Daniel P. Murphy

Category: International Trade

• Demand complementarities and cross-country price differences

  2019

  Canadian Journal of Economics, 70, 112-126, Read

  Abstract

  Empirical studies document that markups vary across destinations. This paper proposes a novel mechanism to explain variation in markups: consumers’ utility from final goods and services depends on their consumption of complementary goods and services. In countries with more complementary goods and services, consumer demand is less elastic, enabling monopolistically competitive firms to charge higher prices. The paper provides empirical evidence documenting a dependence of prices on demand complementarities.

• Welfare consequences of asymmetric growth

  2016

  Journal of Economic Behavior & Organization, 126(A), 1-17, Read

  Abstract

  Standard models in macroeconomics and development economics imply that growth in the aggregate enhances welfare for everyone in the economy. I show that instead, if economic growth is biased toward the consumption bundle of the rich, the welfare of the poor may fall. I document the relevance of this mechanism during the latter part of the Twentieth Century by showing that new information technology disproportionately benefited sectors consumed by the rich.