Sebastian Benz

The structure of the German economy

Exploiting the information contained in an economy’s input-output matrix and using the novel approach developed by Fisher and Marshall (2011), we calculate Rybczynski effects and Stolper–Samuelson effects for Germany in 2007. We show how sectoral output and factor remuneration react to exogenous changes of factor endowments and product prices, respectively. These calculations are implemented using two different models comprising one with labour and capital as the classical production factors and one where we introduce patent stock as an additional factor of production. In the former, we further differentiate between a scenario where all production factors are mobile and one with sector-specific capital. In the latter analysis, we measure the impact of innovation-targeting policy action for sectoral output. Positive Rybczynski effects of patents and high-skilled workers are strongest in knowledge-intensive sectors, while other sectors contract. The introduction of patents as a further production factor has only minor influence on the Rybczynski effects of other factors.

The Structure of Europe: International Input–Output Analysis with Trade in Intermediate Inputs and Capital Flows

In this paper we theoretically derive an international Rybczynski matrix. Its elements indicate the aggregate output change in a country when endowment with one or more factors in the same or another country is increased. This allows us to characterize the production structure in 11 countries of the European Union. Starting from a baseline case with free trade in final goods only, we analyze two types of interaction between countries: international trade of intermediate inputs and internationally mobile capital.

Managerial versus Production Wages: Offshoring, Country Size, and Endowments

In this paper, we explore the role of trade in differentiated final goods as well offshoring of tasks for inequality both within and between countries. We emphasize the distinction between managerial and production labor. Production labor is assumed to be a variable input composed of tradable tasks, while managerial labor is a fixed, non-tradable input. We use a 2-country model recently developed by Grossman & Rossi-Hansberg (2010b) that highlights trade in production task, driven by Marshallian economies of scale. We analyze country size and relative endowment effects on the managerial wage premium as well as on international inequality measured in income per head. We compare these effects in a world where trade is restricted to differentiated final goods with a world with trade in both final goods and production tasks.