Darracq Pariès, Matthieu; Notarpietro, Alessandro - 2008
produced by a continuum of “single-good-firms” indexed on [0, 1],mix-
ing local production with imports. More precisely, in … with imports. There is a home bias in aggregation, n,which
pins down the degree of openness in steady state. The ι − th … in the absence of adjustment costs on imports, home bias shocks are given
by n
t
= n
radicalbig
ε
Δn
t
and n
∗
t
=
n
√
ε …