Abstract. Transport infrastructure affects regional economies through trade and commuting, two channels that are rarely studied together, particularly by transport mode. I develop a quantitative spatial framework of subnational trade and commuting within and across countries. Workers choose where to live and work. Trade and commuting flows are split between transport modes and respond to mode-specific transport costs. I construct a novel dataset for 2010-2018 on bilateral goods trade and commuting flows between 271 European NUTS2 regions and on completed road and rail infrastructure projects in the Trans-European Transport Network (TEN-T). I use the framework to quantify the regional effects of projects under the European Union's TEN-T policy in two steps. First, I structurally estimate the effect of completed infrastructure projects on bilateral transport costs by mode, finding a robust cost reduction for rail but not for road. Second, I use the estimated rail cost reduction to conduct a counterfactual general equilibrium analysis of the effects of TEN-T rail projects. The effects differ substantially between regions, both across and within countries. Commuting accounts for 62% of the aggregate welfare gain and trade for 38%, suggesting that assessments of transport infrastructure policy should account for effects on both goods trade and worker mobility.

Abstract. We quantify the economic impact of a potential secession of Catalonia from Spain. Using a novel dataset of trade flows between 17 Spanish subnational regions and 142 countries, we estimate the effects of different levels of borders on trade flows and uncover heterogeneity in regional, national and EU border effects. We use a general equilibrium analysis of trade with fiscal transfers to understand the consequences of a potential secession with political uncertainty. In counterfactual experiments, we impose new borders on Catalan regional and international trade, potentially within or outside the European Union, resulting in a welfare decline for Catalonia and Spain.

Abstract. This paper analyses the differential effect of trade agreements on income per capita of subnational regions with international borders. We construct an extensive panel dataset covering 1350 regions in 86 countries worldwide between 1950 and 2017. Our results show that trade agreements are positively associated with income per capita of regions sharing contiguous borders with trading partners, relative to regions sharing borders with countries with whom no trade agreements exist. For border regions, the positive relationship of trade agreements and regional income roughly compensates potential income disadvantages of having international borders. These insights help in explaining and mitigating regional inequalities.

Abstract. Performing an analysis of variance (ANOVA) on a large dataset spanning many dimensions becomes computationally challenging or even infeasible. We develop a new, fast procedure, ANOVA-HDFE, which uses sequential linear regressions and builds on recent advances in regression analysis with high-dimensional fixed effects (HDFE). It accommodates both balanced and unbalanced settings with many categorical and continuous covariates, while also allowing for high-dimensional fixed effects. Applying ANOVA-HDFE to bilateral trade flows, we find that 60% of the variation is at the country or country-time level. Moreover, a substantial proportion of the pair-specific variation remains unexplained by standard trade cost proxy variables.

Abstract. We quantify the subnational effects of supranational trade and migration policy within and across European Union (EU) countries. To this end, our multi-country, multi-region general equilibrium framework incorporates migration between subnational regions into a multi-country gravity model of regional trade. Using data on bilateral regional trade and migration flows in the EU, we estimate the effects of the 2004 enlargement of the EU and conduct a general equilibrium analysis, assessing the regional trade, migration, and welfare implications of the policy change. Our results suggest that the EU enlargement increased regional trade by about 40% and regional migration by about 70%. We find positive welfare effects across the EU, with more heterogeneities across but also within countries. Accounting for migration decisions, we find that workers migrating to a different region due to the EU enlargement experience a welfare increase of about 40% on average.

Abstract. We analyse spatial dependence and spillover effects in economic income across subnational regions using a panel dataset (1950-2020) of regional GDP per capita for 1,361 regions across 86 countries worldwide. The data and setting allow us to evaluate the strength of spatial dependence both stepwise and in equilibrium across different types of neighbouring regions by employing a spatial autoregressive model. Our findings reveal strong positive spillovers between intra-national neighbours, with considerably smaller spillovers between international neighbours. We further show that spatial dependence tends to intensify when international neighbours are part of a common trade agreement and neighbouring regions have more similar election preferences. Consequently, depending on the type of border, income growth in neighbouring regions is positively affecting a region's own growth. These results emphasise the significance of spatial dependence in understanding regional disparities and considering how policy decisions in one country or region can influence economic outcomes in neighbouring regions.

Abstract. We ask the question what happens with world trade if individual countries grow over-proportionally, with a focus on the growth of China. Using data on international trade flows between 1986-2023 for 266 countries from ITPD-E R2025 we document a change in the growth of international trade following the global financial crisis of 2008. Applying a newly developed method for fast and scalable implementation of analysis of variance (ANOVA), we decompose international trade flows into the dimensions of variation to uncover the origins in the change in trade growth. We highlight the role played by China in explaining the observed patterns of international trade over time.