The WTO prize winners were announced on 10 September 2015 at the annual meeting of the European Trade Study Group in Paris.
The paper by Christoph Boehm, Aaron Flaaen and Nitya Pandalai-Nayar studies the role that global supply chains play in the cross-country transmission of shocks. Looking at the consequences of the 2011 Tohoku earthquake, the paper finds that US firms most reliant on Japanese imported inputs (Japanese affiliates) suffered large drops in US output in the months following the shock, roughly one-for-one with the drop in imports. The effects are large because these firms largely engaged in intra-firm input trade, where inputs embody firm-specific knowledge and capabilities that cannot easily be substituted with other inputs or suppliers.
In the judgment of the Selection Panel, this paper “contributes importantly to our understanding of the way shocks are propagated through the modern global economy. Its findings are striking, but convincing and have important implications not only for trade and FDI, but also for international macro.” Understanding cross-country propagation mechanisms is key to assessing the impact of trade policy changes and the context in which WTO rules and disciplines apply.
Christoph Boehm is from Germany. He studied Business Management and Engineering at Dresden University of Technology and holds an MA in Economics from the University of Michigan and from Tufts University. He is a Ph.D. candidate in economics at the University of Michigan (expected 2016).
Aaron Flaaen is from the United States. He studied Economics and International Business at the University of South Carolina and holds an MA and PhD in Economics from the University of Michigan. He is currently an economist at the Federal Reserve Board of Governors in Washington D.C..
Nitya Pandalai-Nayar is from India. She studied Mathematics and Economics at Wellesley College and holds a M.Sc. in Economics from the London School of Economics. She is a Ph.D. candidate in economics at the University of Michigan (expected 2016).
The Academic Selection Panel comprised Dr Avinash Dixit (Emeritus Professor of Economics, Princeton University), Dr Robert Koopman (Director, Economic Research and Statistics Division, WTO), Dr Robert Staiger (Professor of Economics, Dartmouth College), and Dr Alberto Trejos (Professor of Economics, INCAE Business School). Dr Roberta Piermartini (Counsellor, Economic Research and Statistics Division, WTO) coordinated the work of the panel.