-specific productivity shocks tend to worsen the current account, whereas global shocks have little effect. Both types of shock raise … investment. It is a puzzle, however, for the intertemporal model that long-lasting local productivity shocks have a larger impact …

and productivity. A model with monopolistic competition, a continuum-of-goods, and endogenous tradability allows for … theory and history to be consistent for a wide range of underlying productivity shocks. …

and productivity. A model with monopolistic competition, a continuum-of-goods, and endogenous tradability allows for … theory and history to be consistent for a wide range of underlying productivity shocks. …