I am an economist with research interests in macroeconomic development and trade. I received my Ph.D. in Economics from UCLA.
I am an IES Fellow at Princeton University, and I will be an Assistant Professor of Economics at Yale University's School of Management starting Summer 2021. I am also a Research Affiliate at the Central Bank of Costa Rica, and I was selected as a Scholar at the Harvard Academy for International and Area Studies at Harvard University.
with Esteban Méndez-Chacón
This paper studies the short- and long-run effects of large firms on economic development. We use evidence from one of the largest multinationals of the 20th Century: The United Fruit Company (UFCo). The firm was given a large land concession in Costa Rica—one of the so-called "Banana Republics"—from 1899 to 1984. Using administrative census data with census-block geo-references from 1973 to 2011, we implement a geographic regression discontinuity (RD) design that exploits a quasi-random assignment of land. We find that the firm had a positive and persistent effect on living standards. Regions within the UFCo were 29% less likely to be poor in 1973 than nearby counterfactual locations, with only 56% of the gap closing over the following four decades. Company documents explain that a key concern at the time was to attract and maintain a sizable workforce, which induced the firm to invest heavily in local amenities that likely account for our result. We then build a dynamic spatial model in which a firm's labor market power within a region depends on how mobile workers are across locations and run counterfactual exercises. The model is consistent with observable spatial frictions and the RD estimates. The model shows that the firm increased aggregate welfare by 3.7%, and that this effect is increasing in worker mobility.
Media coverage: Marginal Revolution, Frankfurter Allgemeine, UCLA's Research Spotlight, Cato Institute
International Diffusion of Technology: Accounting for Differences in Learning Abilities
New Version Coming Soon - Old Version Here
An important question in the field of economic growth and development is how developing countries learn to adopt and use new technologies. This paper studies how firms learn from each other through trade. First, using an unexpected change in foreign trade costs and data on the network of firm transactions in Costa Rica, I document how productivity grows systematically faster for firms that trade with partners with better technologies, but that this is effect is decreasing in the gap between the partner's productivity. Second, I build a model in which knowledge transfers can occur through trade, and in which agents have heterogeneous learning abilities: The probability of a producer adopting a technology slightly better than hers is larger than the probability of adopting a much more sophisticated one—the trade-off being that conditional on adoption, more sophisticated technologies lead to higher productivity. I document how the model matches the empirical dependence of productivity growth on productivity gaps across trading partners, and the firm size distribution. The model also highlights how ignoring differences in learning abilities can overestimate the impact of exposure to high-TFP trading partners, leading to suboptimal trade policies.
The International Consequences of Bretton Woods: Capital Controls and the Value of Geopolitical Stability
with Lee Ohanian, Paulina Restrepo-Echavarría, and Mark Wright
This paper quantifies the positive and normative effects of capital controls on international economic activity under The Bretton Woods international financial system. We develop a three-region world economic model consisting of the U.S., Western Europe, and the Rest of the World. The model allows us to quantify the impact of these controls through an open economy general equilibrium capital flows accounting framework. We find these controls had large effects. Counterfactuals show that world output would have been 6% larger had the controls not been implemented. We show that the controls led to much higher welfare for the rest of the world, moderately higher welfare for Europe, but much lower welfare for the U.S. We interpret the large U.S. welfare loss as an estimate of the implicit value to the U.S. of preventing capital flight from other countries and thus promoting economic and political stability in ally and developing countries.
New Version Coming Soon - Old Version Here
Bridging India and Bangladesh: Cross-border Trade and Motor Vehicle Agreements
with Matías Herrera Dappe and Mathilde Lebrand
This paper studies the effects of changing current trade barriers between Bangladesh and India on national welfare, and on the distribution of people and Real GDP in regions within these countries. We use a spatial general equilibrium model calibrated to these two economies, along with road network travel-time calculated using GPS data, to measure changes in economic outcomes given changes in trade costs across regions. In particular, we focus on three scenarios: (i) allowing traffic of vehicles transporting goods along the routes specified in the BBIN motor vehicle agreement (MVA); (ii) changes in traffic and trade of vehicles transporting goods along the routes specified in the MVA; and (iii) complete integration allowing traffic and trade of vehicles transporting goods across any route. Our counterfactual exercises show that decreasing trade barriers between these two countries can lead to an increase in national welfare for both India and Bangladesh.
Work in Progress
Foreign Investment, Productivity Spillovers and Environmental Effects: Evidence from the United Fruit Company with Esteban Méndez-Chacón
“Productivity, Business Cycles and Trade: Evidence from Chile” with Vladimir Smirnyagin
Intermediate Microeconomics (350 students), Spring 2018;
Principles of Macroeconomics (60 students), Summer 2017; and
Math Camp for Economics Graduate Students, Summer 2016, 2017.
Macroeconomics (Lee Ohanian), Fall 2016, Fall 2018; and
Macroeconomic Implications of Globalization (Ariel Burstein), Spring 2017.
Principles of Microeconomics, Fall 2017, Winter 2017, Spring 2019; and
Principles of Macroeconomics, Spring 2016, Winter 2018.
Diana Van Patten
International Economics Section
Department of Economics
Julis Romo Rabinowitz Building, Room 296
Princeton, New Jersey 08544-1021
Email: vanpatten (at) princeton (dot) edu