Rowan Shi
I am an Assistant Professor of Economics at Toronto Metropolitan University in Canada.
research interests
International trade, urban/spatial economics, computational methods
contact
Zoom
E-mail: rowanxshi@torontomu.ca
GitHub: rowanxshi
CV: web or PDF
Research
working papers
Combinatorial discrete choice, with Costas Arkolakis, Fabian Eckert
Revise and Resubmit, American Economic Review
Abstract
Discrete choice problems with complementarities among options quickly grow infeasible to solve, since they generically require evaluating all combinations of choices. We develop a solution method that applies whenever choices are weakly complementary or substitutable, using the implied choice monotonicity to discard suboptimal combinations without computing their payoff. It is orders of magnitude faster than existing approaches, finds the global solution, and extends to heterogeneous-agent settings. Using our method, we calibrate a general equilibrium model of multinational firms selecting global production locations to show that complementarities among locations can amplify, dampen, or even reverse the welfare gains from multinational production.NBER WP, Julia Package and documentation
The non-traded gains from trade: Evidence from Brazil, with Rafael Parente
Submitted
Abstract
Using Brazil’s import liberalization as a quasi-natural experiment, we uncover a new margin for the gains from trade: the reallocation of labor from smaller to larger producers in the non-traded sector. Larger non-traded producers self-select into importing, expanding as they incorporate foreign inputs. We develop a parsimonious model of heterogeneous producers consistent with the empirical findings, then show that this reallocation is welfare-enhancing but disappears when all non-traded producers make the same importing decision. The quantitative welfare effect of this margin is 0.02\% for the average local labor market, reaching up to 0.2\% for the largest regions in Brazil.Solving combinatorial discrete choice problems in heterogeneous agent models: theory and an application to corporate tax harmonization in the European Union, with Kathleen Hu
Abstract
This paper develops a solution method for computing optimal decisions to combinatorial discrete choice problems (CDCPs) in heterogeneous agent settings. With an arbitrary type distribution over any number of differentiated characteristics, it quickly computes the policy function mapping the entire type space to corresponding optimal actions. The binary decisions can display either supermodular or submodular interactions. Problems of this structure arise naturally ineconomic settings, especially in international trade and industrial organization. The proposed algorithm is particularly well suited for estimating or computing general equilibrium models incorporating heterogeneous agents solving CDCPs, including choices on plant locations, input sourcing partners, or export market entry. As an illustration of the algorithm in practice, the paper then turns to evaluating the effects of a counterfactual policy equalizing corporate tax rates across the European Union using a quantitative general equilibrium model where heterogeneous firms optimally select a set of countries in which to operate affiliates.works in progress
Place-based policy for national welfare, with Paula Donaldson, Fabian Trottner