This paper identifies nearshoring in the corporate credit market in Mexico that resulted from the US-China trade war in 2018. We estimate that firms in the industries with highest tariffs borrowed up to 9% more than firms in other industries, and enjoyed lower interest rates. Yet, the aggregate economic outcomes of the nearshoring boom are elusive. To learn why, we build a quantitative general equilibrium model with heterogeneous firms and calibrate it to replicate the microeconomic estimates of the nearshoring shock. In a counterfactual experiment, we find that Mexico's growth from the trade war could have doubled if the economy featured a more flexible credit intermediation system.

This paper studies corporate debt composition in an increasingly intangible economy. Using matched firm-lender corporate credit data from South Korea, we document that intangible-intensive firms disproportionately borrow from non-bank lenders. This heterogeneity in the mode of financing is amplified in response to a change in bank regulation, which acts  as an exogenous tightening of bank credit supply. To make sense of these findings, we develop a model of heterogeneous firms with two types of capital and two sources of financing: regulated banks and non-bank lenders. Bank capital requirement enters the price of corporate loans directly --- raising it leads the most productive firms to both increase borrowing from non-banks, and to invest more in intangible assets.

This paper studies the nature of globalization and its effects on the US trade deficit. We build a quantitative model of international trade and financial integration that features time-varying frictions in the movement of goods and capital. By matching the observed volumes of trade and gross capital flows, the model allows us to identify the joint evolution of these two frictions. In a series of counterfactual experiments, we find that the reduction in trade costs is a prerequisite for trade and financial globalization and increases the trade deficit. On the other hand, financial integration can widen or reduce the trade deficit and the shocks affecting it have persistent effects, while shocks to trade costs are more short-lived.

This paper studies heterogeneity in health status across income groups using administrative panel data that link hospital discharges to tax records in Canada. We construct a health measure based on a comorbidity index capturing disease severity and mortality risk. We document that individuals in their 50s from the bottom 10% of the income distribution are nearly twice as unhealthy as those from the top 10% on average. To explain why health inequalities persist despite universal health insurance, we develop an overlapping-generations model in which adult health is shaped by parental investments in early childhood. In the model, universal insurance potentially crowds out early childhood health investment particularly among low-income households. Our results show that targeted subsidies supporting early health investment can complement universal insurance and reduce health inequality.