Essays on trade and economic geography

Ningyuan, Jia (2024) Essays on trade and economic geography. PhD thesis, London School of Economics and Political Science.

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Abstract

This thesis consists of three chapters on international trade and economic geography. The first chapter examines Family Planning Programs (FPPs) as a driver of structural transformation. Many nations have implemented FPPs as a strategic response to demographic shifts, aiming to optimize economic growth. This chapter introduces a comprehensive dynamic economic geography model, incorporating dynamic fertility decisions, multi-regional and multi-sectoral frameworks, non-homothetic preferences, technological advancements, and region-specific constraints. The core mechanism suggests that changes in the total labor force predominantly favor labor-intensive non-agricultural sectors, thereby facilitating structural transformation. Counterfactual analyses indicate that China’s FPPs initially boost the share of non-agricultural employment by 0.7 percentage points but lead to a 2.7 percentage point reduction in the long term. The second chapter investigates the global liquefied natural gas (LNG) market. Around three-quarters of global trade in LNG is transacted within long-term contracts between buyers and sellers. Reduced-form evidence from transactions between 2009 and 2019 shows contracts operate as call options. We model a contractual relationship where noncontractible effort from the seller contributes to the relative value of a contract shipment. Estimates of our model suggest the seller’s effort is important, and that sellers extract a large share of the contract value. The results suggest there are significant frictions in the LNG spot market due to technology and geography constraints and also its relatively small size. The third chapter examines the implications of the EU-UK Trade and Cooperation Agreement (TCA) using a dynamic spatial general equilibrium model. Unlike previous studies that primarily projected potential impacts of Brexit based on speculative scenarios, this analysis introduces new estimates of tariffs and non-tariff measures (NTMs) specified by the TCA. The findings show that while the TCA will necessitate substantial adjustments for some sectors, Brexit will not fundamentally alter the overall structure of the UK economy. However, the main impacts will manifest as significant hits to real wages and productivity, exacerbating the long-standing economic challenges faced by the UK.

Item Type:	Thesis (PhD)
Additional Information:	© 2024 Ningyuan Jia
Library of Congress subject classification:	G Geography. Anthropology. Recreation > G Geography (General) H Social Sciences > HC Economic History and Conditions H Social Sciences > HF Commerce
Sets:	Departments > Economics
Supervisor:	Dhingra, Swati
URI:	http://etheses.lse.ac.uk/id/eprint/4693

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