THREE ESSAYS IN APPLIED ECONOMICS

Abstract

In this thesis, I apply economics analysis tools in various settings. My three essays in applied economics study the Great Trade Collapse in 2008-2009, policymaker's choice of intellectual property rights enforcement, and households' fertility decision under a cash-incentive pro-natalist policy.

Chapter \ref{trade_collapse}, ``Financial Shocks, Supply-chain Relationships and the Great Trade Collapse'', studies the Great Trade Collapse during 2008-2009 using a two-country business cycle model enhanced with long-term supply-chain relationships. With limited resources, firms choose whether to invest in the domestic market or foreign market. In the model, firms endogenously reallocate scarce resources from international to domestic supply-chains, which are acquired and maintained at lower cost. Under a financial shock (mimicking the event of financial crisis), firms reallocate resources back home and drive the total trade to GDP ratio to fall.

Chapter \ref{ipr}, ``Productivity, Political Economy, and Intellectual Property Rights'', examines how policymakers' political considerations lead to a sub-optimal level of intellectual property rights enforcement. Assuming stricter intellectual property rights enforcement would lead to more firms adopting frontier technology. Without any political constraint, policymakers would maximize the level of enforcement. However, due to the resistance from low productivity firms, policymakers may make a trade-off between staying in power and strict intellectual property rights enforcement, and choose a weak Intellectual Property Rights enforcement.

My last chapter, Chapter \ref{baby_bonus}, ``Baby Bonus, Anyone? Examining Heterogeneous Responses to a Pro-Natalist Policy'', examines the heterogeneous response of having a child to a universal pro-natalist program in Quebec, using the Census Masterfile. Here, family make trade-off between having children and forgone income due to rearing child, childcare, etc. In particular, we find that mid-income households and highly-educated women responded the most. Also, the policy affects both completed fertility and birth spacing.