China's reported exports to the United States have long been smaller than U.S.-reported imports from China. Earlier explanations for this focused on re-exports through Hong Kong, and appeared to account for most of the difference. Now, even after taking Hong Kong into account properly, there has...

Since the late 1990s, reported U.S. imports from China and Hong Kong have regularly and increasingly exceeded reported exports of China and Hong Kong to the United States. This discrepancy, which is not caused by re-exporting through Hong Kong, varies by product categories, and in some cases...

Since the extent of offshoring and production sharing varies by sector and country, we develop measures of GVCs in terms of length, intensity, and location of participation at the levels of country, country-sector, and bilateral sector, and distinguish among pure domestic, directly traded, and...

The real effective exchange rate (REER) is one of the most cited statistical constructs in open-economy macroeconomics. We show that the models used to compute these numbers are not rich enough to allow for the rising importance of global value chains. Moreover, because different sectors within...

This paper integrates two lines of research: trade in global value chains and embodied emissions into a unified conceptual framework. This allows both value-added and emissions to be systematically traced at the country, sector, and bilateral levels through various production network routes. By...

The United States imports intermediate inputs from China, helping downstream US firms to expand employment. Using a cross-regional reduced-form specification but differing from the existing literature, this paper (a) incorporates a supply chain perspective, (b) uses intermediate input imports...

Most manufacturing activities use inputs from the financial and business services sectors. But these services sectors also compete for resources with manufacturing activities, provoking concerns about de-industrialization -- financial services in industrial countries like the United States and...

It takes many years for more efficient electronic payments to be widely used, and the fees thatmerchants (consumers) pay for using those services are increasing (decreasing) over time. Weaddress these puzzles by studying payments system evolution with a dynamic model in a twosidedmarket setting....

Despite the increasing dominance of digital technology in modern communications, face-to-face interactions are believed to play an irreplaceable role in facilitating complex cross-border business transactions. However, empirical research to identify the impact often faces the challenge of...

Paying with a mobile phone is a cutting-edge innovation transforming the global payments industry. However, some advanced economies like the U.S. are lagging behind in mobile payment adoption. We construct a dynamic model with sequential payment innovations to explain this puzzle, which uncovers...