Time: 11AM-12PM, Friday, November 28

Venue: WDR 1005

Speaker: Deyu Rao, Assistant Professor of Economics at The Hong Kong University of Science and Technology

Speaker’s bio: Deyu Rao is an Assistant Professor of Economics at The Hong Kong University of Science and Technology. He holds a Ph.D. from Cornell University and specializes in environmental and urban economics. His research examines how economic agents respond to environmental challenges, with a particular focus on the impacts of air pollution and climate change using reduced form and structural methods. He is also a faculty associate at HKUST’s Center for Economic Policy, the Institute for Emerging Market Studies, Center for AI for Scientific Discoveries, and a consultant for the World Bank Group.

Abstract: Our study examines the intricate effects of climate change, trade dynamics, and water resources on global economic outcomes. Leveraging high-resolution satellite data, we create a detailed mapping from local climate shocks to country-level agricultural productivity. We then employ a structural trade model following Eaton and Kortum (2002) and explore the welfare implications of precipitation shocks across various scenarios through their impact on the agricultural sector. Our findings highlight significant heterogeneity in local productivity responses to precipitation, and the impact of precipitations can propagate via trade networks and production linkages. We demonstrate that trade and production networks can mitigate the impact of local precipitation shocks, though these effects may spill over into other sectors and regions through market interactions.