Journal Article International Trade and Macroeconomic Dynamics with Heterogeneous Firms Get access Fabio Ghironi, Ghironi Boston College Euro Area Business Cycle Network Search for other works by this author on: Oxford Academic Google Scholar Marc J. Melits Harvard University, Centre Economic Policy Research, National Bureau of Research The Quarterly Economics, Volume 120, Issue 3, August 2005, Pages 865–915, https://doi.org/10.1093/qje/120.3.865 Published: 01 2005

This paper builds a framework for the analysis of macroeconomic fluctuations that incorporates endogenous determination number producers and products over business cycle. Economic expansions induce higher entry rates by prospective entrants subject to sunk investment costs. The sluggish response generates new potentially important propagation mechanism cycle models. return determines household saving decisions, producer entry, allocation labor across sectors. Our replicates several features...

This paper introduces a new empirical model of international trade flows based on an import intensity-adjusted measure aggregate demand. We compute the intensity demand components by using OECD Input-Output tables. argue that composition plays key role in dynamics because relatively larger movements most import-intensive categories expenditure (especially investment, but also exports). provide evidence favor these mechanisms for panel 18 countries, paying particular attention to 2008–2009...

We develop a stochastic, general equilibrium, two-country model of trade and macroeconomic dynamics.Productivity differs across individual, monopolistically competitive firms in each country.Firms face sunk entry cost the domestic market both fixed per-unit export costs.Only relatively more productive export.Exogenous shocks to aggregate productivity or costs induce enter exit their markets, thus altering composition consumption baskets countries over time.In world flexible prices, our...

We develop a stochastic, general equilibrium, two-country model of trade and macroeconomic dynamics.Productivity differs across individual, monopolistically competitive firms in each country.Firms face sunk entry cost the domestic market both fixed per-unit export costs.Only relatively more productive export.Exogenous shocks to aggregate productivity or costs induce enter exit their markets, thus altering composition consumption baskets countries over time.In world flexible prices, our...

This paper studies the role of endogenous producer entry and product creation for monetary policy analysis business cycle dynamics in a general equilibrium model with imperfect price adjustment.Optimal stabilizes prices, but lets consumer index vary to accommodate changes number available products.The free condition links equity (the value products) marginal cost markups, hence inflation dynamics.No-arbitrage between bonds expected return on shares, thus financing creation, bonds, affected...

This paper builds a framework for the analysis of macroeconomic fluctuations that incorporates endogenous determination number producers over business cycle.Economic expansions induce higher entry rates by prospective entrants subject to irreversible investment costs.The sluggish response (due sunk costs) generates new and potentially important propagation mechanism real cycle models.The stock-market price (corresponding creation productive units) determines household saving decisions,...

The inefficiencies related to endogenous product creation and variety under monopolistic competition are two-fold: one static—the mis-alignment between consumers producers regarding the value of a new variety; dynamic—time variation in markups. When production factors (labor physical capital ) elastic traded competitive markets, further distortions appear. Appropriate taxation schemes can restore optimality if they preserve entry incentives. Quantitatively, welfare costs each distortion by...

We use a two-country, stochastic, general equilibrium model of international trade and macroeconomic dynamics with monopolistic competition heterogeneous …rms to explore the role entry in domestic economy extensive margin U.S. ‡ows over business cycle.We show that can reproduce evidence on cyclicality important features margins trade.Entry implied di¤erences timing export import expansions response favorable productivity shocks provide key mechanism for model's ability explain this range...

We study the consequences of protectionism for macroeconomic fluctuations. First, using high-frequency trade policy data, we present fresh evidence on dynamic effects temporary barriers. Estimates from country-level and panel VARs show that acts as a supply shock, causing output to fall inflation rise in short run. Moreover, has at best small positive effect balance. Second, build open economy model with firm heterogeneity, endogenous selection into trade, nominal rigidity channels through...

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This paper studies the role of endogenous producer entry and product creation for monetary policy analysis business cycle dynamics in a general equilibrium model with imperfect price adjustment. Optimal stabilizes prices, but lets consumer index vary to accommodate changes number available products. The free-entry condition links equity (the value products) marginal cost markups hence inflation dynamics. No-arbitrage between bonds expected return on shares, thus financing creation, bonds,...

The inefficiencies related to endogenous product creation and variety under monopolistic competition are two-fold: one static-the misalignment between consumers producers regarding the value of a new variety; dynamic-time variation in markups.Quantitatively, welfare costs former potentially very large relative latter.For calibrated version our model with these distortions, their total cost amounts 2 percent consumption.Appropriate taxation schemes can implement optimum amount entry...

We study Ramsey-optimal fiscal policy in an economy which product varieties are the result of forward-looking investment decisions by firms.There two main results.First, depending on particular form variety aggregation preferences, firms' dividend payments may be either subsidized or taxed long run.This balances monopoly incentives for creation with consumers' welfare benefit variety.In most empirically relevant aggregation, socially efficient outcomes entail a substantial tax income,...