Farid Farrokhi
Farid Farrokhi is an assistant professor of economics at Purdue University. His research interests are at the intersections of international trade, spatial economics, and environmental economics. He combines theory and data with applications related to markets of natural resources and agriculture, trade and climate policies, and welfare consequences of trade.
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Farid Farrokhi is an assistant professor of economics at Purdue University. His research interests are at the intersections of international trade, spatial economics, and environmental economics. He combines theory and data with applications related to markets of natural resources and agriculture, trade and climate policies, and welfare consequences of trade.
In their own words…
IEA – Can you tell us a little bit about your life story and how you got interested in economics and decided to pursue an academic career?
Farid – I was born in the middle of the eight-year-long Iran-Iraq war. Like many other kids in the post-war period, there were not many educational resources readily available to me. However, my mother and father were both high-school teachers, respectively in sociology and math, and through their book collection I had access to a range of books such as translations of mathematical books by eastern European authors or voluminous texts like Glimpses of World History by Jawaharlal Nehru. I regularly sank into these books, when I was not playing soccer in the narrow alleys of Qazvin, in the north center of Iran, where I was born and grew up.
As far as I can remember I was always intrigued by mathematics, social sciences, and history. I never realized and perhaps will never know as to whether I am passionate about these topics because of their relevance for economic development and social progress or because of their appealing abstract world of numbers, theories and narrations.
However, when I was eighteen, after a successful outcome in the nation-wide universities entrance exam, I followed the norm of the time in Iran to study engineering. I soon realized engineering was a foreign world to me. So, I started to search for a major that I could genuinely care about, until I took a course in economics. I found the idea of working with formal models in social sciences so interesting that I didn’t hesitate to switch to economics. After completing a master’s in economics at Sharif University, I worked for a year, but I found it unrewarding. So, I decided to apply to PhD programs that led me to the economics department at the Pennsylvania State University in the United States.
At Penn State, I ended up focusing my research on international trade. Sometimes I think my interest in the field of trade might have something to do with the impacts of trade sanctions on the Iranian economy. That might be just a story I like to believe to make sense of idiosyncrasies that shape one’s long-run career. In any event, three aspects of the field of trade (which are not exclusive to this field) were appealing to me: the mix of theory and empirics to evaluate policy, the idea of embedding micro-level mechanisms into general equilibrium frameworks, and the applicability of tools and insights to questions in other areas such as development, macroeconomics and labor economics.
In addition, I was lucky to have excellent advisors who helped me transition to the world of research. Sometimes, I remind myself of the things I have picked up from them and unconsciously from many others. This is for example when I feel urged to rethink and rewrite because I find my past sentences and claims vague, or when a framework I have developed fails to explain a key empirical pattern but right after the frustration I’d like to try other ways. Sometimes this kind of attitude can become so demanding that you start reminding yourself that after all you could do all sorts of other things with your life. At some level, I think it boils down to the belief that collective research in economics, and more generally in social sciences, will help us deal with many challenges faced by the society. This is perhaps why I tried to stay in the sphere of research.
IEA – In some of your recent work you study the gains in agricultural productivity that have resulted from the liberalization of trade in agricultural inputs. Can you briefly summarize your findings?
Farid – My research is primarily at the intersections of international trade, spatial economics and environmental economics, with applications to markets of natural resources and agriculture, trade and climate policies, and welfare implications of trade.
As for trade and agriculture, it is traditionally viewed that agricultural gains from trade mainly emerge from international specialization in agricultural outputs. That is to say that, for example, when barriers to trade fell, Brazil would specialize in soybean and India in rice, resulting in a more efficient allocation of crop production around the world. This traditional view, however, does not uncover all the salient ways that trade liberalization matters for agriculture. My recent work with Heitor Pellegrina emphasizes that trade in agricultural inputs, such as chemical fertilizers and farm machinery, have been equally important in the past three decades for agricultural productivity and food consumption around the world.
A key observation that emerges from data is that across countries, two-thirds of a dollar spent on agricultural inputs are paid, via imports, to foreign suppliers. Consequently, agricultural producers in many countries largely depend on imports for access to one or all types of agricultural inputs. Access to these agricultural inputs is, in turn, critical to use modern types of agricultural technologies.
Using detailed data and economic theory, I have extensively examined the importance of trade in agricultural inputs and how it encourages adoption of modern technologies. A key finding is that trade-induced gains via these input-side mechanisms are quantitatively as important as those on the output side (that occur via the traditional channel of international crop specialization). In other words, we would miss much in evaluating the impact of globalization of the agricultural supply chain if we were to ignore the input-side mechanisms that triggered agricultural modernization.
At a more historical level, my research indicates that besides the process of domestic development, international trade has played an important role in the global rise of modern agriculture, as reflected by the shift from traditional, labor-intensive technologies to modern, labor-saving technologies in the agriculture sector. The agricultural modernization has been in turn an important force behind structural change and particularly critical to economies where food security has been once a pressing issue.
IEA – What were some of the distributional effects of these productivity gains, within and across countries?
Farid – Let me first mention that trade in agricultural outputs (e.g., different crops) has particularly benefited low-income countries, because consumers in lower-income countries have a higher share of their expenditure on food. In contrast, my research shows that trade in agricultural inputs has widened the gap between low- and middle-income countries while compressing the gap between middle- and high-income countries.
There are two reasons for why low-income countries fell behind in gaining from trade in agricultural inputs. First, since the land in low-income regions of the world is largely under traditional, labor-intensive technologies, the gains from access to agricultural inputs has remained limited on the intensive margin. Second, large domestic frictions within the economy of low-income countries restricts the rate of technology adoption there, implying smaller gains also on the extensive margin.
Forces that are responsible for the distributional effects across countries are also at play, with varying degrees, within countries. For instance, the gains are larger in areas that are better connected via roads, railways and waterways to major ports and cities within a country. Moreover, technology adoption in the agriculture sector increases demand for workers whose skills are a better match for modern types of production technologies or those who can more easily sort into manufacturing or services. This channel also has the potential to create distributional effects across wrokers.
IEA – Researchers from developing countries sometimes face serious obstacles in accessing research networks at the frontier of economics. Would you have some advice for younger scholars?
Farid – At the beginning of my career, my half-conscious thinking was that if I wrote good papers, people out there somehow would notice and even appreciate my work. Partly because of my underestimation of the value of research networks, partly because of how competitive this profession is, and partly because I still needed to improve my work, I received many rejections from journals and did not publish anything for three years after my graduation. In the face of such outcomes, it is important not to get discouraged, learn from the past and keep trying.
Barriers in accessing research networks can be frustrating, but I don’t think one can come up with a pre-defined formulated plan to overcome such barriers. The best way (or at least the one that I adopted) is not to take undesirable outcomes personal, not to overthink it, not to get discouraged or overly excited, but instead embrace every chance that presents itself. Submit your papers to as many conferences as you can particularly in places where you can more conveniently travel to, try to see whether you can visit other institutions even for a short period, signup and talk to economists who visit your institution, and if you are up for it, use social media to connect with other researchers.
At another level, when you get invited to revise your paper, do your best to address all the concerns that are raised by the editor and referees. You do not know your referees, but you know they will read your revised paper carefully and when you do a solid job, you will add to your credit in addition to the paper that you publish. Your credit in turn helps you access research networks.
Moreover, you can always put together a conference yourself and invite researchers to participate in it. If you do not have financial resources to make it in person, you can run it virtually.
Lastly, networking in conferences and similar situations can sometimes feel awkward. But think about it this way: At any point in time, you have a comfortable zone, a growing zone, and an out-of-reach zone. If you feel that a territory is completely unfamiliar to you, you do not need to approach it all at once. There is however a margin at which you can push yourself just a little bit more and that’s how you know where your growing zone is. My advice is that at any point in time, maintain your comfortable zone and work on your growing zone.