Sebastian Sotelo
ifo/CESifo Visiting Researcher
Sebastian Sotelo, University of Michigan, CESifo Guest from 13 to 16 May 2025.
“Deforestation: A Global and Dynamic Approach”
In this recent paper, Sebastian Sotelo and his co-authors, Farid Farrokhi, Elliot Kang, and Heitor Pellegrina, argue that coordinated tariff reductions in agricultural markets can deliver gains from trade, while putting limited pressure on forests. There are two reasons for this result. First, global demand for agriculture, a key driver of deforestation, is relatively inelastic – as opposed to the demand for agricultural products faced by individual economies. Second, when freer trade allocates agricultural activities to more productive countries, less land is needed to supply the world with food.
Mr. Sotelo’s research studies the mechanisms through which technological change and improved trade opportunities shape people’s lives, ranging from how domestic trade costs and remoteness impinge on farmers’ productivity and welfare, to how information and communication technologies have transformed the workplace and the distribution of income. In previous work, he introduced new measurements that document the large variation in occupational task content across time and space. He has also studied the sources of comparative advantage in agriculture, and how trade in agriculture, a sector that employs millions of people worldwide, affects welfare and inequality.
While at CESifo, Mr. Sotelo will further his current agenda on international trade. Active projects in this agenda study the relation between trade and deforestation, whether trade in labor-saving technologies (such as home appliances) can foster labor force participation, and the conditions under which commodity booms lead to industrialization.
Sebastian Sotelo is an Associate Professor of Economics at the University of Michigan. He is also an NBER Research Associate and was previously the Peter B. Kenen Fellow at Princeton University's International Economics Section. He holds a PhD from the University of Chicago and a Master’s degree from Universitat Pompeu Fabra.
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