Trade Flow Dynamics with Heterogeneous Firms
We use a two-country, stochastic, general equilibrium model of international trade and macroeconomic dynamics with monopolistic competition and heterogeneous firms to explore the role of entry in the domestic economy and the extensive margin of international trade in the dynamics of U.S. trade flows over the business cycle. We show that the model can reproduce the evidence on the cyclicality of U.S. trade and important features of the evidence on the extensive margins of domestic entry and international trade. Entry in the domestic economy and the implied differences in the timing of export and import expansions in response to favorable productivity shocks provide the key mechanism for the model's ability to explain this range of stylized facts.
|Date of creation:||2007|
|Date of revision:|
|Publication status:||Published in American Economic Review|
|Contact details of provider:|| Postal: |
Web page: http://www.economics.harvard.edu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Satyajit Chatterjee & Russell W. Cooper, 1993.
"Entry and exit, product variety and the business cycle,"
93-30, Federal Reserve Bank of Philadelphia.
- Satyajit Chatterjee & Russell Cooper, 2014. "Entry And Exit, Product Variety, And The Business Cycle," Economic Inquiry, Western Economic Association International, vol. 52(4), pages 1466-1484, October.
- Satyajit Chatterjee & Russell Cooper, 1993. "Entry and Exit, Product Variety and the Business Cycle," NBER Working Papers 4562, National Bureau of Economic Research, Inc.
- Timothy J. Kehoe & Kim J. Ruhl, 2009.
"How important is the new goods margin in international trade?,"
324, Federal Reserve Bank of Minneapolis.
- Timothy J. Kehoe & Kim J. Ruhl, 2013. "How Important Is the New Goods Margin in International Trade?," Journal of Political Economy, University of Chicago Press, vol. 121(2), pages 358 - 392.
- Timothy J. Kehoe & Kim J. Ruhl, 2006. "How Important is the New Goods Margin in International Trade?," 2006 Meeting Papers 733, Society for Economic Dynamics.
- Devereux, Michael B. & Head, Allen C. & Lapham, Beverly J., 1996. "Aggregate fluctuations with increasing returns to specialization and scale," Journal of Economic Dynamics and Control, Elsevier, vol. 20(4), pages 627-656, April.
- Robert C. Feenstra & John Romalis & Peter K. Schott, 2002. "U.S. Imports, Exports, and Tariff Data, 1989-2001," NBER Working Papers 9387, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:hrv:faseco:3229097. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ben Steinberg)
If references are entirely missing, you can add them using this form.