Faculty & Research

Business, Government & the International Economy

Business, Government & the International Economy

Overview Faculty Curriculum Seminars & Conferences Awards & Honors
    • June 2012
    • Editorial

    Why Do Successful Women Feel So Guilty

    By: Debora Spar

    • March, 2021
    • Article

    Tariff Passthrough at the Border and at the Store: Evidence from U.S. Trade Policy

    By: Alberto Cavallo, Gita Gopinath, Brent Neiman and Jenny Tang

    We use micro data collected at the border and the store to characterize the price impact of recent US trade policy on importers, exporters, and consumers. At the border, import tariff passthrough is much higher than exchange rate passthrough. Chinese exporters did not lower their dollar prices by much, despite the recent appreciation of the dollar. By contrast, US exporters significantly lowered prices affected by foreign retaliatory tariffs. In US stores, the price impact is more limited, suggesting that retail margins have fallen. Our results imply that, so far, the tariffs' incidence has fallen in large part on US firms.

    • March, 2021
    • Article

    Tariff Passthrough at the Border and at the Store: Evidence from U.S. Trade Policy

    By: Alberto Cavallo, Gita Gopinath, Brent Neiman and Jenny Tang

    We use micro data collected at the border and the store to characterize the price impact of recent US trade policy on importers, exporters, and consumers. At the border, import tariff passthrough is much higher than exchange rate passthrough. Chinese exporters did not lower their dollar prices by much, despite the recent appreciation of the...

    • March 2021
    • Article

    A Diplomatic Counterrevolution: Indonesian Diplomacy and the Invasion of East Timor

    By: Mattias Fibiger

    This article reinterprets the Indonesian invasion of East Timor as a "diplomatic counterrevolution." Using the central archival records of the Suharto regime for the first time in English-language scholarship, it argues that Indonesian diplomats pursued diplomacy in Southeast Asia, non-aligned and Afro-Asian networks, Western capitals, international institutions, and global capital markets to secure international support for their impending invasion of East Timor. The success of this diplomatic offensive tipped the balance of power in Jakarta away from advocates of restraint like Adam Malik and toward advocates of annexation like Ali Murtopo. The diplomacy behind Indonesia’s invasion of East Timor reveals that the architecture of globalization, lauded by some scholars as inherently liberatory, was far more agnostic—capable of being turned to counterrevolutionary purposes in addition to revolutionary ones. And it suggests that diplomacy itself had been counterrevolutionized, as geopolitical and geoeconomic change combined to make the international system, particularly the states of the Global South, far more hostile to state-making claims and transformative worldmaking projects.

    • March 2021
    • Article

    A Diplomatic Counterrevolution: Indonesian Diplomacy and the Invasion of East Timor

    By: Mattias Fibiger

    This article reinterprets the Indonesian invasion of East Timor as a "diplomatic counterrevolution." Using the central archival records of the Suharto regime for the first time in English-language scholarship, it argues that Indonesian diplomats pursued diplomacy in Southeast Asia, non-aligned and Afro-Asian networks, Western capitals,...

About the Unit

The BGIE Unit conducts research on, and teaches about, the economic, political, social, and legal environment in which business operates. The Unit includes scholars trained in economics, political science, and history; in its work, it draws on perspectives from all three of these disciplines.

The following demonstrates one way of classifying the approaches the Unit takes to learning and teaching.

  • The Unit examines the “rules” and policies established by government and other non-business institutions that affect business in the United States.
  • The Unit turns to history to understand the origins of today’s business environment as well as some of the alternatives that have emerged from time to time.
  • The Unit examines other countries’ business environments and their historical development.
  • The BGIE group is deeply interested in the impact of globalization and the way rules are emerging to govern international economic transactions as globalization proceeds.

Recent Publications

Why Do Successful Women Feel So Guilty

By: Debora Spar
  • June 2012 |
  • Editorial |
  • The Atlantic
Related

Tariff Passthrough at the Border and at the Store: Evidence from U.S. Trade Policy

By: Alberto Cavallo, Gita Gopinath, Brent Neiman and Jenny Tang
  • March, 2021 |
  • Article |
  • American Economic Review: Insights
We use micro data collected at the border and the store to characterize the price impact of recent US trade policy on importers, exporters, and consumers. At the border, import tariff passthrough is much higher than exchange rate passthrough. Chinese exporters did not lower their dollar prices by much, despite the recent appreciation of the dollar. By contrast, US exporters significantly lowered prices affected by foreign retaliatory tariffs. In US stores, the price impact is more limited, suggesting that retail margins have fallen. Our results imply that, so far, the tariffs' incidence has fallen in large part on US firms.
Keywords: Trade Policy; Tariffs; Exchange Rate Passthrough; Economics; Trade; Policy; Currency Exchange Rate; Price; United States
Related

A Diplomatic Counterrevolution: Indonesian Diplomacy and the Invasion of East Timor

By: Mattias Fibiger
  • March 2021 |
  • Article |
  • Modern Asian Studies
This article reinterprets the Indonesian invasion of East Timor as a "diplomatic counterrevolution." Using the central archival records of the Suharto regime for the first time in English-language scholarship, it argues that Indonesian diplomats pursued diplomacy in Southeast Asia, non-aligned and Afro-Asian networks, Western capitals, international institutions, and global capital markets to secure international support for their impending invasion of East Timor. The success of this diplomatic offensive tipped the balance of power in Jakarta away from advocates of restraint like Adam Malik and toward advocates of annexation like Ali Murtopo. The diplomacy behind Indonesia’s invasion of East Timor reveals that the architecture of globalization, lauded by some scholars as inherently liberatory, was far more agnostic—capable of being turned to counterrevolutionary purposes in addition to revolutionary ones. And it suggests that diplomacy itself had been counterrevolutionized, as geopolitical and geoeconomic change combined to make the international system, particularly the states of the Global South, far more hostile to state-making claims and transformative worldmaking projects.
Keywords: Diplomacy; Geopolitics; History; Globalization; Indonesia; Timor-leste
Related

Targeted Price Controls on Supermarket Products

By: Alberto Cavallo and Diego Aparicio
  • March 2021 |
  • Article |
  • Review of Economics and Statistics
We study the impact of targeted price controls for supermarket products in Argentina from 2007 to 2015. Using web scraping, we collected daily prices for controlled and non-controlled goods and measured the differential effects on inflation, product availability, and price dispersion. We first show that, although price controls are imposed on goods with significant CPI weight, they have a temporary effect on aggregate inflation and no downward effect on other goods. Second, contrary to common beliefs, we find that controlled goods are consistently available for sale. Third, firms compensate for price controls by introducing new product varieties at higher prices. This behavior, which increases price dispersion within narrow categories, is consistent with a standard vertical differentiation model in the presence of price controls.
Keywords: Prices; Controls; Price Dispersion; Economics; Price; Cost Management; Goods And Commodities; Retail Industry; Argentina
Related

Fairness or Control: What Determines Elected Local Leaders’ Support for Hosting Refugees in Their Community?

By: Kristin Fabbe, Eleni Kyrkopoulou, Konstantinos Matakos and Asli Unan
  • 2021 |
  • Working Paper |
  • Faculty Research
When it comes to successful refugee reception the local level matters. Research overwhelmingly examines host communities' attitudes, but endorsement from local politicians is equally important to resolve conflicts and facilitate harmonious interaction. Yet, the preferences of local leaders and their willingness to support the resettlement process are understudied. We conduct the first-ever conjoint experiment on a representative sample of local elected leaders in Greece, a heavily-impacted country with many active host sites. We elicit elite preferences regarding refugee resettlement and find that local leaders are more likely to support it if they are involved in the process and can control the frequency and intensity of local-refugee interactions. Heterogeneous effects reveal that polarizing tensions around refugee resettlement derive from elites' divergent conceptions of control as opposed to different perceptions of fairness. Over-all, our results suggest that processes to mitigate early impact and exposure, combined with fair-share allocations, can dampen polarized reactions to future resettlement.
Keywords: Values; Control
Related

The Chinese Debt Trap Is a Myth: The Narrative Wrongfully Portrays Both Beijing and the Developing Countries It Deals With.

By: Deborah Brautigam and Meg Rithmire
  • February 6, 2021 |
  • Editorial |
  • The Atlantic (website)
Our research shows that Chinese banks are willing to restructure the terms of existing loans and have never actually seized an asset from any country, much less the port of Hambantota. A Chinese company’s acquisition of a majority stake in the port was a cautionary tale, but it’s not the one we’ve often heard. With a new administration in Washington, the truth about the widely, perhaps willfully, misunderstood case of Hambantota Port is long overdue.
Keywords: Financing And Loans; Developing Countries And Economies; International Relations; China
Related

The Coronavirus (COVID-19) Pandemic and the Global Economy (B)

By: Alberto Cavallo and Christian Godwin
  • February 2021 |
  • Supplement |
  • Faculty Research
By December 2020, the COVID-19 pandemic had swept across the globe, creating widespread disruption in all aspects of everyday life. Almost 90 million people had been infected and nearly two million had died from the disease. By this point in the pandemic—a year since the first rumors about the novel virus began, mask-wearing and social-distancing had become routine, and millions of people were working or studying from home. Grief and anxiety were widespread due to the loss of loved ones, financial hardships, and uncertainty about when the pandemic would recede. Meanwhile, the global economy was experiencing the worst crisis in decades, with a recovery that was slow, uncertain, and uneven. By the end of the year, it was clear that the economic crisis would not end until the virus was under control. To accomplish this, governments worldwide were relying on private companies to fast-track the development and distribution of COVID-19 vaccines, hoping for a return to normalcy in 2021.
Keywords: Economy
Related

Veracity Worldwide: Environmental, Social, and Governance (ESG) Risk

By: Kristin Fabbe
  • February 2021 |
  • Case |
  • Faculty Research
Keywords: Esg (environmental, Social, Governance) Performance
Related
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Contact Information

Business, Government & the International Economy Unit
Harvard Business School
Morgan Hall
Soldiers Field
Boston, MA 02163
BGIE@hbs.edu