Essays on the Effect of Shocks in a Globalized Economy : Evidence from Extreme Weather Events, Sanctions, and the Role of the US Dollar in International Trade

This dissertation delves into the economic impact of various shocks in a globalized world. Each chapter represents an independent paper, with two chapters focusing on the macroeconomic effects of shocks and two chapters examining the response of firms. Chapter 1 investigates the role of currency choice in international trade for the transmission of shocks across countries in a global macroeconomic model. The remaining chapters analyze the consequences of specific shocks empirically. Chapter 2 explores how weather-related supply shocks disseminate throughout the economy and affect aggregate production using time series data. Chapters 3 and 4 scrutinize the effects of shocks on firms and highlight the relevance of heterogeneity at the firm level in assessing their consequences. The former examines the impact of supply disruptions due to a climate-related shock on international trade and supply chains, while the latter analyzes the repercussions of a geopolitical shock, accompanied by a sudden change in trade policy in the form of the imposition of sanctions, on the export activity and the overall performance of firms. Both these chapters rely on a novel firm level dataset for Germany, providing not only information on firm characteristics but also on their export and import activities by product and partner country. Thanks to the monthly frequency of this highly detailed micro data, it is possible to examine firms’ short-term trade responses to the shocks under study. By investigating the impact of shocks, including underlying mechanisms and heterogeneities, this thesis aims to contribute to a better understanding of the effects of exogenous events and disruptions which is crucial for firms and policymakers to mitigate the adverse consequences they entail.


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