of the value added flows. This fact has important...

This paper provides both a conceptual framework for decomposing a country's gross exports into value-added components by source and a new bilateral database on value-added trade. Our parsimonious framework integrates all previous measures of vertical specialization and value-added trade in the...

This paper updates the conceptual foundations for measuring real effective exchange rates (REERs) to allow for vertical specialization in trade. We derive a value-added REER describing how demand for the value added that a country produces changes as the price of its value added changes relative...

It has been previously shown that for sufficiently large pools of patient-donor pairs, (almost) efficient kidney exchange can be achieved by using at most 3-way cycles, i.e. by using cycles among no more than 3 patient-donor pairs. However, as kidney exchange has grown in practice, cycles among...