Robert Zymek

International Linkages and Income Differences

During Robert Zymek's visit at CESifo, he will advance a current project on the transmission of business cycles through international value-added linkages. The project combines a novel theoretical framework with recent data on cross-border input-output linkages in order to trace the type of macroeconomic shocks which give rise to observed international business cycle correlations. This work builds on earlier research described in a recent manuscript, "International Linkages and Income Differences" (joint with A. Cuñat). The paper presents a tractable model which makes it possible to incorporate countries' international production linkages into the standard development accounting framework. Development accounting aims to assess how much of the variation in per-worker incomes across countries can be attributed to quantifiable characteristics. Typical exercises in this literature, which implicitly assume that countries are closed, find that this number is one third – a disappointing result since it implies that income differences are mostly due to factors which are not directly observable. The paper shows that an updated development accounting exercise, which formally incorporates countries' international linkages, can explain up to 50% of the cross-country variation in incomes.

Mr Zymek is an international economist with an interest in the macroeconomic aspects of international trade and open-economy macroeconomics. His research to date has explored the drivers of the long-run growth in world trade using quantitative models, and the role of trade in sovereign debt crises.

Robert Zymek is an Assistant Professor with tenure ("lecturer") at the University of Edinburgh's School of Economics. He received his PhD from Pompeu Fabra University in 2011 and was a visiting scholar in the IMF Research Department in 2015.