December 12, 2023, 11:00-12:00
Laura Alfaro is the Warren Alpert Professor of Business Administration. At Harvard Business School since 1999, she is also a Faculty Research Associate in the NBER International Finance and Macroeconomics Program and the International Trade and Investment Program, CEPR IFM program She served as Minister of National Planning and Economic Policy in Costa Rica from 2010-2012, taking a leave from HBS. She is Co-Editor of the Journal of International Economics and the World Bank Research Observer. Professor Alfaro is the author of multiple articles published in leading academic journals such as the American Economic Review, Review of Economic Studies, Journal of Political Economy, Journal of International Economics, and Harvard Business School cases related to the field of international economics and in particular international capital flows, foreign direct investment, sovereign debt, trade, and emerging markets. She is a member of the Latin-American Financial Regulatory Committee (CLAAF), the David Rockefeller Center for Latin American Studies (DRCLAS) policy committee, Faculty Associate at Harvard’s Weatherhead Center for International Affairs, among others.
Speaker presentation
The Looming “Great Dislocation”
Global supply chains have come under unprecedented stress as a result of U.S.-China trade tensions, the COVID-19 pandemic, and geopolitical shocks. We document shifts in the pattern of U.S. participation in global value chains over the last four decades, in terms of partner countries, products, and modes, with a focus on the last five years (2017-2022). The available data point to a looming “great reallocation” in supply chain activity: direct U.S. sourcing from China has decreased, with low-wage locations (principally: Vietnam) and nearshoring/friendshoring alternatives (notable: Mexico) gaining in import share. The production line positioning of the U.S.’s imports has also become more upstream, which is indicating of some reshoring of production stages. We sound several cautionary notes over the policies that have set this reallocation in motion: it is unclear if these measures will reduce U.S. dependence on supply chains linked to China, and there are moreover already signs that prices of imports from Vietnam and Mexico are on the rise.