Research

ARTICLES IN PEER-REVIEWED JOURNALS

The Elasticity of Substitution between Transportation Modes: Evidence from Russia’s Blockade of Ukraine’s Ports (with O. Shepotylo, conditionally accepted at Economic Modelling) [SSRN, Economists for Ukraine, Replication package]

Abstract: This paper estimates the elasticity of substitution between transport modes when maritime access is disrupted at scale, using Russia's blockade of Ukraine's Black Sea and Azov Sea ports as a natural experiment. We combine Trade Data Monitor customs records for 2019-2025 with an index of conflict intensity around Ukrainian ports constructed from geolocated war-related events, and estimate the mapping from that index onto observed relative sea-to-land freight costs. The implied elasticity of substitution is 2.25 to 2.36, with a range of 1.9 to 3.7 across specifications. Substitution was concentrated in the first months after the invasion and among destinations at intermediate distances. The response is largest where both modes were genuinely available before the war, not where maritime dependence was highest. It falls after the first months as successive corridor arrangements restored partial maritime access, which identifies the reversibility of modal shifts once the disrupted mode returns.

Foreign Exchange Trading During World Cup Events (or I will watch the game while you trade) (with M. Melvin,  L. Mergner and F. Westermann). Journal of Money, Credit and Banking, forthcoming. First published: 28 July 2026 

Abstract: We analyze foreign exchange (FX) trading on FIFA World Cup game days in comparison to “normal” days. The FX market is an interesting case to study, as it has an institutional feature that allows participants to shift their trading needs to a counterparty bank so that the bank executes the trades at the London 4 p.m. fix. This “trade-shifting” allows the client to avoid actively managing their trades and spend more time on World Cup-related events. Using data from two different sources (EBS and CLS), we document this behavior and find that the effects are statistically and economically significant.

Labor Market Effects of Monetary Policy across Workers and Firms. European Economic Review, Volume 166, July 2024, 104756  (with A. Gulyas and M. Meier) 

Abstract: This paper uses Austrian social security records to analyze the effects of ECB monetary policy on the labor market. Our focus is on the role of worker and firm wage components, defined by an Abowd et al. (1999) wage regression. We find that monetary tightening causes the largest employment losses for low-paid workers who are employed in high-paying firms before the tightening. Monetary tightening further causes a reallocation of workers to lower-paying firms. In particular low-paid workers who were originally employed by low-paying firms are prone to falling down the firm wage ladder.

Resource misallocation and manufacturing productivity: The case of Ukraine. Journal of Comparative Economics, Volume 44, Issue 1, February 2016, Pages 41–55

Abstract: Applying Hsieh and Klenow (2009) methodology, and using the dataset of 47,497 unique establishments over the period of 2002–2010, I investigate the effects of resource misallocation on the productivity of Ukrainian manufacturing. Empirical results show that there is a significant resource misallocation in Ukrainian manufacturing. If it were the case that all market distortions were eliminated, manufacturing productivity could triple, whereas if Ukraine was as distorted as the US or EU, it could be twice more productive than it is now. The results also show that most enterprises should downsize their level of production and that the major reallocations of resources occur among the most and the least productive enterprises.

WORK IN PROGRESS

Financial Frictions, Markups, and Unilateral Trade Liberalization (with A. Tarasenko)

Abstract: We study how earnings-based credit constraints and variable markups shape effects of a unilateral trade liberalization. We develop an open economy dynamic heterogeneous agent model and discipline it using Ukrainian firm-level data. To the best of our knowledge, our model is the first one generating both capital intensity premium of exporters and positive correlation between markups and capital intensities in the steady state in line with the existing empirical evidence. Using counterfactual experiments, we find that trade liberalization comparable to the enactment of Autonomous Trade Preferences (ATP) by the European Union (EU) towards Ukraine in 2014 improves welfare and resource allocation but exacerbates capital misallocation. Better access to earnings-based credit magnifies improvements in welfare and resource allocation, while tougher foreign competition reduces them.

International Trade when Ports are Blocked: The Cost of Russia’s Blockade of Ukrainian Ports (with O. Shepotylo) 

Abstract: When sea access is abruptly severed, an economy can be cut off from global markets almost overnight, yet the welfare costs of sustained maritime disruptions remain largely unquantified. We use Russia’s blockade of Ukrainian Black Sea ports following the full-scale invasion in February 2022 as a natural

experiment that generates plausibly exogenous variation in trade cost shocks across product-destination pairs, depending on their pre-war vessel dependence. Ukrainian exports underperformed their counterfactual by 50% in value, with maritime-exposed trade flows experiencing disproportionately larger declines and partial substitution toward road and rail. A back-of-the-envelope calculation attributes up to two thirds of the total export decline to the blockade alone. A quantitative Ricardian model with discrete modal choice estimates a 4.1% welfare loss for Ukraine from the blockade. Beyond Ukraine, the blockade generated spillovers that fall disproportionately on low-income food-importing countries.

Firms, Infrastructure, and Port Blockade  (with O. Shepotylo) 

The Local Spillover Effects of Wartime Spending on Firms (with M. Klymak)

Firm-Level Costs of Forced Jurisdictional Transfer: Evidence from Crimea 

OTHER WORKING PAPERS

Where are the hidden securities in external statistics?. 2024. IFC Bulletin No. 62, Bank for International Settlements (with J. Diz Dias, F. Pastoris, M. Schmitz, J. Falcão Silva)

Abstract: Several studies on the international investment position and balance of payments statistics (external statistics) suggest that holdings of foreign financial assets are greatly underestimated (“hidden” or “missing”) in official data. This is evidenced by a significant global discrepancy between external assets and liabilities that reached $4.2 trillion at the end of 2022. The literature relates the gap to an effort to hide wealth for tax evasion purposes (“hidden”) coupled with the difficulties faced by external statistics compilers to collect information on cross-border financial investments of non-financial corporations and households, notably if intermediated via custody accounts in foreign countries (“missing”). We take a deeper look on the “missing” hypothesis, i.e. data on foreign assets missing from external statistics data collections due to foreign custody. We are interested in further testing the “missing” hypothesis and estimate its magnitude by using a novel method based on the mechanics of international finance and the practices in external statistics recording. To this end we considered the inverse relationship between securities and deposits using a particular sub-set of non-financial corporations’ and households’ external statistics data, namely transactions in “third-party securities holdings” held in custody in euro area financial centres and the deposits held with foreign banks (collected by the Bank of International Settlements). The results obtained for the euro area financial centres are extrapolated to other financial centres worldwide to estimate the global “missing” securities broken down by holding country. For the year 2021, about 50% of the “missing” securities globally are statistically attributed to the United States, the United Kingdom, Germany, the Netherlands, Cayman Islands, and Ireland. The “missing” securities represented about 1.4% of GDP for these countries. The results may complement and improve the interpretation of international statistics, as this method keeps the methodological consistency of macroeconomic external statistics based on the residency framework.

Crony Capitalism in Ukraine: Relationship between Political Connectedness and Firms' Performance.  2018. World Bank Policy Research Working Paper; No. 8471. (with O. Balabushko, O. Betliy, V. Movchan, R. Piontkivsky)

Abstract: This study combines firm-level data and data on politically exposed people to explore correlation between firms' political connectedness and their economic performance in Ukraine. First, it estimates the share of politically connected firms in Ukraine's economy. Second, the study looks at how different the performance of politically connected firms is from that of their nonconnected peers. The analysis finds that 2 percent of firms are politically connected, but they control over 20 percent of the total turnover and over 25 percent of the assets of all Ukrainian companies. Over the past two decades, politically connected firms used various channels to access economic rents: public procurement, subsidized loans, transfers from the budget, trade regulations that restrict imports, privileged access to state assets through privatizations, and beneficial tax regimes. There is a strong negative correlation between political connection and productivity. Politically connected firms are larger and employ more people, but they are less productive and grow slower in turnover and job creation. This may likely account for lower economic growth and less competitive economy.