https://hdl.handle.net/10419/2 2026-10-04T12:07:23Z https://hdl.handle.net/10419/325492.2 Title: Welfare effects of industrial policies: Theory and evidence from India's de-reservation policy Authors: Gimenez-Perales, Victor; Mulyukova, Alina Abstract: We study how industrial policies affect welfare depending on firms' management practices. In a model of multi-product firms, we show that firms with better management practices are less adversely affected by an industrial policy that fosters market entry and competition. This result follows from firms with better management practices specializing in fewer products with lower marginal costs. Evidence from India's de-reservation policy supports these predictions. Our simulations estimate a 0.29% welfare gain in India from the policy. The same policy could increase welfare by 0.39% in an environment with better management practices, such as those in the US. 2026-01-01T00:00:00Z https://hdl.handle.net/10419/315471.3 Title: Spatial distribution of housing liquidity Authors: Amaral, Francisco; Toth, Mark; Zdrzalek, Jonas Abstract: This paper examines the relationship between location, liquidity, and prices in housing markets. We construct spatial datasets for German and U.S. cities and show that liquidity and prices decline with distance to the city center. To rationalize these patterns, we develop a spatial model of housing search. Location preferences concentrate buyers in central areas, generating tighter markets that are more liquid and command higher prices. Counterfactuals show that increasing search efficiency raises welfare and prices, especially in peripheral areas. Our findings highlight the importance of demand-side preferences and market tightness for understanding liquidity and asset prices. 2026-01-01T00:00:00Z https://hdl.handle.net/10419/335894.2 Title: Guns and butter: The fiscal consequences of rearmament and war Authors: Marzian, Johannes; Trebesch, Christoph Abstract: We study the fiscal consequences of large military buildups. To do so, we assemble the Global Budget Database, a comprehensive dataset of disaggregated central government finances for 20 countries from 1870 to 2022. We identify 114 episodes of military spending booms, in peace and war, and analyze their financing and long-term fiscal legacy. Consistent with theory, wartime booms are financed primarily through debt, while peacetime booms rely on a more balanced mix of debt and taxes. In contrast to the classic notion of “guns versus butter”, we find little evidence that social spending is cut during military expansions. Instead, when societies rearm, they tend to choose guns and butter, resulting in higher debt, expenditures, and taxes. Debt rises and later falls, but tax rates and tax revenues remain elevated for 15 years or more. Large geopolitical shocks, in war and peace, result in higher taxes and a lasting fiscal expansion. 2026-01-01T00:00:00Z https://hdl.handle.net/10419/339613 Title: Plurilateral trade agreements: A complementary margin to preferential liberalization Authors: Chochua, Lasha; Lake, James; Willmann, Gerald Abstract: We show that plurilateral agreements facilitate global tariff liberalization by creating an MFN-based margin of cooperation that leaves preferential access via preferential trade agreements (PTAs) unchanged. In a model of endogenous trade agreement formation with farsighted governments, PTAs become rigid once exclusion or freeriding incentives bind, constraining further PTA expansion. Plurilateral agreements relax these constraints by allowing countries to liberalize selectively in a differentiated goods sector without altering existing PTAs. As a result, the stable equilibrium trade network consists of the PTAs that would arise absent plurilaterals, augmented - but not replaced - by plurilateral MFN liberalization. This mechanism provides an explanation for the growing role of sectoral plurilateral agreements within the WTO as preferential liberalization becomes increasingly constrained. 2026-01-01T00:00:00Z